<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DELTA AIR LINES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of incorporation or organization)
58-0218548
(IRS Employer Identification No.)
Hartsfield Atlanta International Airport
Atlanta, Georgia
(Address of Principal executive offices)
30320
(Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class
to be so registered
Series D Junior Participating
Preferred Stock Purchase Rights
Name of each exchange on which
each class is to be registered
New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On October 24, 1996, the Board of Directors of Delta Air Lines,
Inc. (the "Company") declared a dividend of one preferred stock purchase right
(a "Right") for each outstanding share of the Company's common stock, par value
$3.00 per share (the "Common Stock"), payable to holders of record of the
Common Stock as of the close of business on November 4, 1996 (the "Record
Date").
Prior to the Distribution Date (as defined below), the Rights
will be evidenced by the certificates for and will be transferred with the
Common Stock, and the registered holders of the Common Stock will be deemed to
be the registered holders of the Rights. After the Distribution Date, the
Rights Agent will mail separate certificates evidencing the Rights to each
record holder of the Common Stock as of the close of business on the
Distribution Date, and thereafter the Rights will be transferable separately
from the Common Stock. The "Distribution Date" means the earlier of (i) the
10th business day (or such later day as may be designated by a majority of the
Continuing Directors (as hereinafter defined)) after the date (the "Stock
Acquisition Date") of the first public announcement that a person (other than
the Company or any of its subsidiaries or any employee benefit plan of the
Company or any such subsidiary) has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock (an "Acquiring Person") and
(ii) the 10th business day (or such later day as may be designated by a
majority of the Continuing Directors) after the date of the commencement of a
tender or exchange offer by any person which would, if consummated, result in
such person becoming an Acquiring Person.
Prior to the Distribution Date, the Rights will not be
exercisable. After the Distribution Date, each Right will be exercisable to
purchase, for $300.00 (the "Purchase Price"), one one-hundredth of a share of
the Company's Series D Junior Participating Preferred Stock, par value $1.00
per share (the "Preferred Stock").
If any person becomes an Acquiring Person, each Right (other
than Rights beneficially owned by the Acquiring Person and certain affiliated
persons) will entitle the holder to purchase, for the Purchase Price, a number
of shares of Common Stock having a market value of twice the Purchase Price.
If, after any person has become an Acquiring Person, (1) the
Company is involved in a merger or other
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business combination in which the Company is not the surviving corporation
or its Common Stock is exchanged for other securities or assets or (2) the
Company and/or one or more of its subsidiaries sell or otherwise transfer
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries, taken as a whole, then each
Right will entitle the holder to purchase, for the Purchase Price, a number
of shares of common stock of the other party to such business combination
or sale (or in certain circumstances, an affiliate) having a market value
of twice the Purchase Price.
At any time after any person has become an Acquiring Person
(but before any person becomes the beneficial owner of 50% or more of the
outstanding shares of Common Stock), a majority of the Continuing Directors may
exchange all or part of the Rights (other than Rights beneficially owned by an
Acquiring Person and certain affiliated persons) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right.
The Board of Directors may redeem all of the Rights at a price
of $.01 per Right at any time prior to the close of business on the 10th
business day after the Stock Acquisition Date (or such later date as may be
designated by a majority of the Continuing Directors); provided that after any
person has become an Acquiring Person, the Rights may be redeemed only with
the approval of a majority of the Continuing Directors. Accordingly, after
there is an Acquiring Person, if the Board of Directors, or any portion
thereof, were replaced in a proxy solicitation or otherwise by persons who
were not Continuing Directors, any redemption of the Rights would require
the approval of the Continuing Directors, if any. If the Board of
Directors is so replaced after a person has become an Acquiring Person, it
is possible that there may be no Continuing Directors. In this
circumstance, the Rights may never be redeemed.
"Continuing Director" means any member of the Board of
Directors who was a member of the Board prior to the time an Acquiring Person
becomes such or any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing Directors.
Continuing Directors do not include an Acquiring Person, an affiliate or
associate of an Acquiring Person or any representative or nominee of the
foregoing.
The Rights will expire on November 4, 2006, unless earlier
exchanged or redeemed.
Prior to the Distribution Date, the Rights Agreement may be
amended in any respect. After the Distribution Date, the Rights Agreement may
be amended in
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any respect that does not adversely affect Rights holders (other
than any Acquiring Person and certain affiliated persons). After any person
has become an Acquiring Person, the Rights Agreement may be amended only with
the approval of a majority of the Continuing Directors.
Rights holders have no rights as a stockholder of the Company.
The Rights Agreement includes antidilution provisions designed
to prevent efforts to diminish the effectiveness of the Rights.
Each outstanding share of Common Stock on the Record Date will
receive one Right. Shares of Common Stock issued after the Record Date and
prior to the Distribution Date will be issued with a Right attached so that
all shares of Common Stock outstanding prior to the Distribution Date will
have Rights attached. 1,500,000 shares of Preferred Stock have been reserved
for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person that attempts to acquire the Company
without a condition to such an offer that a substantial number of the Rights
be acquired or that the Rights be redeemed or declared invalid. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors (or under some circumstances, by the Continuing
Directors) since the Rights may be redeemed by the Company as described above.
While the dividend of the Rights will not be taxable to
stockholders or to the Company, stockholders or the Company may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable as set forth above.
The terms and conditions of the Rights are set forth in a
Rights Agreement dated as of October 24, 1996 between the Company and First
Chicago Trust Company of New York, as Rights Agent (the "Rights Agreement"), a
copy of which is filed as an exhibit hereto. The foregoing description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
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<PAGE>
Item 2. Exhibits
1 and 2. Rights Agreement dated as of October 24, 1996
between Delta Air Lines, Inc. and First Chicago
Trust Company of New York, as Rights Agent, which
includes as Exhibit B thereto the form of Right
Certificate.
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<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned thereto duly
authorized.
DELTA AIR LINES, INC.
By: /s/ Thomas J. Roeck, Jr.
------------------------
Thomas J. Roeck, Jr.
Senior Vice President-
Finance and Chief
Financial Officer
Dated: November 4, 1996
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<PAGE>
RIGHTS AGREEMENT
dated as of
October 24, 1996
between
DELTA AIR LINES, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
<PAGE>
TABLE OF CONTENTS(1)
Page
Section 1. Definitions............................................... 1
Section 2. Appointment of Rights Agent............................... 6
Section 3. Issue of Right Certificates............................... 6
Section 4. Form of Right Certificates................................ 8
Section 5. Countersignature and Registration......................... 9
Section 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates............ 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights................................................... 11
Section 8. Cancellation and Destruction of Right
Certificates............................................. 13
Section 9. Reservation and Availability of Capital
Stock.................................................... 14
Section 10. Preferred Stock Record Date............................... 15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights........................................ 16
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(1) The Table of Contents is not a part of this Agreement.
<PAGE>
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.................................................. 28
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power........................................... 28
Section 14. Fractional Rights and Fractional
Shares.................................................. 31
Section 15. Rights of Action.......................................... 33
Section 16. Agreement of Right Holders................................ 34
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................................. 35
Section 18. Concerning the Rights Agent............................... 35
Section 19. Merger or Consolidation or Change of Name of Rights Agent. 36
Section 20. Duties of Rights Agent.................................... 37
Section 21. Change of Rights Agent.................................... 39
Section 22. Issuance of New Right
Certificates............................................ 41
Section 23. Redemption................................................ 41
<PAGE>
Section 24. Exchange.................................................. 42
Section 25. Notice of Proposed Actions................................ 43
Section 26. Notices................................................... 45
Section 27. Supplements and Amendments................................ 45
Section 28. Successors................................................ 46
Section 29. Determinations and Actions by the Board of Directors, etc. 46
Section 30. Benefits of this Agreement................................ 47
Section 31. Severability.............................................. 47
Section 32. Governing Law............................................. 47
Section 33. Counterparts.............................................. 48
Section 34. Descriptive Headings...................................... 48
Exhibit A - Certificate of Designations, Preferences and Rights of
Series D Junior Participating Preferred Stock
<PAGE>
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Stockholder Rights Plan
<PAGE>
RIGHTS AGREEMENT
AGREEMENT dated as of October 24, 1996, between Delta Air
Lines Inc., a Delaware corporation (the "Company"), and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on October 24, 1996 the Board of Directors of the
Company authorized and declared a dividend of one preferred stock purchase
right (a "Right") for each share of Common Stock (as hereinafter defined)
outstanding at the close of business on November 4, 1996 (the "Record Date")
and has authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right in respect of each share of Common Stock
issued after the Record Date, each Right representing the right to purchase,
upon the terms and subject to the conditions hereinafter set forth, one
one-hundredth of a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein, have
the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include the Company, any of its
Subsidiaries, any employee benefit plan of the Company or any of
its Subsidiaries or any Person organized, appointed or established
by the Company or any of its Subsidiaries for or pursuant to the
terms of any such plan; provided that if the majority of
Continuing Directors determines (whether prior to or after the
date that in the absence of such determination would be a
Distribution Date) in good faith that a Person who
<PAGE>
would otherwise be an "Acquiring Person" became such
inadvertently, and if such Person as promptly as practicable
divests itself of Beneficial Ownership of a sufficient number
of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," then such Person shall not be deemed
to be or to have become an "Acquiring Person" for any purposes
of this Agreement. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" solely as a result of an
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock
beneficially owned by such Person (together with all Affiliates
and Associates of such Person) to 15% or more of the shares of
Common Stock then outstanding; provided that if a Person shall
become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding by reason of such share
acquisition by the Company and shall thereafter become the
Beneficial Owner of any additional shares of Common Stock which
causes the proportionate number of shares of Common Stock
beneficially owned by such Person to increase to 15% or more of
the shares of Common Stock then outstanding, then such person
shall be deemed to be an "Acquiring Person".
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in
effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(a) which such Person or any of its Affiliates or
Associates, directly or indirectly, beneficially owns (as
determined pursuant to Rule 13d-3 under the Exchange Act as
in effect on the date hereof);
(b) which such Person or any of its Affiliates or
Associates, directly or indirectly, has
<PAGE>
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both)
pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise
(other than pursuant to the Rights); provided that a
Person shall not be deemed the "Beneficial Owner" of
or to "beneficially own" securities tendered pursuant
to a tender or exchange offer made by or on behalf of
such Person or any of its Affiliates or Associates
until such tendered securities are accepted for
payment or exchange; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both)
pursuant to any agreement, arrangement or
understanding (whether or not in writing) or
otherwise; provided that a Person shall not be deemed
the "Beneficial Owner" of or to "beneficially own" any
security under this clause (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy
or consent given in response to a public proxy or
consent solicitation made pursuant to the applicable
rules and regulations under the Exchange Act and (B)
is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or
successor report); or
(c) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as
<PAGE>
described in paragraph (b)(ii) immediately above) or
disposing of any such securities; provided that nothing
in paragraphs (a), (b) or (c) of this definition shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to
"beneficially own", any securities acquired through such
Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the
date of such acquisition.
"Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York
and the State of Georgia are authorized or obligated by law or
executive order to close.
"Close of business" on any given date means 5:00 P.M., New
York City time, on such date; provided that if such date is not a
Business Day "close of business" means 5:00 P.M., New York City
time, on the next succeeding Business Day.
"Common Stock" means the Common Stock, par value $3.00 per
share, of the Company, except that, when used with reference to
any Person other than the Company, "Common Stock" means the capital
stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or
direct the management, of such Person.
"Continuing Director" means any member of the Board of
Directors of the Company, while such Person is a member of the
Board, who is not an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate and either
(a) was a member of the Board immediately prior to the time any
Person becomes an Acquiring Person or (b) subsequently becomes a
member of the Board, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of
the Continuing Directors.
<PAGE>
"Distribution Date" means the earlier of (a) the close of
business on the tenth Business Day (or such later day as may be
designated by action of a majority of the Continuing Directors)
after the Stock Acquisition Date and (b) the close of business on
the tenth Business Day (or such later day as may be designated by
action of a majority of the Continuing Directors) after the date
of the commencement of a tender or exchange offer by any Person
if, upon consummation thereof, such Person would be an Acquiring
Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the earlier of (a) the Final
Expiration Date and (b) the time at which all Rights are redeemed
as provided in Section 23 or exchanged as provided in Section 24.
"Final Expiration Date" means the close of business on
November 4, 2006.
"Person" means an individual, corporation, partnership,
association, trust or any other entity or organization.
"Preferred Stock" means the Series D Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having
the terms set forth in the Certificate of Incorporation of the
Company as of the date hereof.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one
one-hundredth of a share of Preferred Stock (subject to adjustment
as provided herein) upon exercise of a Right, which price shall
initially be $300.00.
"Section 11(a)(ii) Event" means any event described in the
first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a).
<PAGE>
"Securities Act" means the Securities Act of 1933, as
amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D
under the Exchange Act (or any comparable or successor report)) by
the Company or an Acquiring Person indicating that an Acquiring
Person has become such; provided that no "Stock Acquisition Date"
shall be deemed to have occurred on such date if, pursuant to the
proviso to the first sentence of the definition of "Acquiring
Person", a Person is deemed (whether prior to or after the date
that would otherwise be a Stock Acquisition Date) not to be or
have become an "Acquiring Person".
"Subsidiary" of any Person means any other Person of which
securities or other ownership interests having voting power to
elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or
indirectly owned by such first Person.
"Trading Day" means a day on which the principal national
securities exchange on which the shares of Common Stock are listed
or admitted to trading is open for the transaction of business or,
if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable. If the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be
<PAGE>
evidenced by the certificates for the Common Stock and not by separate
Right Certificates (as hereinafter defined) and the registered holders of
the Common Stock shall be deemed to be the registered holders of the
associated Rights, and (ii) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock. As
soon as practicable after the Record Date, the Company will send a summary
of the Rights substantially in the form of Exhibit C hereto, by first-
class, postage prepaid mail, to each record holder of the Common Stock as
of the close of business on the Record Date at the address of such holder
shown on the records of the Company.
(b) As soon as practicable after the Company has notified
the Rights Agent of the occurrence of the Distribution Date, the Rights Agent
will send, by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, one or
more Right Certificates evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. If an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
Section 11(p), the Company shall, at the time of distribution of the Right
Certificates, make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a)) so that Right Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. From and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of
Common Stock outstanding as of the Record Date or issued (on original issuance
or out of treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. In addition, in connection with
the issuance or sale of shares of Common Stock following the Distribution Date
and prior to the Expiration Date, the Company (i) shall, with respect to
shares of Common Stock so issued or sold (x) pursuant to the exercise of stock
options or under any employee plan or arrangement or (y) upon the exercise,
conversion or exchange of other securities issued by the Company prior to the
Distribution Date and (ii) may, in any other case, if deemed necessary or
<PAGE>
appropriate by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided that no such Right Certificate shall be issued if, and to the
extent that, (i) the Company shall be advised by its counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued or
(ii) appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(d) Certificates for the Common Stock issued after the
Record Date but prior to the earlier of the Distribution Date and the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between Delta Air Lines, Inc. (the "Company") and
First Chicago Trust Company of New York dated as of October 24,
1996 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. The Company will
mail to the holder of this certificate a copy of the Rights
Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be evidenced by separate
certificates and no longer be evidenced by this certificate, may
be redeemed or exchanged or may expire. As set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may be null and void.
Section 4. Form of Right Certificates. (a) The certificates
evidencing the Rights (and the forms of assignment, election to purchase and
certificates to be printed on the reverse thereof) (the "Right
<PAGE>
Certificates") shall be substantially in the form of Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law, rule or
regulation or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. The
Right Certificates, whenever distributed, shall be dated as of the Record
Date.
(b) Any Right Certificate representing Rights beneficially
owned by any Person referred to in clauses (i), (ii) or (iii) of the first
sentence of Section 7(d) shall (to the extent feasible) contain the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may be or may become
null and void in the circumstances specified in Section 7(d) of
such Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company whose manual or facsimile signature is affixed to the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may, nevertheless, be countersigned by the Rights
Agent and issued and delivered with the same force and effect as though the
Person who signed such Right Certificates had not
<PAGE>
ceased to be such officer of the Company. Any Right Certificate may be
signed on behalf of the Company by any Person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
place for surrender of Right Certificates upon exercise, transfer or exchange,
<PAGE>
books for registration and transfer of the Right Certificates. Such books
shall show with respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the certificate
and the certificate number.
Section 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth below
in this Section 6(a), be transferred or exchanged for another Right
Certificate or Certificates evidencing a like number of Rights as the Right
Certificate or Certificates surrendered. Any registered holder desiring to
transfer or exchange any Right Certificate or Certificates shall surrender
such Right Certificate or Certificates (with, in the case of a transfer, the
form of assignment and certificate on the reverse side thereof duly executed)
to the Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate or Certificates until the registered holder
of the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject
to Sections 4(b), 7(d), 14 and 24, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates as so requested. The
Company may require payment of a sum sufficient to cover any transfer tax or
other governmental charge
<PAGE>
that may be imposed in connection with any transfer or exchange of any
Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will issue
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and (e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a)
and subject to Section 20(k), the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent therefor) certificates for the total
number of one one-hundredths of a share of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests) or (B) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon
<PAGE>
exercise of the Rights with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one one-
hundredths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of issuance of fractional shares in accordance with Section
14 and (iii) after receipt of such certificates or depositary receipts and
cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or
receipts registered in such name or names as may be designated by such
holder). If the Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities and assets are
available for delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the number of Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person
<PAGE>
(or in any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or any such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which a majority of the Continuing Directors have determined
is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(d), shall become null and
void without any further action, and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(d) and
Section 4(b) are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates
and Associates or any transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer pursuant to Section 6 or exercise
pursuant to this Section 7 unless such registered holder (i) shall have
completed and signed the certificate contained in the form of assignment or
election to purchase, as the case may be, set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise, as the case may
be, (ii) shall not have indicated an affirmative response to clause 1 or 2
thereof and (iii) shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer or exchange shall,
if surrendered to the Company or to any of its agents, be delivered to the
Rights Agent for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement. The
Company shall deliver to the Rights Agent for cancellation, and the Rights
Agent
<PAGE>
shall cancel, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the
exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all securities reserved for such issuance to be
listed on any such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts (i) to file, as
soon as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event as of which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon
as practicable after such filing and (iii) to cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the Expiration
Date. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or blue sky laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed 90 days after the date
set
<PAGE>
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not be
exercisable for securities in any jurisdiction if the requisite qualification
in such jurisdiction shall not have been obtained, such exercise therefor
shall not be permitted under applicable law or a registration statement in
respect of such securities shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all one one-hundredths of a
share of Preferred Stock issuable upon exercise of Rights shall, at the time
of delivery of the certificates for such securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
other governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of any Right
Certificates or of any certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right Certificate and, prior to any
such transfer, issuance or delivery, any such tax or other governmental charge
shall have been paid by the holder of such Right Certificate or it shall have
been established to the Company's satisfaction that no such tax or other
governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person (other than
the Company) in whose name any
<PAGE>
certificate for Preferred Stock is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of such
Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any transfer taxes
or other governmental charges) was made; provided that if the date of such
surrender and payment is a date upon which the transfer books of the
Company relating to the Preferred Stock are closed, such Person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
applicable transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. (a)(i) If the Company shall at any time after
the date of this Agreement (A) pay a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock
into a greater number of shares, (C) combine the outstanding Preferred Stock
into a smaller number of shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger involving the
Company), the Purchase Price in effect immediately prior to the record date
for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
other capital stock issuable on such date shall be proportionately adjusted so
that each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Preferred Stock or other capital stock,
as the case may be, which, if such Right
<PAGE>
had been exercised immediately prior to such date and at a time when the
applicable transfer books of the Company were open, such holder would have
been entitled to receive upon such exercise and by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
requires an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).
(ii) If at any time after the date of this Agreement, any
Person shall become an Acquiring Person, then proper provision shall promptly
be made so that each holder of a Right shall (except as otherwise provided
herein, including Section 7(d)) thereafter be entitled to receive, upon
exercise thereof on or after the Distribution Date at the Purchase Price in
effect immediately prior to the first occurrence of a Section 11(a)(ii) Event,
in lieu of Preferred Stock, such number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock of the Company (such
shares being referred to herein as the "Adjustment Shares") as shall be equal
to the result obtained by dividing
(x) the product obtained by multiplying the Purchase Price
in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to such first occurrence (such product being thereafter
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by
(y) 50% of the current market price (determined pursuant
to Section 11(d)(i)) per share of Common Stock on the date of such
first occurrence;
provided that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
<PAGE>
(iii) If the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not outstanding
or reserved for issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), the Company shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A) (to the extent available) Common Stock and
then, (B) (to the extent available) other equity securities of the Company
which a majority of the Continuing Directors has determined to be essentially
equivalent to shares of Common Stock in respect to dividend, liquidation and
voting rights (such securities being referred to herein as "common stock
equivalents") and then, if necessary, (C) other equity or debt securities of
the Company, cash or other assets, a reduction in the Purchase Price or any
combination of the foregoing, having an aggregate value (as determined by a
majority of the Continuing Directors based upon the advice of a nationally
recognized investment banking firm selected by a majority of the Continuing
Directors) equal to the value of the Adjustment Shares; provided that (x) the
Company may, and (y) if the Company shall not have made adequate provision as
required above to deliver value within 30 days following the later of the first
occurrence of a Section 11(a)(ii) Event and the first date that the right to
redeem the Rights pursuant to Section 23 shall expire, then the Company shall
be obligated to, deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, (1) (to the extent available)
Common Stock and then (2) (to the extent available) common stock equivalents
and then, if necessary, (3) other equity or debt securities of the Company,
cash or other assets or any combination of the foregoing, having an aggregate
value (as determined by a majority of the Continuing Directors based upon the
advice of a nationally recognized investment banking firm selected by a
majority of the Continuing Directors) equal to the excess of the value of the
Adjustment Shares over the Purchase Price. If a majority of the Continuing
Directors shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the 30 day period set forth above (such
period, as it may be extended, being referred to
<PAGE>
herein as the "Substitution Period") may be extended to the extent
necessary, but not more than 90 days following the first occurrence of a
Section 11(a)(ii) Event, in order that the Company may seek stockholder
approval for the authorization of such additional shares. To the extent
that the Company determines that some action is to be taken pursuant to the
first and/or second sentence of this Section 11(a)(iii), the Company (X)
shall provide, subject to Section 7(d), that such action shall apply
uniformly to all outstanding Rights and (Y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form and value of any consideration to be delivered as referred
to in such first and/or second sentence. If any such suspension occurs,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the current market price per share of Common Stock (as determined
pursuant to Section 11(d)) on the later of the date of the first occurrence
of a Section 11(a)(ii) Event and the first date that the right to redeem
the Rights pursuant to Section 23 shall expire; any common stock equivalent
shall be deemed to have the same value as the Common Stock on such date;
and the value of other securities or assets shall be determined pursuant to
Section 11(d)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or securities having
the same rights, privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into or exercisable
for Preferred Stock (or equivalent preferred stock) at a price per share of
Preferred Stock (or equivalent preferred stock) (in each case, taking account
of any conversion or exercise price) less than the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date shall be
<PAGE>
determined by multiplying the Purchase Price in effect immediately prior to
such date by a fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate price (taking account of any conversion
or exercise price) of the total number of shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered would purchase at such current
market price and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock (and/or equivalent preferred stock) so to be
offered. In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving the
Company) of evidences of indebtedness, equity securities other than Preferred
Stock, assets (other than a regular periodic cash dividend out of the earnings
or retained earnings of the Company) or rights, options or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section
11(d)) per share of Preferred Stock on such record date, less the value (as
determined pursuant to Section 11(d)(iii)) of such evidences of indebtedness,
equity securities, assets,
<PAGE>
rights, options or warrants so to be distributed with respect to one share
of Preferred Stock and the denominator of which shall be such current
market price per share of Preferred Stock. Such adjustment shall be made
successively whenever such a record date is fixed, and if such distribution
is not so made, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder
other than computations made pursuant to Section 11(a)(iii) or 14, the
"current market price" per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the 30 consecutive Trading Days immediately prior to such date; for
purposes of computations made pursuant to Section 11(a)(iii), the "current
market price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; and for purposes of
computations made pursuant to Section 14, the "current market price" per share
of Common Stock for any Trading Day shall be deemed to be the closing price
per share of Common Stock for such Trading Day; provided that if the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities exercisable for or convertible into shares of such Common
Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the "current market price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or,
<PAGE>
if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use or, if on any
such date the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any such
date no market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board of Directors
of the Company (or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors) shall be used. If the
Common Stock is not publicly held or not so listed or traded, the "current
market price" per share means the fair value per share as determined in good
faith by the Board of Directors of the Company, or, if at the time of such
determination there is an Acquiring Person, by a majority of the Continuing
Directors, or if there are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in Section 11(d)(i)
(other than the last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in such manner, the "current
market price" per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends
<PAGE>
and recapitalizations with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share of
Common Stock (as determined pursuant to Section 11(d)(i) (other than the
last sentence thereof)). If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, the "current market price"
per share of the Preferred Stock shall be determined in the same manner as
set forth in the last sentence of Section 11(d)(i). For all purposes of
this Agreement, the "current market price" of one one-hundredth of a share
of Preferred Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 100.
(iii) For the purpose of any computation hereunder, the
value of any securities or assets other than Common Stock or Preferred Stock
shall be the fair value as determined in good faith by the Board of Directors
of the Company, or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors, or, if there are no
Continuing Directors, by a nationally recognized investment banking firm
selected by the Board of Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common
Stock or other share or one-millionth of a share of Preferred Stock, as the
case may be.
(f) If at any time, as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a), the holder of any Right shall
be entitled to receive upon exercise of such Right any shares of capital stock
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase
<PAGE>
Price thereof shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a), (b), (c), (e),
(g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
one-hundredths of a share of Preferred Stock and other capital stock of the
Company issuable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which such
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price
<PAGE>
in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per one one-hundredth of a share and the number of shares which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the par value, if any, of the
number of one one-hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its
<PAGE>
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-hundredths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the number of one one-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided that the
Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any (i) consolidation or subdivision
of the Preferred Stock, (ii) issuance wholly for cash of any Preferred Stock
at less than the current market price, (iii) issuance wholly for cash of
Preferred Stock or securities which by their terms are convertible into or
exercisable for Preferred Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to the holders of its Preferred Stock, shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it will not at
any time after the Distribution Date (i) consolidate, merge or otherwise
combine with or (ii) sell or otherwise transfer (and/or permit any of its
Subsidiaries to sell or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its
<PAGE>
Subsidiaries, taken as a whole, to any other Person or Persons if (x) at
the time of or immediately after such consolidation, merger, combination or
sale there are any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, combination or sale, the stockholders of
a Person who constitutes, or would constitute, the "Principal Party" (as
hereinafter defined) for the purposes of Section 13 shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that after the
Distribution Date, it will not, except as permitted by Sections 23, 24 and 27,
take (or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, if at any time after the date hereof and prior to the Distribution
Date the Company shall (i) pay a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock into a larger number of shares or (iii) combine the outstanding Common
Stock into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered thereafter
as contemplated by Section 3(c), shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
<PAGE>
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in the manner set forth in Section 26. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, following the Stock Acquisition Date, directly or
indirectly,
(x) the Company shall consolidate with, merge into, or
otherwise combine with, any other Person, and the Company shall
not be the continuing or surviving corporation of such
consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine
with, the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and, in
connection with such merger or combination, all or part of the
outstanding shares of Common Stock shall be changed into or
exchanged for other stock or securities of the Company or any
other Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries
shall sell or otherwise transfer, in one transaction or a series
of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
<PAGE>
(1) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of any Triggering Event, such number of duly
authorized, validly issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), not
subject to any rights of call or first refusal, liens, encumbrances or other
claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price
in effect immediately prior to the first occurrence of any
Triggering Event by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to such first occurrence (such product being thereafter
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by
(B) 50% of the current market price (determined pursuant
to Section 11(d)(i)) per share of the Common Stock of such
Principal Party on the date of consummation of such consolidation,
merger, combination, sale or transfer;
(2) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, combination, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(3) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and
(4) such Principal Party shall take such steps (including
the authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in accordance with
this Section 13(a)) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may
<PAGE>
be, in relation to the shares of its Common Stock thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section
13(a)(x) or (y), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in
such merger, consolidation or combination, and if no securities
are so issued, the Person that survives or results from such
merger, consolidation or combination; and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided that in any such case, (A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, combination, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its Common Stock
which are not outstanding or otherwise reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in Section 13(a) and (b) and providing that, as soon as practicable
after the date of any
<PAGE>
consolidation, merger, combination, sale or transfer mentioned in Section
13(a), the Principal Party will
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon
exercise of the Rights, and will use its best efforts to cause
such registration statement (A) to become effective as soon as
practicable after such filing and (B) to remain effective (with a
prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, combinations, sales or other transfers. If any Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
price of a whole Right. For purposes of this Section 14(a), the current
market price of a whole Right shall be the closing price of a Right for the
Trading Day immediately prior to the date on which such fractional Rights
would otherwise have been issuable. The closing price of a Right for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not listed or admitted to
<PAGE>
trading on the New York Stock Exchange, on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company, or, if at the time
of such selection there is an Acquiring Person, by a majority of the
Continuing Directors. If on any such date no such market maker is making a
market in the Rights, the current market price of the Rights on such date shall
be as determined in good faith by the Board of Directors of the Company, or,
if at the time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). In lieu of any such fractional
shares of Preferred Stock, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market price of one
one-hundredth of a share of Preferred Stock. For purposes of this Section
14(b), the current market price of one one-hundredth of a share of Preferred
Stock shall be one one-hundredth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of any Triggering Event or
upon any exchange pursuant to Section 24, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise of the Rights or to
<PAGE>
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as herein provided an amount in cash equal to the same fraction
of the current market price of a share of Common Stock. For purposes of this
Section 14(c), the current market price of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
any certificate representing Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of, any Person
subject to this Agreement.
<PAGE>
Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the
Rights Agent may deem and treat the Person in whose name a Right Certificate
(or, prior to the Distribution Date, a certificate representing shares of
Common Stock) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificate or the certificate representing shares of Common Stock
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(d), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation; provided that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
<PAGE>
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the execution or administration of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
<PAGE>
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
<PAGE>
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any "Acquiring
Person" and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, the President or any Vice President and by the Treasurer or any
Assistant Treasurer or the Controller or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
<PAGE>
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 7(d)) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or
24, or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, the President or any Vice
President or the Secretary or any Assistant Secretary or the Treasurer or any
Assistant Treasurer or the Controller of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken, suffered or omitted to be taken by
it in good faith in accordance with instructions of any such officer.
<PAGE>
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or to any
holders of Rights resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the cases may be, has
either not been completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days notice in writing mailed to the Company and to each
transfer agent of the Common Stock and Preferred
<PAGE>
Stock by registered or certified mail, and, subsequent to the Distribution
Date, to the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
days notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock by registered or certified mail, and, subsequent to the
Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under
the laws of the United States or of any state of the United States, in good
standing, having a principal office in the State of New York or the State
of Georgia, which is authorized under such laws to exercise stock transfer
or corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b)
an Affiliate of a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and, subsequent
to the Distribution
<PAGE>
Date, mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this
Section 21, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of stock issuable upon exercise of the Rights made in accordance with
the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of (i) the close
of business on the tenth Business Day after the Stock Acquisition Date (or
such later date as a majority of the Continuing Directors may designate prior
to such time as the Rights are no longer redeemable) and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided that after any Person has
become an Acquiring Person, any redemption of the Rights shall be effective
only if there are Continuing Directors then in office, and such redemption
shall have been approved by a majority of such Continuing Directors.
Notwithstanding anything in this Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights and without any further action
and without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights
<PAGE>
shall be to receive the Redemption Price for each Right so held. The
Company shall promptly thereafter give notice of such redemption to the
Rights Agent and the holders of the Rights in the manner set forth in
Section 26; provided that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in Section 23 or 24, and other than in
connection with the purchase, acquisition or redemption of shares of Common
Stock prior to the Distribution Date.
Section 24. Exchange. (a) At any time after any Person becomes
an Acquiring Person, a majority of the Continuing Directors may, at their
option, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to Section
7(d)) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any of its
Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company
or any of its Subsidiaries for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Continuing
Directors electing to exchange any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights will terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the
<PAGE>
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly thereafter give notice of such exchange to the
Rights Agent and the holders of the Rights to be exchanged in the manner
set forth in Section 26; provided that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to Section 7(d)) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute common stock equivalents (as defined in
Section 11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the
initial rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so
that each common stock equivalent delivered in lieu of each share of Common
Stock shall have essentially the same dividend, liquidation and voting rights
as one share of Common Stock.
Section 25. Notice of Proposed Actions. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision or combination of
outstanding shares of Preferred Stock) or (iv) to effect any consolidation or
merger with any other Person, or to effect and/or to permit one or more
<PAGE>
of its Subsidiaries to effect any sale or other transfer, in one
transaction or a series of related transactions, of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries, taken as a whole, to any other Person or Persons, or (v)
to effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a Right, to the
extent feasible and in accordance with Section 26, a notice of such
proposed action, which shall specify the record date for the purposes of
any such dividend, distribution or offering of rights or warrants, or the
date on which any such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, and in the case of
any such other action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
Preferred Stock, whichever shall be the earlier. The failure to give
notice required by this Section or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon
any such action.
(b) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date a public filing by the Company with
the Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for purposes
of this Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such
case, (1) the Company shall as soon as practicable thereafter give to each
holder of a Right, in accordance with Section 26, a notice of the occurrence
of such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) or 13, as the case may be, and
(2) all references in Section 25(a) to Preferred Stock
<PAGE>
shall be deemed thereafter to refer to Common Stock or other capital stock,
as the case may be.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of the Company indicated on
the signature page hereof or such other address as the Company shall specify in
writing to the Rights Agent. Subject to the provisions of Section 21, any
notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to
the address of the Rights Agent indicated on the signature page hereof or such
other address as the Rights Agent shall specify in writing to the Company.
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, to the holder of any certificate representing shares
of Common Stock) shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of such holder shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing shares of Common Stock. From and
after the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (a) to cure any ambiguity, (b) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (c) to change or supplement
the provisions hereof in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Notwithstanding the foregoing, after any Person has become
an Acquiring Person, any supplement or amendment shall be effective only if
there are Continuing Directors then in office,
<PAGE>
and such supplement or amendment shall have been approved by a majority of
such Continuing Directors. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section,
the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange
Act as in effect on the date of this Agreement. The Board of Directors of the
Company (or, where specifically provided for herein, the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including the right and power to (i) interpret the provisions of
this Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or exchange or not to redeem or exchange the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board (or, after any
Person has become an Acquiring Person, by a majority of the Continuing
Directors) in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the
<PAGE>
Board of Directors of the Company or the Continuing Directors to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the certificates representing the shares of Common Stock)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (or, after any Person has become an Acquiring Person,
a majority of the Continuing Directors) determines in its good faith judgment
that severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the Board
of Directors or Continuing Directors, as the case may be.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State, except that the
<PAGE>
rights and obligations of the Rights Agent shall be governed by the law of the
State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
Section 34. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a part of this
Agreement and shall be ignored in the construction and interpretation hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
Attest: DELTA AIR LINES, INC.
By: _____________________ By:______________________
Name: Name:
Title: Title:
Hartsfield Atlanta
International Airport
Atlanta, Georgia 30320
Attention: General Counsel
Attest: FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By: ____________________ By:______________________
Name: Name:
Title: Title:
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders and
Exchanges Administration
<PAGE>
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
OF
SERIES D JUNIOR PARTICIPATING
PREFERRED STOCK
OF
DELTA AIR LINES, INC.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, Ronald W. Allen, Chairman of the Board, President and Chief
Executive Officer, and Robert S. Harkey, Corporate Secretary, of Delta Air
Lines, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, the Board of
Directors on October 24, 1996, adopted the following resolution creating a
series of 1,500,000 shares of Preferred Stock designated as Series D Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Company in accordance with the provisions of its Certificate
of Incorporation (the "Charter"), a series of Preferred Stock of the Company
be, and it hereby is, created and classified, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Number of Shares. The shares of
such series shall be designated as "Series D Junior Participating Preferred
Stock" (the "Series D Preferred Stock"), and the number of shares constituting
<PAGE>
such series shall be 1,500,000. Such number of shares of the Series D
Preferred Stock may be increased or decreased by resolution of the Board of
Directors; provided that no decrease shall reduce the number of shares of
Series D Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares issuable upon exercise or conversion of
outstanding rights, options or other securities issued by the Company.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series D Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on the
first day of March, June, September and December of each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of any
share or fraction of a share of Series D Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 and (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends or other cash distributions
and 100 times the aggregate per share amount of all non-cash dividends or
other non-cash distributions (other than (i) a dividend payable in shares of
Common Stock, par value $3.00 per share, of the Company (the "Common Stock")
or (ii) a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series D Preferred Stock. If the Company shall at
any time after November 4, 1996 (the "Rights Declaration Date") pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series D Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior
to such event.
(B) The Company shall declare a dividend or distribution on
the Series D Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than
as described in clauses (i) and (ii) of the first sentence of paragraph (A));
provided that if no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date (or, with respect to the
first Quarterly Dividend Payment Date, the period between the first issuance
of any share or fraction of a share of Series D Preferred Stock and such first
Quarterly Dividend Payment Date), a dividend of $1.00 per share on the Series
D Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series D Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series D
Preferred Stock, unless the date of issue of such shares is on or before the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a date after the
record date for the determination of holders of shares of Series D Preferred
Stock entitled to receive a quarterly dividend and on or before such Quarterly
Dividend Payment Date, in which case dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on shares of Series D
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series D Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series D Preferred Stock
shall have the following voting rights:
<PAGE>
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series D Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of stockholders of the
Company. If the Company shall at any time after the Rights Declaration Date
pay any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series D Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series D Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a vote
of stockholders of the Company.
(C) (i) If at any time dividends on any Series D Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series
D Preferred Stock then outstanding shall have been declared and paid or set
apart for payment. During each default period, all holders of Preferred Stock
(including holders of the Series D Preferred Stock) with dividends in arrears
in an amount equal to six quarterly dividends thereon, voting together as a
single class, irrespective of series, shall have the right to elect two
Directors and, to the extent necessary to permit the election of such
Directors, the number of Directors constituting the Board of Directors of the
Company shall be increased to the maximum number of Directors then permitted
by the Company's Charter. In the event that such increase does not result in
a sufficient number of vacancies to allow the election of two Directors by the
holders of the Series D Preferred Stock, then, at the next annual meeting, the
Board of Directors of the Company shall take such action as is necessary to
allow such holders to elect a number of
<PAGE>
directors so that the number of Directors elected by such holders at all
times equals two.
(ii) During any default period, such voting right of the
holders of Series D Preferred Stock may be exercised initially at a special
meeting called pursuant to paragraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless
the holders of 10% in number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a quorum of holders of
Common Stock shall not affect the exercise by holders of Preferred Stock of
such voting right. At any meeting at which holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special meeting does
not equal two, the holders of the Preferred Stock shall have the right at the
next annual meeting to elect a number of Directors as shall be necessary to
permit the election by them of two Directors. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series D Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request,
the calling of special meeting of holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice President or the Secretary
of the Company. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred Stock by mailing
a copy of
<PAGE>
such notice to him at his last address as the same appears on the books of
the Company. Such meeting shall be called for a time not earlier than 20
days and not later than 60 days after such order or request or in default
of the calling of such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10% of the total number
of shares of Preferred Stock outstanding, irrespective of series.
Notwithstanding the provisions of this paragraph (C)(iii), no such special
meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Company if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References
in this paragraph (C) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of Directors shall be
such number as may be provided for in the Charter or bylaws irrespective of
any increase made pursuant to the provisions of paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter in any
manner provided by law or in the Charter or bylaws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
<PAGE>
(D) The Charter of the Company shall not be amended in any
manner (whether by merger or otherwise) so as to adversely affect the powers,
preferences or special rights of the Series D Preferred Stock without the
affirmative vote of the holders of a majority of the outstanding shares of
Series D Preferred Stock, voting separately as a class.
(E) Except as otherwise provided herein, holders of Series D
Preferred Stock shall have no special voting rights, and their consent shall
not be required for taking any corporate action. As used in this Section 3,
"Preferred Stock" shall not include or be construed to encompass any other
class or series of preferred stock of the Company unless the certificate of
designations, preferences and rights of such other class or series expressly
so states.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series D Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series D
Preferred Stock shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series D Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series D Preferred Stock, except dividends paid ratably on the Series
D Preferred Stock and all such other parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series D Preferred
Stock; provided that the Company may at any time redeem, purchase or
otherwise
<PAGE>
acquire shares of any such junior stock in exchange for shares of
stock of the Company ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series D Preferred
Stock; or
(iv) redeem, purchase or otherwise acquire for value any
shares of Series D Preferred Stock, or any shares of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series D Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of Series D
Preferred Stock and all such other parity stock upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for value any shares of stock of the Company
unless the Company could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series D
Preferred Stock redeemed, purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors as permitted by
the Charter or as otherwise permitted under the General Corporation Law of the
State of Delaware.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series D
Preferred Stock unless, prior thereto, the holders of shares of Series D
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the
<PAGE>
date of such payment; provided that the holders of shares of Series D
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series D
Preferred Stock, except distributions made ratably on the Series D
Preferred Stock and all such other parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Company shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable
in shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of shares of Series D Preferred
Stock were entitled immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the shares of
Series D Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Company shall
at any time after the Rights Declaration Date pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision or combination of
the outstanding shares of Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series D Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the
<PAGE>
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. No Redemption. The Series D Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series D Preferred Stock shall rank
junior (as to dividends and upon liquidation, dissolution and winding up) to
all other series of the Company's Preferred Stock except any series that
specifically provides that such series shall rank pari passu with or junior to
the Series D Preferred Stock.
Section 10. Fractional Shares. Series D Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series D Preferred Stock.
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this 24th day of October, 1996.
DELTA AIR LINES, INC.
_________________________
Ronald W. Allen
Chairman of the Board,
President and Chief
Executive Officer
Attest:
______________________
Robert S. Harkey
Corporate Secretary
<PAGE>
Exhibit B
[Form of Right Certificate]
No. R- ____________Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 4, 2006 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET
FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.](1)
RIGHT CERTIFICATE
DELTA AIR LINES, INC.
This Right Certificate certifies that ______________________,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the holder (upon the terms and subject to
the conditions set forth in the Rights Agreement dated as of October 24, 1996
(the "Rights Agreement") between Delta Air Lines, Inc., a Delaware corporation
(the "Company"), and First Chicago Trust Company of New York (the "Rights
Agent")) to purchase from the Company, at any time after the Distribution Date
and prior to the Expiration Date, ___ one-hundredth[s] of a fully paid,
nonassessable share of Series D Junior Participating Preferred Stock (the
- ------------
(1) If applicable, insert this portion of the legend and delete the preceding
sentence.
<PAGE>
"Preferred Stock") of the Company at a purchase price of $___ per one
one-hundredth of a share (the "Purchase Price"), payable in lawful money of
the United States of America, upon surrender of this Right Certificate, with
the form of election to purchase and related certificate duly executed, and
payment of the Purchase Price at an office of the Rights Agent designated for
such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and
the number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of October 24, 1996, and may have been
or in the future be adjusted as a result of the occurrence of certain events,
as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee
of an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such, such Rights shall
become null and void, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement.
<PAGE>
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions set
forth in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors (or, with respect to paragraph (b) below, the Continuing Directors)
of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of
business on the tenth Business Day after the Stock Acquisition Date
(or such later date as a majority of the Continuing Directors may
designate prior to such time as the Rights are no longer redeemable)
and (ii) the Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $.01 per Right;
or
(b) at any time after any Person becomes an Acquiring Person
(but before such Person becomes the Beneficial Owner of 50% or more
of the shares of Common Stock then outstanding), exchange all or part
of the then outstanding Rights (other than Rights held by the
Acquiring Person and certain related Persons) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right.
If the Rights shall be exchanged in part, the holder of this Right
Certificate shall be entitled to receive upon surrender hereof
another Right Certificate or Certificates for the number of whole
Rights not exchanged.
No fractional shares of Preferred Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole
Rights not exercised.
<PAGE>
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal by its authorized officers.
Dated as of ________________, ____
DELTA AIR LINES, INC.
By______________________
Title:
[SEAL]
Attest:
_______________________________
Secretary
<PAGE>
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
By______________________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
<PAGE>
FOR VALUE RECEIVED _______________________________________
hereby sells, assigns and transfers unto _________________
__________________________________________________________
(Please print name and address of transferee)
__________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, ____
___________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being assigned by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ ________________________
Signature
__________
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
__________
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: Delta Air Lines, Inc.
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase shares
of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________
(Please print name and address)
___________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
___________________________________________________________
(Please print name and address)
___________________________________________________________
Dated: ________________, ____
___________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
<PAGE>
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ ________________________
Signature
__________
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
__________
<PAGE>
Exhibit C
Delta Air Lines, Inc.
SUMMARY OF STOCKHOLDER RIGHTS PLAN
Form of Security: The Board of Directors declared a dividend of
one preferred stock purchase right (a "Right")
for each outstanding share of the Company's
Common Stock, payable to holders of record as of
the close of business on November 4, 1996. A
Right will also be issued for each share of the
Company's Common Stock issued after November 4,
1996.
Transfer: Prior to the Distribution Date(1), the Rights
will be evidenced by the certificates for and
will be transferred with the Common Stock. The
registered holders of the Common Stock will be
deemed to be the registered holders of the
Rights.
After the Distribution Date, the Rights Agent
will mail separate certificates evidencing the
Rights to each record holder of the Common Stock
as of the close of business on the Distribution
Date. Thereafter the Rights will be transferable
separately from the Common Stock.
(1) Distribution Date means the earlier of (1) the 10th business day
after public announcement that any person or group has become the
beneficial owner of 15% or more of the Company's Common Stock and (2) the
10th business day after the date of the commencement of a tender or
exchange offer by any person which would, if consummated, result in such
person becoming the beneficial owner of 15% or more of the Company's Common
Stock. In each case, the 10 business day period is subject to extension by
a majority of the Continuing Directors (as defined in note 3).
<PAGE>
Exercise: Prior to the Distribution Date, the Rights will
not be exercisable.
After the Distribution Date, each Right will be
exercisable to purchase, for $300 (the "Purchase
Price"), one one-hundredth of a share of Series
D Junior Participating Preferred Stock, par
value $1.00 per share, of the Company.
Flip-In: If any person or group becomes the beneficial
owner of 15% or more of the Company's Common
Stock (an "Acquiring Person"(2)), then each Right
(other than Rights beneficially owned by the
Acquiring Person and certain affiliated persons)
will entitle the holder to purchase, for the
Purchase Price, a number of shares of the
Company's Common Stock having a market value of
twice the Purchase Price.
Flip-Over: If, after any person has become an Acquiring
Person, (1) the Company is involved in a merger
or other business combination in which the
Company is not the surviving corporation or its
Common Stock is exchanged for other securities or
assets or (2) the Company and/or one or more of
its subsidiaries sell or otherwise transfer
assets or earning power aggregating more than
50% of the assets or earning power of the
Company and its subsidiaries, taken as a whole,
then each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to
such business combination or sale (or in certain
circumstances, an
<PAGE>
affiliate) having a market value of twice the
Purchase Price.
Exchange: At any time after any person has become an
Acquiring Person (but before any person becomes
the beneficial owner of 50% or more of the
Company's Common Stock), a majority of the
Continuing Directors(3) may exchange all or part
of the Rights (other than the Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) for shares of Common
Stock at an exchange ratio of one share of
Common Stock per Right.
Redemption: The Board of Directors may redeem all of the
Rights at a price of $.01 per Right at any time
prior to the close of business on the 10th
business day after public announcement that any
person has become an Acquiring Person (subject
to extension by a majority of the Continuing
Directors); provided that after any person has
become an Acquiring Person, the Rights may be
redeemed only with the approval of a majority of
the Continuing Directors.
Expiration: The Rights will expire on November 4, 2006,
unless earlier exchanged or redeemed.
<PAGE>
Amendments: Prior to the Distribution Date, the Rights
Agreement may be amended in any respect.
After the Distribution Date, the Rights
Agreement may be amended in any respect that
does not adversely affect the Rights holders
(other than any Acquiring Person and certain
(2) "Acquiring Person" does not include the
Company, any subsidiary or any employee benefit
plan of the Company or any of its subsidiaries.
(3) "Continuing Director" means any member of the
Board of Directors who was a member of the Board
prior to the time an Acquiring Person becomes
such or any person who is subsequently elected
to the Board if such person is recommended or
approved by a majority of the Continuing
Directors. Continuing Directors do not include
an Acquiring Person, an affiliate or associate
of an Acquiring Person or any representative or
nominee of the foregoing.
affiliated persons).
After any person has become an Acquiring Person,
the Rights Agreement may be amended only with
the approval of a majority of the Continuing
Directors.
Voting Rights: Rights holders have no rights as a stockholder
of the Company.
Antidilution The Rights Agreement includes
Provisions: antidilution provisions designed to prevent
efforts to diminish the efficacy of the Rights.
Taxes: While the dividend of the Rights will not be
taxable to stockholders or to the Company,
stockholders or the Company may, depending upon
the circumstances, recognize taxable income in
the event that the Rights become exercisable as
set forth above.
_______________
A copy of the Stockholders Rights Plan (the "Plan") has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A. A copy of the Plan is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Plan.
