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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
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FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AIRBORNE FREIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 91-0837469
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
3101 Western Avenue
P.O. Box 662
Seattle, WA 98111
(Address, including zip code, of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Rights to Purchase New York Stock Exchange
Series A Participating Cumulative Pacific Stock Exchange
Preferred Stock
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A.(c)(1), please check the following box.[ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A.(c)(2),
please check the following box. [ ]
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 Securities to be Registered.
On February 4, 1997, the Board of Directors of Airborne
Freight Corporation (the "Company") declared a dividend of one Right for
each outstanding share of Common Stock, par value $1.00 per share, of the
Company (the "Common Shares"). The Rights will be issued to the holders of
record of Common Shares outstanding on February 14, 1997, and with respect
to Common Shares issued thereafter until the Distribution Date (as defined
below) and, in certain circumstances, with respect to Common Shares issued
after the Distribution Date. Each Right, when it becomes exercisable as
described below, will entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Participating Cumulative
Preferred Stock, without par value, of the Company (the "Preferred Shares")
at a price of $110 (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of February 14, 1997
(the "Rights Agreement"), between the Company and The Bank of New York, as
Rights Agent (the "Rights Agent").
Until the earlier of (i) such time as the Company learns
that a person or group (including any affiliate or associate of such person
or group) has acquired, or has obtained the right to acquire, beneficial
ownership of more than 20% of the outstanding Common Shares (such person or
group being an "Acquiring Person"), except that any such person or group
that has acquired or has obtained the right to acquire beneficial ownership
of more than 90% of the outstanding Common Shares pursuant to a Qualifying
Offer (as defined below) shall not become an Acquiring Person until the
close of business on the fifth complete business day after the date on
which such beneficial ownership is acquired, and (ii) such date, if any, as
may be designated by the Board of Directors of the Company following the
commencement of, or first public disclosure of an intent to commence, a
tender or exchange offer for outstanding Common Shares which could result
in such person or group becoming the beneficial owner of more than 20% of
the outstanding Common Shares, other than pursuant to a Qualifying Offer
(the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced by the certificates for Common Shares registered
in the names of the holders thereof (which certificates for Common Shares
shall also be deemed to be Right Certificates, as defined below) and not by
separate Right Certificates. Therefore, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date (and to each initial record holder of
certain Common Shares originally issued after the Distribution Date), and
such separate Right Certificates alone will thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date
and will expire on February 14, 2007 (the "Expiration Date") unless earlier
redeemed by the Company as described below.
The number of Preferred Shares or other securities issuable
upon exercise of a Right, the Purchase Price, the Redemption Price (as
defined below) and the number of Rights associated with each outstanding
Common Share are all subject to adjustment by the Board of Directors of the
Company in the event of any change in the Common Shares or the Preferred
Shares, whether by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to
holders of Common Shares or Preferred Shares, as the case may be (other
than distribution of the Rights or regular quarterly cash dividends) or
otherwise.
<PAGE>
The Preferred Shares are authorized to be issued in
fractions which are an integral multiple of one one-hundredth of a
Preferred Share. The Company may, but is not required to, issue fractions
of shares upon the exercise of Rights, and, in lieu of fractional shares,
the Company may issue certificates or utilize a depository arrangement as
provided by the terms of the Preferred Shares and, in the case of fractions
other than one one-hundredth of a Preferred Share or integral multiples
thereof, may make a cash payment based on the market price of such shares.
At such time there is an Acquiring Person, the Rights will
entitle each holder (other than such Acquiring Person (or any affiliate or
associate of such Acquiring Person)) of a Right to purchase, for the
Purchase Price, that number of one one-hundredths of a Preferred Share
equivalent to the number of Common Shares which at the time of such event
would have a market value of twice the Purchase Price.
In the event the Company is acquired in a merger or other
business combination by an Acquiring Person or an associate or affiliate of
an Acquiring Person that is a publicly traded corporation or 50% or more of
the Company's assets or assets representing 50% or more of the Company's
revenues or cash flow are sold, leased, exchanged or otherwise transferred
(in one or more transactions) to an Acquiring Person or an associate or
affiliate of an Acquiring Person that is a publicly traded corporation,
each Right will entitle its holder (subject to the next paragraph) to
purchase, for the Purchase Price, that number of common shares of such
corporation which at the time of the transaction would have a market value
of twice the Purchase Price. In the event the Company is acquired in a
merger or other business combination by an Acquiring Person or an associate
or affiliate of an Acquiring Person that is not a publicly traded entity or
50% or more of the Company's assets or assets representing 50% or more of
the Company's revenues or cash flow are sold, leased, exchanged or
otherwise transferred (in one or more transactions) to an Acquiring Person
or an associate or affiliate of an Acquiring Person that is not a publicly
traded entity, each Right will entitle its holder (subject to the next
paragraph) to purchase, for the Purchase Price, at such holder's option,
(i) that number of shares of the surviving corporation in the transaction
with such entity (which surviving corporation could be the Company) which
at the time of the transaction would have a book value of twice the
Purchase Price, (ii) that number of shares of such entity which at the time
of the transaction would have a book value of twice the Purchase Price or
(iii) if such entity has an affiliate which has publicly traded common
shares, that number of common shares of such affiliate which at the time of
the transaction would have a market value of twice the Purchase Price.
Any Rights that are at any time beneficially owned by an
Acquiring Person (or any affiliate or associate of an Acquiring Person)
will be null and void and nontransferable and any holder of any such Right
(including any purported transferee or subsequent holder) will be unable to
exercise or transfer any such Right.
The Rights Plan will not apply to any Qualifying Offer.
Accordingly, the Rights will not become exercisable in the case of a tender
offer that constitutes a Qualifying Offer or of a merger or business
combination consummated in compliance with the requirements of a Qualifying
Offer. The Rights Plan defines a "Qualifying Offer" as an all-cash tender
offer for all outstanding Common Shares which meets the following
requirements: (i) the person or group making the tender offer must, prior
to or upon commencing such offer, have provided to the Company firm written
commitments from responsible financial institutions, which have been
accepted by such person or group, to provide, subject only to customary
terms and conditions, funds for such offer which, when added to the amount
of cash and cash equivalents which such person or group then has available
and has irrevocably committed in writing to the Company to utilize for
purposes of the offer, will be sufficient to pay for all Common Shares
outstanding on a fully diluted basis pursuant to the offer and the
second-step
<PAGE>
transaction required by clause (v) below and all related expenses, together
with copies of all written materials prepared by such person or group for
such financial institutions in connection with obtaining such financing
commitments; (ii) such person or group must own, after consummating such
offer, Common Shares representing at least 90% of the then outstanding
Common Shares; (iii) such offer must in all events remain open for at least
60 days and must be extended for at least 20 business days after the last
increase or permitted decrease in the price offered and after any bona fide
higher alternative offer is made (except in certain limited circumstances
set forth in the Rights Agreement); (iv) such offer must be accompanied by
a written opinion, in customary form, of a nationally recognized investment
banking firm which is addressed to the holders of Common Shares other than
such person or group and states that the price to be paid to such holders
pursuant to the offer is fair from a financial point of view to such
holders and which includes any written presentation of such firm showing
the analysis and range of values underlying such conclusion; and (v) prior
to or upon commencing such offer, such person or group must irrevocably
commit in writing to the Company, such commitment to be enforceable by any
holder of Common Shares, (x) to consummate promptly upon completion of the
offer (but in no event later than five business days thereafter) a
transaction or transactions whereby all remaining Common Shares will be
acquired at the same price per share paid pursuant to the offer, subject
only to the condition that the Board has granted any approvals required to
enable such person or group to consummate such transaction or transactions
without obtaining the vote of any other stockholder, (y) that such person
or group will not amend such offer to reduce the per share price offered
(except in certain limited circumstances set forth in the Rights
Agreement), change the form of consideration offered, or reduce the number
of shares being sought or in any other respect which is materially adverse
to the Company's stockholders, and (z) that such person or group will not
make any offer for any equity securities of the Company for one year after
commencement of the original offer if the original offer does not result in
the tender of the number of shares required to be purchased pursuant to
clause (ii) above, unless another tender offer by another party for all
outstanding Common Shares is commenced that (a) constitutes a Qualifying
Offer or (b) is approved by the Company's Board of Directors (in which
event any new offer by such person or group must be at a price no less than
that provided for in such approved offer).
At any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date, the Board
of Directors of the Company may redeem the Rights in whole, but not in
part, at a price (in cash or Common Shares or other securities of the
Company deemed by the Board of Directors to be at least equivalent in
value) of $.01 per Right, subject to adjustment as provided in the Rights
Agreement (the "Redemption Price"); provided, however, that the Rights will
become non-redeemable for a period of one year from and including any such
date as there shall have occurred a Board Event with respect to the
Company. A "Board Event" is defined in the Rights Plan as an event or
series of events as a result of which at any time a majority of the Board
is not compromised of "Continuing Directors", which at any date shall mean
a member of the Board of Directors of the Company (i) who was a member of
such Board on the date of adoption of the Rights Plan, (ii) who was
nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board of Directors was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of
such nomination or election or (iii) who was elected to the Board to fill a
vacancy created by the expiration of the term, death, resignation or
retirement of any Continuing Director.
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 the
only right of the holders of Rights will be to receive the Redemption
Price.
<PAGE>
After there is an Acquiring Person, the Board of Directors
may elect to exchange each Right (other than Rights that shall have become
null and void and nontransferable as described above) for consideration per
Right consisting of one-half of the securities that would be issuable at
such time upon the exercise of one Right pursuant to the terms of the
Rights Agreement.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
At any time prior to such time as there shall be an
Acquiring Person, except for a period of one year from and including the
date of an occurrence of a Board Event, the Company may, without the
approval of any holder of the Rights, supplement or amend any provision of
the Rights Agreement (including the date on which the Distribution Date
shall occur, the time during which the Rights may be redeemed or the terms
of the Preferred Shares), except that no supplement or amendment shall be
made which reduces the Redemption Price (other than pursuant to certain
adjustments therein).
The Rights have certain antitakeover effects. The Rights
will cause substantial dilution to a person or group that attempts to
acquire the Company without conditioning the offer on substantially all the
Rights being acquired. The Rights will not interfere with any merger or
other business combination pursuant to a Qualifying Offer or with a third
party approved by the Board of Directors of the Company since the Board of
Directors of the Company may, at its option, at any time prior to any
person becoming an Acquiring Person, redeem all but not less than all of
the then outstanding Rights at the Redemption Price.
The Rights Agreement specifying the terms of the Rights, the
Certificate of Designation of the Preferred Shares specifying the terms of
the Preferred Shares (Exhibit A to the Rights Agreement) and the form of
Right Certificate (Exhibit B to the Rights Agreement) are filed herewith as
exhibits. The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to such exhibits,
which are incorporated herein by reference.
Item 2. Exhibits.
1. Rights Agreement dated as of February 14, 1997, between
Airborne Freight Corporation and The Bank of New York,
as Rights Agent
2. Form of Certificate of the Voting Powers, Preferences
and Relative, Participating, Optional and other Special
Rights, Qualifications, Limitations or Restrictions of
Series A Participating Cumulative Preferred Stock of
Airborne Freight Corporation (which is attached as
Exhibit A to the Rights Agreement filed as Exhibit 1
hereto)
3. Form of Right Certificate (which is attached as Exhibit B
to the Rights Agreement filed as Exhibit 1 hereto)
<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, thereunto duly
authorized.
AIRBORNE FREIGHT CORPORATION,
by
/s/ David C. Anderson
---------------------------------
Date: February 12, 1997 David C. Anderson
Corporate Secretary and Counsel
<PAGE>
INDEX OF EXHIBITS
Page Number
in
Sequentially
Exhibit Numbered
Number Title Statement
- ------- ----- -------------
1. Rights Agreement dated as of February 14,
1997, between Airborne Freight Corporation
and The Bank of New York, as Rights Agent 7
2. Form of Certificate of the Voting Powers,
Preferences and Relative, Participating,
Optional and other Special Rights,
Qualifications, Limitations or Restrictions
of Series A Participating Cumulative Preferred
Stock of Airborne Freight Corporation
(which is attached as Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto) 53
3. Form of Right Certificate (which is attached as
Exhibit B to the Rights Agreement filed as
Exhibit 1 hereto) 63
<PAGE>
RIGHTS AGREEMENT dated as of February 14,
1997, between AIRBORNE FREIGHT CORPORATION, a
Delaware corporation (the "Company"), and THE BANK
OF NEW YORK, a New York banking corporation, as
Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one Right (as hereinafter defined) for each
share of Common Stock, par value One Dollar ($1.00) per share, of the
Company (the "Common Stock") outstanding at the Close of Business (as
hereinafter defined) on the date hereof (the "Record Date"), and has
authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date or the Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with respect to
shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date or
the Expiration Date in accordance with the provisions of Section 23.
Each Right shall initially represent the right to purchase one one-
hundredth (1/100) of a share of Series A Participating Cumulative
Preferred Stock, without par value, of the Company (the "Preferred
Shares"), having the powers, rights and preferences set forth in the
Certificate of Designation attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of more than 20% of the Common Shares then
outstanding, but (a) shall not include the Company, any Subsidiary of
the Company, any employee benefit or compensation plan of the Company
or of any of its Subsidiaries, or any Person holding Common Shares
<PAGE>
for or pursuant to the terms of any such employee benefit or
compensation plan and (b) any such Person who or which, alone or
together with one or more of its Affiliates or Associates, becomes the
Beneficial Owner of more than 90% of the Common Shares then
outstanding pursuant to a Qualifying Offer shall not become an
"Acquiring Person" until the Close of Business on the fifth complete
Business Day following the day on which such Person, alone or together
with one or more of its Affiliates or Associates, becomes the
Beneficial Owner of more than 90% of the Common Shares then
outstanding. Notwithstanding the foregoing, the term "Acquiring
Person" shall not include any Person who or which as of any time
becomes the Beneficial Owner of more than 20% of the Common Shares
then outstanding solely as the result of (i) a change in the aggregate
number of Common Shares outstanding since the last date on which such
Person acquired Beneficial Ownership of any Common Shares or (ii) the
acquisition by such person or one or more of its Affiliates or
Associates of Beneficial Ownership of additional Common Shares if such
acquisition was made in the good faith belief that such acquisition
would not (A) cause the Beneficial Ownership by such Person, together
with its Affiliates and Associates, to exceed 20% of the Common Shares
outstanding at the time of such acquisition and such good faith belief
was based on the good faith reliance on information contained in
publicly filed reports or documents of the Company that are inaccurate
or out-of-date or (B) otherwise cause a Distribution Date or the
adjustment provided for in Section 11(a) to occur. Notwithstanding
clause (ii) of the prior sentence, if any Person that is not an
Acquiring Person due to such clause (ii) does not reduce its
percentage of Beneficial Ownership of Common Shares to 20% or less by
the Close of Business on the fifth Business Day after notice from the
Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares so exceeds 20%, such Person
shall, at the end of such five Business Day period, become an
Acquiring Person (and such clause (ii) shall no longer apply to such
Person). For purposes of this definition, the determination whether
any Person acted in "good faith" shall be conclusively determined by
the Board of Directors of the Company.
"Affiliate" and "Associate", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the date of this Rights Agreement.
<PAGE>
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to have
"Beneficial Ownership" of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Rights Agreement;
(b) which such Person or any of such Person's Affiliates or
Associates has: (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written
or oral), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
under clause (i) to be the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange thereunder or cease to be subject to
withdrawal by the tendering security holder; or (ii) the right to
vote pursuant to any agreement, arrangement or understanding
(written or oral); provided, however, that a Person shall not be
deemed under this clause (ii) to be the Beneficial Owner of, or
to beneficially own, any security if (A) the agreement,
arrangement or understanding (written or oral) to vote such
security arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation
made generally to all holders of common stock pursuant to, and in
accordance with, the applicable rules and regulations under the
Exchange Act and (B) the beneficial ownership of such security is
not also then reportable 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 with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in
<PAGE>
the proviso to clause (b)(ii) of this definition) or disposing of
any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition
shall cause a Person ordinarily engaged in business as an underwriter
of securities to be deemed the "Beneficial Owner" of, or to
"beneficially own", or to have "Beneficial Ownership" of, any
securities acquired in a bona fide firm commitment underwriting
pursuant to an underwriting agreement with the Company.
"Board Event" shall mean an event or series of events as a
result of which at any time Continuing Directors do not constitute a
majority of the Board of Directors of the Company.
"Board Event Date" shall mean such date as a Board Event
shall have occurred.
"Book Value", when used with reference to Common Shares
issued by any Person, shall mean the amount of equity of such Person
applicable to each Common Share, determined (a) in accordance with
generally accepted accounting principles in effect on the date as of
which such Book Value is to be determined, (b) using all the
consolidated assets and all the consolidated liabilities of such
Person on the date as of which such Book Value is to be determined,
except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (c) after
giving effect to (i) the exercise of all rights, options and warrants
to purchase such Common Shares (other than the Rights), and the
conversion of all securities convertible into such Common Shares, at
an exercise or conversion price, per Common Share, which is less than
such Book Value before giving effect to such exercise or conversion
(whether or not exercisability or convertibility is conditioned upon
occurrence of a future event), (ii) all dividends and other
distributions on the capital stock of such Person declared prior to
the date as of which such Book Value is to be determined and to be
paid or made after such date, and (iii) any other agreement,
arrangement or understanding (written or oral), or transaction or
other action contemplated prior to the date as of which such Book
Value is to be determined that would have the effect of thereafter
reducing such Book Value.
"Business Combination" shall have the meaning set forth in
Section 11(c)(i).
<PAGE>
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in the Borough of Manhattan, The City of New York, are authorized or
obligated by law or executive order to close.
"Certificate of Designation" shall mean the Certificate of
Designation of Series A Participating Cumulative Preferred Stock
setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of Preferred Stock of the
Company, a copy of which is attached as Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m.,
Pacific time, on such date; provided, however, that, if such date is
not a Business Day, "Close of Business" shall mean 5:00 p.m., Pacific
time, on the next succeeding Business Day.
"Common Shares", when used with reference to the Company
prior to a Business Combination, shall mean the shares of Common Stock
of the Company or any other shares of capital stock of the Company
into which the Common Stock shall be reclassified or changed. "Common
Shares", when used with reference to any Person (other than the
Company prior to a Business Combination), shall mean shares of capital
stock of such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not
limit (as a maximum amount and not merely in proportional terms) the
amount of dividends or income payable or distributable on such class
or series or the amount of assets distributable on such class or
series upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person and do not provide that such class or series
is subject to redemption at the option of such Person, or any shares
of capital stock or units of equity interests into which the foregoing
shall be reclassified or changed; provided, however, that, if at any
time there shall be more than one such class or series of capital
stock or equity interests of such Person, "Common Shares" of such
Person shall include all such classes and series substantially in the
proportion of the total number of shares or other units of each such
class or series outstanding at such time.
<PAGE>
"Common Stock" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of
this Rights Agreement; provided, however, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section
11(c)(iii).
"Continuing Director" at any date shall mean a member of the
Board of Directors of the Company (i) who was a member of such Board
on the date of this Rights Agreement, (ii) who was nominated or
elected by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election
to the Board of Directors of the Company was recommended or endorsed
by at least a majority of the directors who were Continuing Directors
at the time of such nomination or election or (iii) who was elected to
the Board of Directors to fill a vacancy created by the expiration of
the term, death, resignation or retirement of any Continuing Director.
The term "control" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly
or indirectly, by or through stock ownership, agency or otherwise, or
pursuant to or in connection with an agreement, arrangement or
understanding (written or oral) with one or more other Persons by or
through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Distribution Date" shall have the meaning set forth in
Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise
specifically provided.
"Exchange Consideration" shall have the meaning set forth in
Section 11(b)(i).
"Expiration Date" shall have the meaning set forth in
Section 7(a).
"Major Part", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (a)
having a fair market value aggregating 50% or more of the total fair
market value of all the assets
<PAGE>
of the Company and its Subsidiaries (taken as a whole) as of the date
in question, (b) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and
its Subsidiaries (taken as a whole) as would be shown on a
consolidated or combined balance sheet of the Company and its
Subsidiaries as of the date in question, prepared in accordance with
generally accepted accounting principles then in effect, or (c)
accounting for 50% or more of the total amount of earnings before
interest, taxes, depreciation and amortization or of the revenues of
the Company and its Subsidiaries (taken as a whole) as would be shown
on, or derived from, a consolidated or combined statement of income or
net earnings of the Company and its Subsidiaries for the period of 12
months ending on the last day of the Company's monthly accounting
period next preceding the date in question, prepared in accordance
with generally accepted accounting principles then in effect.
"Market Value", when used with reference to Common Shares on
any date, shall mean the average of the daily closing prices, per
share, of such Common Shares for the period which is the shorter of
(a) 30 consecutive Trading Days ending on the Trading Day immediately
prior to the date in question or (b) the number of consecutive Trading
Days beginning on the Trading Day immediately after the date of the
first public announcement of the event requiring a determination of
the Market Value and ending on the Trading Day immediately prior to
the record date of such event; provided, however, that, in the event
that the Market Value of such Common Shares is to be determined in
whole or in part during a period following the announcement by the
issuer of such Common Shares of any action of the type described in
Section 12(a) that would require an adjustment thereunder, then, and
in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the
market price of such Common Shares. The closing price for each Trading
Day shall be the closing price quoted on the composite tape for
securities listed on the New York Stock Exchange, or, if such
securities are not quoted on such composite tape or if such securities
are not listed on such exchange, on the principal United States
securities exchange registered under the Exchange Act (or any
recognized foreign stock exchange) on which such securities are
listed, or, if such securities are not listed on any such exchange,
the closing price quoted on The Nasdaq Stock Market or, if such
securities are not so quoted, the average of the closing bid and asked
<PAGE>
quotations with respect to a share of such securities on any National
Association of Securities Dealers, Inc. quotations system or such
other system then in use, or if no such quotations are available, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such securities selected
by the Board of Directors of the Company, or if on any such Trading
Day no market maker is making a market in such securities, the closing
price of such securities on such Trading Day shall be deemed to be the
fair value of such securities 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 binding on the
Rights Agent, the holders of Rights and all other Persons); provided,
however, that for the purpose of determining the closing price of the
Preferred Shares for any Trading Day on which there is no such market
maker for the Preferred Shares the closing price on such Trading Day
shall be deemed to be the Formula Number (as defined in the
Certificate of Designation) multiplied by the closing price of the
Common Shares of the Company on such Trading Day.
"Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this
Rights Agreement to Preferred Shares shall be deemed to include any
authorized fraction of a Preferred Share, unless the context otherwise
requires.
"Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that, if such Surviving
Person is a direct or indirect Subsidiary of any other Person,
"Principal Party" shall mean the Person which is the ultimate parent
of such Surviving Person and which is not itself a Subsidiary of
another Person. In the event ultimate control of such Surviving Person
is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $110,
as such amount may from time to time be adjusted as provided herein,
and shall be payable in lawful money of the United States of America.
All references herein to the
<PAGE>
Purchase Price shall mean the Purchase Price as in effect at the time
in question.
"Qualifying Offer" shall mean an all-cash tender offer for
all outstanding Common Shares which meets all of the following
requirements:
(1) on or prior to the date such offer is commenced within
the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, the Person making such offer has, and has
provided to the Company, firm written commitments from
responsible financial institutions, which have been accepted by
such Person (or one of its Affiliates), to provide, subject only
to customary terms and conditions, funds for such offer which,
when added to the amount of cash and cash equivalents which such
Person then has available and has irrevocably committed in
writing to the Company to utilize for purposes of such offer,
will be sufficient to pay for all Common Shares outstanding on a
fully diluted basis pursuant to such offer and the second-step
transaction required by clause (5) below and all related
expenses, together with copies of all written materials prepared
by such Person for such financial institutions in connection with
obtaining such financing commitments;
(2) after the consummation of such offer, such Person, alone
or together with any of its Affiliates and Associates, owns
Common Shares representing 90% or more of the then outstanding
Common Shares;
(3) such offer remains open for at least 60 days; provided,
however, that (x) if there is any increase in the price of such
offer, such offer must remain open for at least an additional 20
Business Days after the last such increase, (y) such offer must
remain open for at least 20 Business Days after the date that any
bona fide alternative offer is made which, in the opinion of one
or more investment banking firms designated by the Company,
provides for consideration per share in excess of that provided
for in such offer, and (z) such offer must remain open for at
least 20 Business Days after the date, if any, on which such
Person reduces the per share price offered in accordance with
clause (5)(y) below; provided further, however, that such offer
need not remain open, as a result of this clause (3), beyond (i)
the time which any other offer satisfying the
<PAGE>
criteria for a Qualifying Offer is then required to be kept open
under this clause (3), or (ii) the scheduled expiration date, as
such date may be extended by public announcement on or prior to
the then scheduled expiration date, of any other tender or
exchange offer for Common Shares with respect to which the Board
of Directors has agreed to redeem the Rights immediately prior to
acceptance for payment of Common Shares thereunder (unless such
other offer is terminated prior to its expiration without any
Common Shares having been purchased thereunder);
(4) such offer is accompanied by a written opinion, in
customary form, of a nationally recognized investment banking
firm which is addressed to the holders of Common Shares other
than such Person and states that the price to be paid to such
holders pursuant to the offer is fair from a financial point of
view to such holders and includes any written presentation of
such firm showing the analysis and range of values underlying
such conclusions; and
(5) prior to or on the date that such offer is commenced
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, such Person makes an
irrevocable written commitment to the Company, enforceable by any
holder of Common Shares, (x) to consummate a transaction or
transactions promptly upon the completion of such offer (and in
no event later than five Business Days thereafter), whereby all
Common Shares not purchased in such offer will be acquired at the
same price per share paid in such offer, subject only to the
condition that the Board of Directors shall have granted any
approvals required to enable such Person to consummate such
transaction or transactions following consummation of such offer
without obtaining the vote of any other stockholder (such
transaction, a "Second Step Transaction"), (y) that such Person
will not make any amendment to the original offer which reduces
the per share price offered (other than a reduction to reflect
any extraordinary dividend declared by the Company after the
commencement of such offer or any material change in the capital
structure of the Company initiated by the Company after the
commencement of such offer, whether by way of recapitalization,
reorganization, repurchase or otherwise), changes the form of
consideration offered, or reduces the number of
<PAGE>
shares being sought or which is in any other respect materially
adverse to the Company's stockholders, and (z) that neither such
Person nor of any its Affiliates or Associates will make any
offer for any equity securities of the Company for a period of
one year after the commencement of the original offer if such
original offer does not result in the tender of the number of
Common Shares required to be purchased pursuant to clause (2)
above, unless another tender offer by another party for all
outstanding Common Shares is commenced that (A) constitutes a
Qualifying Offer or (B) is approved by the Board of Directors of
the Company (in which event, any new offer by such Person or of
any of its Affiliates or Associates must be at a price no less
than that provided for in such approved offer).
"Record Date" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in
Section 24(a).
"Redemption Price" with respect to each Right shall mean
$.01, as such amount may from time to time be adjusted in accordance
with Section 12. All references herein to the Redemption Price shall
mean the Redemption Price as in effect at the time in question.
"Registered Common Shares" shall mean Common Shares that
are, as of the date of consummation of a Business Combination, and
have continuously been for the 12 months immediately preceding such
date, registered under Section 12 of the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.
"Second Step Transaction" shall have the meaning assigned to
such term in clause 5(x) of the definition of Qualifying Offer.
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as
in effect on the date in question, unless otherwise specifically
provided.
"Subsidiary" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary
circumstances (and not merely upon the happening of a contingency) to
vote in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such
Person (if such Person is not a corporation)) of which is owned,
directly or indirectly, by another Person or by one or more other
Subsidiaries of such other Person or by such other Person and one or
more other Subsidiaries of such other Person.
"Surviving Person" shall mean (a) the Person which is the
continuing or surviving Person in a consolidation or merger specified
in Section 11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the
Major Part of the assets of the Company and its Subsidiaries is sold,
leased, exchanged or otherwise transferred or disposed of in a
transaction specified in Section 11(c)(i)(C); provided, however, that,
if the Major Part of the assets of the Company and its Subsidiaries is
sold, leased, exchanged or otherwise transferred or disposed of in one
or more related transactions specified in Section 11(c)(i)(C) to more
than one Person, the "Surviving Person" in such case shall mean the
Person that acquired assets of the Company and/or its Subsidiaries
with the greatest fair market value in such transaction or
transactions.
"Trading Day" shall mean a day on which the principal
national securities exchange (or principal recognized foreign stock
exchange, as the case may be) on which any securities or Rights, as
the case may be, are listed or admitted to trading is open for the
transaction of business or, if the securities or Rights in question
are not listed or admitted to trading on any national securities
exchange (or recognized foreign stock exchange, as the case may be), a
Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint one or more co-Rights Agents as it may deem necessary or
<PAGE>
desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights
Agents). In the event 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 Rights and Right Certificates. (a) One
Right shall be associated with each Common Share outstanding on the
Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date and each
additional Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or
the Expiration Date as provided in Section 23; provided, however,
that, if the number of outstanding Rights are combined into a smaller
number of outstanding Rights pursuant to Section 12(a), the
appropriate fractional Right determined pursuant to such Section shall
thereafter be associated with each such Common Share.
(b) Until the earlier of (i) such time as the Company learns
that a Person has become an Acquiring Person or (ii) the Close of
Business on such date, if any, as may be designated by the Board of
Directors of the Company following the commencement of, or first
public disclosure of an intent to commence, a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit or compensation plan of the Company or of any of
its Subsidiaries, or any Person holding Common Shares for or pursuant
to the terms of any such employee benefit or compensation plan and
other than a Qualifying Offer) for outstanding Common Shares, if upon
consummation of such tender or exchange offer such Person could be the
Beneficial Owner of more than 20% of the outstanding Common Shares
(the Close of Business on the earlier of such dates being the
"Distribution Date"), (x) the Rights shall be evidenced by the
certificates for Common Shares registered in the names of the holders
thereof and not by separate Right Certificates, (y) the Rights,
including the right to receive Right Certificates, shall be
transferable only in connection with the transfer of Common Shares and
(z) the Company shall notify the Rights Agent as promptly as
practicable that the Distribution Date has occurred. As soon as
practicable after the Distribution Date, the Rights Agent shall send,
by first-class, postage-prepaid mail, to each record holder of Common
Shares as of
<PAGE>
the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one whole Right
for each Common Share (or for the number of Common Shares with which
one whole Right is then associated if the number of Rights per Common
Share held by such record holder has been adjusted in accordance with
the proviso in Section 3(a)). If the number of Rights associated with
each Common Share has been adjusted in accordance with the proviso in
Section 3(a), at the time of distribution of the Right Certificates
the Company may make any necessary and appropriate rounding
adjustments so that Right Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional
Right in accordance with Section 15(a). The Company shall notify the
Rights Agent as promptly as practicable of any such adjustments. As of
and after the Distribution Date, the Rights shall be evidenced solely
by such Right Certificates.
(c) No later than 30 days after the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date
at the address of such holder shown on the records of the Company.
With respect to any certificate for Common Shares outstanding as of
the Record Date, until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, (i) the Rights associated with
the Common Shares represented by any such certificate shall be
evidenced by such certificates for the Common Shares with a copy of
the Summary of Rights attached thereto and the registered holders of
the Common Shares shall also be the registered holders of the
associated Rights and (ii) the surrender for transfer of any such
certificate, even without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record
Date (including upon transfer or exchange of outstanding Common
Shares), but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration
<PAGE>
Date, shall have printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement dated
as of February 14, as it may be amended from time to time (the
"Rights Agreement"), between Airborne Freight Corporation (the
"Company") and The Bank of New York, as Rights Agent (the "Rights
Agent"), 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. Under certain circumstances, as
set forth in the Rights Agreement, such Rights shall be evidenced
by separate certificates and shall no longer be evidenced by this
certificate. The Rights Agent shall mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Rights beneficially owned
by Acquiring Persons or their Affiliates or Associates (as such
terms are defined in the Rights Agreement) and by any subsequent
holder of such Rights are null and void and nontransferable.
Notwithstanding this Section 3(d), neither the omission of a legend
nor the inclusion of a legend that makes reference to a Rights
Agreement dated as of November 20, 1986, entered into between the
Company and The First Jersey National Bank (or any successor thereto)
(in which case such reference shall be deemed to refer to this Rights
Agreement) shall affect the enforceability of any part of this Rights
Agreement or the rights of any holder of Rights.
SECTION 4. Form of Right Certificates. The Right
Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in
substantially the form set forth as Exhibit B 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 Rights Agreement,
or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto 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. Subject to the provisions of
Sections 7, 11 and 23, the Right Certificates, whenever issued, shall
be dated as of the Distribution Date, and on their face shall entitle
the
<PAGE>
holders thereof to purchase such number of Preferred Shares as shall
be set forth therein for the Purchase Price set forth therein, subject
to adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration. (a)
The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Treasurer or any Vice President
(whether preceded by any additional title) of the Company, either
manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof, which shall be attested by the
Secretary, an Assistant Secretary or a Vice President (whether
preceded by any additional title, provided that such Vice President
shall not have also executed the Right Certificates) 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 or obligatory for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such an 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 by the Company with the same
force and effect as though the person who signed such Right
Certificates had not ceased to be such an officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this Rights
Agreement any such person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its principal office in New York, New
York, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced by each of the Right Certificates, the certificate number of
each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
<PAGE>
or Stolen Right Certificates; Uncertificated Rights. (a) Subject to
the provisions of Sections 7(e) and 15, at any time after the
Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split-up,
combined or exchanged for another Right Certificate or Right
Certificates representing, in the aggregate, the same number of Rights
as the Right Certificate or Right Certificates surrendered then
represented. Any registered holder desiring to transfer, split-up,
combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent and shall surrender the Right
Certificate or Right Certificates to be transferred, split-up,
combined or exchanged at the principal office of the Rights Agent;
provided, however, that neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the
registered holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of such Right
Certificate and 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 or the Rights Agent
shall reasonably request. Thereupon the Rights Agent shall, subject to
Sections 7(e) and 15, countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of
Right 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 valid 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 cancelation of the
Right Certificate if mutilated, the Company shall make a new Right
Certificate of like tenor and deliver such new Right Certificate to
the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
<PAGE>
(c) Notwithstanding any other provision hereof, the Company
and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced
by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or
prior to the earliest of (i) the Close of Business on the 10th
anniversary of the date of this Rights Agreement (the Close of
Business on such date being the "Expiration Date"), (ii) the
consummation of any transaction or transactions effected in accordance
with clause (5)(x) of the definition of "Qualifying Offer" and (iii)
the Redemption Date, one one-hundredth (1/100) of a Preferred Share,
subject to adjustment from time to time as provided in Sections 11 and
12.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date,
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent in New York, New
York, together with payment of the Purchase Price for each one
one-hundredth (1/100) of a Preferred Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Expiration Date or
(ii) the Redemption Date.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased together with an amount equal to any
applicable transfer tax, in lawful money of the United States of
America, in cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon (i) either (A)
promptly requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares 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 Preferred Shares with a depositary agent under a
<PAGE>
depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one one-hundredths
(1/100s) of a Preferred Share to be purchased (in which case
certificates for the Preferred Shares to be represented by such
receipts shall be deposited by the transfer agent with the depositary
agent) and the Company shall direct the depositary agent to comply
with all such requests, (ii) when appropriate, promptly requisition
from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 15, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to
be 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 and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise fewer than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate 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 (other than pursuant to the penultimate sentence of the
definition of "Acquiring Person"), 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 to
holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to
<PAGE>
such Rights, whether under any provision of this Rights Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that
the provisions of this Section 7(e) are complied with, but shall have
no liability to any holder of any Right Certificate or any other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliate or Associate, or any
transferee thereof, hereunder.
(f) Notwithstanding anything in this Rights 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 any
Right Certificates upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) 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.
(g) The Company may temporarily suspend, for a period of
time not to exceed 90 calendar days after the Distribution Date, the
exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act, on an appropriate
form, with respect to the Preferred Shares purchasable upon exercise
of the Rights and permit such registration statement to become
effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by
the Company or any other Person become exercisable immediately upon,
the effectiveness of such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended and
shall issue a further public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
herein to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification under the blue sky or
securities laws of such jurisdiction shall not have been obtained or
the exercise of the Rights shall not be permitted under applicable
law.
SECTION 8. Cancelation and Destruction of Right
Certificates. All Right Certificates surrendered or presented for the
purpose of exercise, transfer, split-up,
<PAGE>
combination or exchange shall, and any Right Certificate representing
Rights that have become null and void and nontransferable pursuant to
Section 7(e) surrendered or presented for any purpose shall, if
surrendered or presented to the Company or to any of its agents, be
delivered to the Rights Agent for cancelation or in canceled form, or,
if surrendered or presented to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by this Rights Agreement. The Company shall
deliver to the Rights Agent for cancelation and retirement, and the
Rights Agent shall so cancel and retire, any Right Certificate
purchased or acquired by the Company. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it shall cause to be
reserved and kept available out of its authorized and unissued
Preferred Shares or any authorized and issued Preferred Shares held in
its treasury, free from preemptive rights or any right of first
refusal, a number of Preferred Shares sufficient to permit the
exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient
Preferred Shares issued but not outstanding or authorized but unissued
to permit the exercise or exchange of Rights in accordance with
Section 11, the Company covenants and agrees that it shall take all
such action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise or exchange of Rights pursuant
to Section 11; provided, however, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the
Company shall, or in lieu of seeking any such authorization, the
Company may, to the extent necessary and permitted by applicable law
and any agreements or instruments in effect prior to the Distribution
Date to which it is a party, (i) upon surrender of a Right, pay cash
equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor, (ii) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which
such Right is exercised, issue equity securities having a value equal
to the value of the Preferred Shares that otherwise would have been
issuable pursuant to Section 11, which value
<PAGE>
shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, or (iii) upon due
exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, distribute a
combination of Preferred Shares, cash and/or other equity and/or debt
securities having an aggregate value equal to the value of the
Preferred Shares that otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company. To the extent that any legal or contractual restrictions
(pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is party) prevent the Company from
paying the full amount payable in accordance with the foregoing
sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts that are not then restricted
on a pro rata basis as such payments become permissible under such
legal or contractual restrictions until such payments have been paid
in full.
(c) The Company covenants and agrees that it shall take all
such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise or exchange of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to
payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the
exercise or exchange of Rights are to be listed on any national
securities exchange, the Company covenants and agrees to use its best
efforts to cause, from and after such time as the Rights become
exercisable or exchangeable, all Preferred Shares reserved for such
issuance to be listed on such securities exchange upon official notice
of issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it shall
pay when due and payable any and all Federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of Right Certificates or of any Preferred Shares or Common
Shares or other securities upon the exercise or exchange of the
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or in respect
of the issuance or delivery of certificates for the
<PAGE>
Preferred Shares or Common Shares or other securities, as the case may
be, in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or exchange or
to issue or deliver any certificates for Preferred Shares or Common
Shares or other securities, as the case may be, upon the exercise or
exchange of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in
whose name any certificate for Preferred Shares or Common Shares or
other securities is issued upon the exercise or exchange of Rights
shall for all purposes be deemed to have become the holder of record
of the Preferred Shares or Common Shares or other securities, as the
case may be, 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 any Purchase Price (and any
applicable transfer taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are closed, such Person shall be
deemed to have become the record holder of such Preferred Shares or
Common Shares or other securities, as the case may be, on, and such
certificate shall be dated, the next succeeding Business Day on which
the transfer books of the Company for the Preferred Shares or Common
Shares or other securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for Shares; Business
Combinations. (a) Upon a Person becoming an Acquiring Person, proper
provision shall be made so that each holder of a Right, except as
provided in Section 7(e), shall thereafter have a right to receive,
upon exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, such number of one one-hundredths
(1/100s) of a Preferred Share as shall equal the result obtained by
multiplying the Purchase Price by a fraction, the numerator of which
is the number of one one-hundredths (1/100s) of a Preferred Share for
which a Right is then exercisable and the denominator of which is 50%
of the Market Value of the Common Shares on the date on which such
Person became an Acquiring Person. As soon as practicable after a
Person
<PAGE>
becomes an Acquiring Person (provided the Company shall not have
elected to make the exchange permitted by Section 11(b)(i) for all
outstanding Rights), the Company covenants and agrees to use its best
efforts to:
(i) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the
Preferred Shares purchasable upon exercise of the Rights;
(ii) cause such registration statement to become effective
as soon as practicable after such filing;
(iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
(iv) qualify or register the Preferred Shares purchasable
upon exercise of the Rights under the blue sky or securities laws
of such jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person,
mandatorily exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that shall have
become null and void and nontransferable pursuant to the provisions of
Section 7(e)) for consideration per Right consisting of either (A)
one-half of the securities that would be issuable at such time upon
the exercise of one Right in accordance with Section 11(a) or, if
applicable, Section 9(b)(ii) or 9(b)(iii) or (B) if applicable, the
cash consideration specified in Section 9(b)(i) (the consideration
issuable per Right pursuant to this Section 11(b)(i) being the
"Exchange Consideration"). The Board of Directors of the Company may,
at its option, issue, in substitution for Preferred Shares, Common
Shares in an amount per Preferred Share equal to the Formula Number
(as defined in the Certificate of Designation) if there are sufficient
Common Shares issued but not outstanding or authorized but unissued.
If the Board of Directors of the Company elects to exchange all the
Rights for Exchange Consideration pursuant to this Section 11(b)(i)
prior to the physical distribution of the Rights Certificates, the
Corporation may distribute the Exchange Consideration in lieu of
distributing Right Certificates, in which case for purposes of this
Rights
<PAGE>
Agreement holders of Rights shall be deemed to have simultaneously
received and surrendered for exchange Right Certificates on the date
of such distribution.
(ii) Any action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 11(b)(i) shall
be irrevocable and, immediately upon the taking of such action and
without any further action and without any notice, the right to
exercise any such Right pursuant to Section 11(a) shall terminate and
the only right thereafter of a holder of such Right shall be to
receive the Exchange Consideration in exchange for each such Right
held by such holder or, if the Exchange Consideration shall not have
been paid or issued, to exercise any such Right pursuant to Section
11(c)(i). The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. 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 shall state
the method by which the exchange of the Rights for the Exchange
Consideration 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 shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) held by
each holder of Rights.
(c)(i) In the event that, following a Distribution Date,
directly or indirectly, any transactions specified in the following
clause (A), (B) or (C) of this Section 11(c)(i) (each such transaction
being a "Business Combination") shall be consummated:
(A) the Company shall consolidate with, or merge with and
into, any Acquiring Person or any Affiliate or Associate of an
Acquiring Person;
(B) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for capital stock or other
securities of
<PAGE>
the Company or of any Acquiring Person or Affiliate or Associate
of an Acquiring Person or cash or any other property; or
(C) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or dispose of), in
one or more transactions, the Major Part of the assets of the
Company and its Subsidiaries (taken as a whole) to any Acquiring
Person or any Affiliate or Associate of an Acquiring Person,
then, in each such case, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights
Agreement, the securities specified below (or, at such holder's
option, the securities specified in Section 11(a)):
(1) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of all liens, encumbrances or
other adverse claims, as shall have an aggregate Market Value as
of the time of exercise thereof equal to the result obtained by
multiplying the Purchase Price by two;
(2) if the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding,
each Right shall thereafter represent the right to receive, upon
the exercise thereof for the Purchase Price in accordance with
the terms of this Rights Agreement, at the election of the holder
of such Right at the time of the exercise thereof, any of:
(x) such number of Common Shares of the Surviving
Person in such Business Combination as shall have an
aggregate Book Value immediately after giving effect to such
Business Combination equal to the result obtained by
multiplying the Purchase Price by two;
<PAGE>
(y) such number of Common Shares of the Principal Party
in such Business Combination (if the Principal Party is not
also the Surviving Person in such Business Combination) as
shall have an aggregate Book Value immediately after giving
effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two; or
(z) if the Principal Party in such Business Combination
is an Affiliate of one or more Persons that has Registered
Common Shares outstanding, such number of Registered Common
Shares of whichever of such Affiliates of the Principal
Party has Registered Common Shares with the greatest
aggregate Market Value on the date of consummation of such
Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result
obtained by multiplying the Purchase Price by two.
(ii) The Company shall not consummate any Business
Combination unless each issuer of Common Shares for which Rights may
be exercised, as set forth in this Section 11(c), shall have
sufficient authorized Common Shares that have not been issued or
reserved for issuance (and which shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of
first refusal or any other restrictions or limitations on the transfer
or ownership thereof) to permit the exercise in full of the Rights in
accordance with this Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights,
shall be effective under the Securities Act; and
(B) the Company and each such issuer shall have:
(i) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by such
issuer of the obligations set forth in this Section 11(c)
(including the obligation of such issuer to issue Common
Shares upon the exercise of Rights in accordance with the
<PAGE>
terms set forth in Sections 11(c)(i) and 11(c)(iii)) and
further providing that such issuer, at its own expense,
shall use its best efforts to:
(x) cause a registration statement under the Securities
Act on an appropriate form, with respect to the Rights and
the Common Shares of such issuer purchasable upon exercise
of the Rights, to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until
the Expiration Date;
(y) qualify or register the Rights and the Common
Shares of such issuer purchasable upon exercise of the
Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate; and
(z) list the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights on each
national securities exchange on which the Common Shares were
listed prior to the consummation of the Business Combination
or, if the Common Shares were not listed on a national
securities exchange prior to the consummation of the
Business Combination, on a national securities exchange;
(2) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a
valid, binding and enforceable agreement of such issuer; and
(3) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer that may be
purchased upon the exercise of each Right after the consummation
of such Business Combination.
(iii) After consummation of any Business Combination and
subject to the provisions of Section 11(c)(ii), (A) each issuer of
Common Shares for which Rights may be exercised as set forth in this
Section 11(c) shall be liable for, and shall assume, by
<PAGE>
virtue of such Business Combination, all the obligations and duties of
the Company pursuant to this Rights Agreement, (B) the term "Company"
shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps in connection with such consummation as
may be necessary to assure that the provisions hereof (including the
provisions of Sections 11(a) and 11(c)) shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights, and (D)
the number of Common Shares of each such issuer thereafter receivable
upon exercise of any Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions of Sections 11 and 12 and the provisions of Section 7,
9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments. (a) To preserve the actual
or potential economic value of the Rights, if at any time after the
date of this Rights Agreement there shall be any change in the Common
Shares or the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations
or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Shares
or Preferred Shares, as the case may be (other than distribution of
the Rights or regular quarterly cash dividends), or otherwise, then,
in each such event the Board of Directors of the Company shall make
such appropriate adjustments in the number of Preferred Shares (or the
number and kind of other securities) issuable upon exercise of each
Right, the Purchase Price and Redemption Price in effect at such time
and the number of Rights outstanding at such time (including the
number of Rights or fractional Rights associated with each Common
Share) such that following such adjustment such event shall not have
had the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Shares,
thereafter the number of such securities so receivable upon exercise
of any
<PAGE>
Right shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions of
Sections 11 and 12 and the provisions of Sections 7, 9 and 10 with
respect to the Preferred Shares shall apply, as nearly as reasonably
may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent
to any adjustment made to the amount of Preferred Shares or other
securities relating to a Right shall evidence the right to purchase,
for the Purchase Price, the adjusted number and kind of securities
purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other
securities issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express
the terms that were expressed in the initial Right Certificates issued
hereunder.
(e) In any case in which action taken pursuant to Section
12(a) requires that an adjustment 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 issuing to the holder of any Right
exercised after such record date the Preferred Shares and/or other
securities, if any, issuable upon such exercise over and above the
Preferred Shares and/or other securities, if any, issuable before
giving effect to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
securities upon the occurrence of the event requiring such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an
adjustment is made as provided in Section 11 or 12, 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 Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with
Section 25. The Rights Agent shall be fully
<PAGE>
protected in relying on any such certificate and on any adjustment
therein contained.
SECTION 14. Additional Covenants. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number
of Preferred Shares (or fractions of a share) or other securities for
which a Right is exercisable or the number of Rights outstanding or
associated with each Common Share or any similar or other adjustment
shall be made or be effective if such adjustment would have the effect
of reducing or limiting the benefits the holders of the Rights would
have had absent such adjustment, including the benefits under
Sections 11 and 12, unless the terms of this Rights Agreement are
amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it shall not
take (or permit any Subsidiary of the Company to take) any action if
at the time such action is taken it is intended or reasonably
foreseeable that such action will reduce or otherwise limit the
benefits the holders of the Rights would have had absent such action,
including the benefits under Sections 11 and 12. Any action taken by
the Company during any period after any Person becomes an Acquiring
Person but prior to the Distribution Date shall be null and void
unless such action could be taken under this Section 14(b) from and
after the Distribution Date. The Company shall not consummate any
Business Combination if any issuer of Common Shares for which Rights
may be exercised after such Business Combination in accordance with
Section 11(c) shall have taken any action that reduces or otherwise
limits the benefits the holders of the Rights would have had absent
such action, including the benefits under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares. (a) The
Company may, but shall not be required to, issue fractions of Rights
or distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company may 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 value of a whole Right. For purposes of
this Section 15(a), the current market value of a whole Right shall be
the closing price of the Rights (as determined pursuant to the second
and third sentences of the definition of Market Value
<PAGE>
contained in Section 1) for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise
issuable.
(b) The Company may, but shall not be required to, issue
fractions of Preferred Shares upon exercise of the Rights or
distribute certificates that evidence fractional Preferred Shares. In
lieu of fractional Preferred Shares, the Company may elect to (i)
utilize a depository arrangement as provided by the terms of the
Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-hundredths (1/100s) of a Preferred Share or
any integral multiple thereof), 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
value of one Preferred Share, if any are outstanding and publicly
traded (or the Formula Number times the current market value of one
Common Share if the Preferred Shares are not outstanding and publicly
traded). For purposes of this Section 15(b), the current market value
of a Preferred Share (or Common Share) shall be the closing price of a
Preferred Share (or Common Share) (as determined pursuant to the
second and third sentences of the definition of Market Value contained
in Section 1) for the Trading Day immediately prior to the date of
such exercise. If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Shares,
the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exchange of Rights pursuant to Section
11(b), or to distribute certificates that evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company may pay
to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current Market Value
of one Common Share as of the date on which a Person became an
Acquiring Person.
(d) The holder of Rights by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as provided in this
Section 15.
<PAGE>
SECTION 16. Rights of Action. (a) All rights of action in
respect of this Rights Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and
any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Shares) 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 Rights 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 Rights Agreement and
shall be entitled to specific performance of the obligations of any
Person under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Rights
Agreement.
(b) Any holder of Rights who prevails in an action to
enforce the provisions of this Rights Agreement shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right
Certificates. (a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares
and the Right associated with each Common Share shall be automatically
transferred upon the transfer of each Common Share.
(b) After the Distribution Date, the Right Certificates
shall be transferable, subject to Section 7(e), only on the registry
books of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer.
(c) The Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any nota-
<PAGE>
tions of ownership or writing on the Right Certificates or the
associated certificate for Common Shares made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to
the contrary.
SECTION 18. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote or receive dividends or be deemed, for any purpose,
the holder of the Preferred Shares or of any other securities of the
Company 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, including 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, or to
receive dividends or other distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certifi-
cate shall have been exercised in accordance with the provisions
hereof.
SECTION 19. 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 other
disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties
hereunder, including any taxes or governmental charges imposed as a
result of the action taken by it hereunder (other than any taxes on
the fees payable to it).
(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 its administration of this Rights Agreement
in reliance upon any Right Certificate or certificate for the Common
Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, 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.
<PAGE>
SECTION 20. Merger or Consolidation or Change 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 stock transfer
or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Rights 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 22. In case, at the time
such successor Rights Agent shall succeed to the agency created by
this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the 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 Rights 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 Rights
Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement
upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates (or, prior to the Distribution
Date, of the Common Shares), 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
<PAGE>
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken, suffered or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including the identity of any Acquiring
Person) be proved or established by the Company prior to taking,
refraining from taking or suffering 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 any one of the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or the 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
or suffered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or wilful 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 Rights
Agreement or in the Right Certificates (except as to 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.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights 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 Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect
<PAGE>
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 Preferred Shares or Common Shares to be issued
pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it shall 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, a Vice
President (whether preceded by any additional title), the Secretary or
the Treasurer of the Company, in connection with its duties and it
shall not be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such officer.
(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
Rights Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal
entity.
(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 resulting from any such act, default, neglect or
misconduct
<PAGE>
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) The Company agrees to indemnify and to hold the Rights
Agent harmless against any loss, liability, damage or expense
(including reasonable fees and expenses of legal counsel) which the
Rights Agent may incur resulting from its actions as Rights Agent
pursuant to this Rights Agreement; provided, however, that the Rights
Agent shall not be indemnified or held harmless with respect to any
such loss, liability, damage or expense incurred by the Rights Agent
as a result of, or arising out of, its own negligence, bad faith or
wilful misconduct. In no case shall the Company be liable with respect
to any action, proceeding, suit or claim against the Rights Agent
unless the Rights Agent shall have notified the Company, by letter or
by facsimile confirmed by letter, of the assertion of any action,
proceeding, suit or claim against the Rights Agent, promptly after the
Rights Agent shall have notice of any such assertion of an action,
proceeding, suit or claim or have been served with the summons or
other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be
entitled to participate at its own expense in the defense of any such
action, proceeding, suit or claim, and, if the Company so elects, the
Company shall assume the defense of any such action, proceeding, suit
or claim. In the event that the Company assumes such defense, the
Company shall not thereafter be liable for the fees and expenses of
any additional counsel retained by the Rights Agent, so long as the
Company shall retain counsel satisfactory to the Rights Agent, in the
exercise of its reasonable judgment, to defend such action,
proceeding, suit or claim. The Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim
with respect to which it may seek indemnification from the Company
without the prior written consent of the Company.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Shares and the
Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares) 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
<PAGE>
successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates (or,
prior to the Distribution Date, of the Common Shares) 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 (or, prior to the Distribution Date, of
the Common Shares) (who shall, with such notice, submit his Right
Certificate or, prior to the Distribution Date, the certificate
representing his Common Shares, for inspection by the Company), then
the registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares) 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 corporation organized and doing business under the
laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized
to conduct a stock transfer or corporate trust business in the State
of New York), in good standing, having a principal office in the State
of New York, 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; provided that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent.
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 Shares and the Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates (or, prior
to the Distribution Date, of the Common Shares). Failure to
<PAGE>
give any notice provided for in this Section 22, however, 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 23. Issuance of Additional Rights and Right
Certificates. Notwithstanding any of the provisions of this Rights
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 made in accordance with the provisions of this Rights
Agreement. In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the earlier
of the Redemption Date and the Expiration Date, the Company (a) shall,
with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company, and (b) may, in any other case, if
deemed necessary or 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,
however, that (i) no such Right Certificate shall be issued if, and to
the extent that, the Company shall be advised by 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, (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof and (iii) no
such Right Certificate shall be issued to an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
SECTION 24. Redemption and Termination. (a) The Board of
Directors of the Company may, at its option, at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person and
(ii) the Expiration Date, order the redemption of all, but not fewer
than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the "Redemption Date"), and the Company,
at its option, may pay the Redemption Price either in cash or Common
Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to
be at least equivalent in value to the Redemption Price.
<PAGE>
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Within 10 Business
Days after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Each such notice of redemption shall state the
method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by
mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of
Rights.
(c) Notwithstanding anything in this Rights Agreement to the
contrary, the Board of Directors of the Company may not order the
redemption of any of the then outstanding Rights, pursuant to this
Section 24 or otherwise, for a period of one year from and including
any Board Event Date.
SECTION 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the
holder of a Right Certificate (or, prior to the Distribution Date, of
the Common Shares) to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
<PAGE>
another address is filed in writing with the Rights Agent) as follows:
Airborne Freight Corporation
3101 Western Avenue
P.O. Box 662
Seattle, Washington 98121-1024
Attention: Corporate Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Rights Agreement to be given or made by the Company
or by the holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
The Bank of New York
101 Barkley Street, Fl. 12W
New York, NY 10286
Attention: Jim Dimino
Stock Transfer Administrator
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to any holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares)
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to
the time any person becomes an Acquiring Person, except for a period
of one year from and including any Board Event Date, and subject to
the last sentence of this Section 26, the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend any
provision of this Rights Agreement (including the date on which the
Distribution Date shall occur, the definition of "Acquiring Person" or
the time during which the Rights may be redeemed pursuant to Section
24) without the approval of any holder of the Rights. From and after
the Distribution Date, except for a period of one year from and
including the Change of
<PAGE>
Control Date, and subject to applicable law, the Company may, and the
Rights Agent shall if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right Certificates
(a) to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision of this Rights Agreement or (b) to make any other provisions
in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date
shall be null and void unless such supplement or amendment could have
been adopted under the prior sentence from and after the Distribution
Date. Any supplement or amendment to this Rights Agreement duly
approved by the Company that does not amend Sections 19, 20, 21 or 22
in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also
executed by the Rights Agent. In addition, notwithstanding anything to
the contrary contained in this Rights Agreement, no supplement or
amendment to this Rights Agreement shall be made which reduces the
Redemption Price (except as required by Section 12(a)).
SECTION 27. Successors. All the covenants and provisions of
this Rights 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 28. Benefits of Rights Agreement; Determinations and
Actions by the Board of Directors, etc. (a) Nothing in this Rights
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, of the Common
Shares) any legal or equitable right, remedy or claim under this
Rights Agreement; but this Rights 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, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the
exclusive power and authority to administer
<PAGE>
this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Company or to
the Company, or as may be necessary or advisable in the administration
of this Rights Agreement, including the right and power to (i)
interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of
this Rights Agreement (including a determination to redeem or not
redeem the Rights or to amend this Rights Agreement and a
determination of whether an offer constitutes a Qualifying Offer and
whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be
deemed to be in derogation of the obligation of the Board of Directors
of the Company to exercise its fiduciary duty. Without limiting the
foregoing, nothing contained herein shall be construed to suggest or
imply that the Board of Directors shall not be entitled to reject any
Qualifying Offer or any other tender offer or other acquisition
proposal, or to recommend that holders of Common Shares reject any
Qualifying Offer or any other tender offer, or to take any other
action (including the commencement, prosecution, defense or settlement
of any litigation and the submission of additional or alternative
offers or other proposals) with respect to any Qualifying Offer or any
other tender offer or other acquisition proposal that the Board of
Directors believes is necessary or appropriate in the exercise of such
fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant
or restriction of this Rights 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 Rights Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the law of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the law of such State
applicable to contracts to be made and performed entirely within
such State.
SECTION 31. Counterparts; Effectiveness. This Rights
Agreement may be executed in any number of counterparts and each of
such counterparts shall for all
<PAGE>
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. This Rights
Agreement shall be effective as of the Close of Business on the date
hereof.
SECTION 32. Descriptive Headings. Descriptive headings of
the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed as of the day and year first
above written.
AIRBORNE FREIGHT CORPORATION,
by
/s/ Robert S. Cline
-----------------------------------
Name: Robert S. Cline
Title: Chairman of the
Board and Chief
Executive Officer
THE BANK OF NEW YORK, as
Rights Agent,
by
/s/ James Dimino
-----------------------------------
Name: James Dimino
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
AIRBORNE FREIGHT CORPORATION
Pursuant to Section 151 of the General Corporation Law of
the State of Delaware, Airborne Freight Corporation (the
"Corporation"), a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Corporation by paragraph 4.2 of Article FOURTH of the
Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), the Board of Directors of the
Corporation on February 4, 1997, adopted the following resolution
creating a series of Preferred Stock designated as Series A
Participating Cumulative Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the
provisions of the Restated Certificate of Incorporation of the
Corporation, a series of Preferred Stock of the Corporation is
hereby created and that the designation and number of shares
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 A Participating
Cumulative Preferred Stock (without par value)" (the "Series A
Preferred Stock"). The number of shares initially constituting the
Series A Preferred Stock shall be 300,000; provided, however, that, if
more than a total of 300,000 shares of Series A Preferred Stock shall
be issuable upon the exercise of Rights (the "Rights") issued pursuant
to the Rights Agreement dated as of February 14, 1997, between the
Corporation and The Bank of New York, a New York
<PAGE>
banking corporation, as Rights Agent (the "Rights Agreement"), the
Board of Directors of the Corporation, pursuant to Section 151(g) of
the General Corporation Law of the State of Delaware, shall direct by
resolution or resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the provisions of
Section 103 thereof, providing for the total number of shares of
Series A Preferred Stock authorized to be issued to be increased (to
the extent that the Certificate of Incorporation then permits) to the
largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of such Rights.
SECTION 2. Dividends or Distributions. (a) Subject to the
prior and superior rights of the holders of shares of any other series
of Preferred Stock or other class of capital stock of the Corporation
ranking prior and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of the Series A Pre-
ferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of the assets of the Corporation legally
available therefor, (1) quarterly dividends payable in cash on the
last day of each fiscal quarter in each year, or such other dates as
the Board of Directors of the Corporation shall approve (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 a share or a fraction of a share of Series A
Preferred Stock, in the amount of $30 per whole share (rounded to the
nearest cent) less the amount of all cash dividends declared on the
Series A Preferred Stock pursuant to the following clause (2) 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 A Preferred
Stock (the total of which shall not, in any event, be less than zero)
and (2) dividends payable in cash on the payment date for each cash
dividend declared on the Common Stock in an amount per whole share
(rounded to the nearest cent) equal to the Formula Number (as
hereinafter defined) then in effect times the cash dividends then to
be paid on each share of Common Stock. In addition, if the Corporation
shall pay any dividend or make any distribution on the Common Stock
payable in assets, securities or other forms of noncash consideration
(other than dividends or distributions solely in shares of Common
Stock), then, in each such case, the Corporation shall simultaneously
pay or make on each outstanding whole share of Series A Preferred
<PAGE>
Stock a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall
be 100; provided, however, that, if at any time after February 14,
1997, the Corporation shall (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock, (ii)
subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii)
combine (by a reverse stock split or otherwise) the outstanding shares
of Common Stock into a smaller number of shares of Common Stock, then
in each such event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect immediately
prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided
further that, if at any time after February 14, 1997, the Corporation
shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock,
then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or change so that
each share of Preferred Stock continues to be the economic equivalent
of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in Section 2(a)
immediately prior to or at the same time it declares a dividend or
distribution on the Common Stock (other than a dividend or
distribution solely in shares of Common Stock); provided, however,
that, in the event no dividend or distribution (other than a dividend
or distribution in shares of Common Stock) 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,
a dividend of $30 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the
<PAGE>
record date for any corresponding dividend or distribution on the
Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the
Quarterly Dividend Payment Date next preceding the date of original
issue of such shares of Series A Preferred Stock; provided, however,
that dividends on such shares which are originally issued after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date shall
begin to accrue and be cumulative from and after such Quarterly
Dividend Payment Date. Notwithstanding the foregoing, dividends on
shares of Series A Preferred Stock which are originally issued prior
to the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend on
the first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next
preceding the date of original issuance of such shares. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A 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.
(d) So long as any shares of the Series A Preferred Stock
are outstanding, no dividends or other distributions shall be
declared, paid or distributed, or set aside for payment or
distribution, on the Common Stock unless, in each case, the dividend
required by this Section 2 to be declared on the Series A Preferred
Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock
shall not be entitled to receive any dividends or other distributions
except as provided herein.
SECTION 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be
entitled to a number of votes equal to the Formula Number then in
effect, for each share of Series A Preferred Stock held of record on
each matter on which holders of the Common
<PAGE>
Stock or stockholders generally are entitled to vote, multiplied by
the maximum number of votes per share which any holder of the Common
Stock or stockholders generally then have with respect to such matter
(assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable
law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock shall vote together as one class for the
election of directors of the Corporation and on all other matters
submitted to a vote of stockholders of the Corporation.
(c) If, at the time of any annual meeting of stockholders
for the election of directors, the equivalent of six quarterly
dividends (whether or not consecutive) payable on any share or shares
of Series A Preferred Stock are in default, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two. In addition to voting together with the holders of
Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting
separately as a class to the exclusion of the holders of Common Stock,
shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart for payment prior
thereto, to vote for the election of two directors of the Corporation,
the holders of any Series A Preferred Stock being entitled to cast a
number of votes per share of Series A Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any
director who shall have been so elected pursuant to the next preceding
sentence may be removed at any time, either with or without cause,
only by the affirmative vote of the holders of the shares of Series A
Preferred Stock at the time entitled to cast a majority of the votes
entitled to be cast for the election of any such director at a special
meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A
Preferred Stock shall be divested of the foregoing special voting
rights, subject to revesting in the event of each and every subsequent
like default in payments of dividends. Upon the termination of the
foregoing special voting rights, the terms of office of all persons
who may have been elected
<PAGE>
directors pursuant to said special voting rights shall forthwith
terminate, and the number of directors constituting the Board of
Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted
to the holders of the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by
applicable law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required (except
to the extent they are entitled to vote with holders of Common Stock
as set forth herein) for authorizing or taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly
dividends or other dividends or distributions payable on the Series A
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 shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A 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 A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such 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 or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock; provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or
<PAGE>
upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A 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 such shares 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 Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (a) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. Liquidation Rights. Upon the liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, 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 A Preferred
Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, plus an amount equal to the greater of
(x) $100 per whole share or (y) an aggregate amount per share equal to
the Formula Number then in effect 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 A Preferred
Stock, except distributions made ratably on the Series A Preferred
Stock and all other such 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.
SECTION 6. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of
<PAGE>
Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time
be similarly exchanged or changed into an amount per share equal to
the Formula Number then in effect times the aggregate amount of stock,
securities, cash or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is
exchanged or changed. In the event both this Section 6 and Section 2
appear to apply to a transaction, this Section 6 will control.
SECTION 7. No Redemption; No Sinking Fund. (a) The shares of
Series A Preferred Stock shall not be subject to redemption by the
Corporation or at the option of any holder of Series A Preferred Stock
except as set forth in Section 5 of Article IV of the Restated
Certificate of Incorporation of the Corporation; provided, however,
that the Corporation may purchase or otherwise acquire outstanding
shares of Series A Preferred Stock in the open market or by offer to
any holder or holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking
fund.
SECTION 8. Ranking. The Series A Preferred Stock shall rank
junior to all other series of Preferred Stock of the Corporation,
including the 6.9% Convertible Preferred, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special
rights of the shares of such series and the qualifications,
limitations and restrictions thereof.
SECTION 9. Fractional Shares. The Series A Preferred Stock
shall be issuable upon exercise of the Rights issued pursuant to the
Rights Agreement in whole shares or in any fraction of a share that is
one one-hundredth of a share or any integral multiple of such
fraction which shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, exercise voting
rights, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock. In lieu of
fractional shares, the Corporation, prior to the first issuance of a
share or a fraction of a share of Series A Preferred Stock, may elect
<PAGE>
(a) to make a cash payment as provided in the Rights Agreement for
fractions of a share other than one one-hundredths of a share or any
integral multiple thereof or (b) to issue depository receipts
evidencing such authorized fraction of a share of Series A Preferred
Stock pursuant to an appropriate agreement between the Corporation and
a depository selected by the corporation; provided that such agreement
shall provide that the holders of such depository receipts shall have
all the rights, privileges and preferences to which they are entitled
as holders of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancelation
become authorized but unissued shares of Preferred Stock, without
designation as to series until such shares are once more designated as
part of a particular series by the Board of Directors pursuant to the
provisions of paragraph 4.2 of Article Fourth of the Certificate of
Incorporation.
SECTION 11. Amendment. None of the powers, preferences and
relative, participating, optional and other special rights of the
Series A Preferred Stock as provided herein or in the Certificate of
Incorporation shall be amended in any manner which would alter or
change the powers, preferences, rights or privileges of the holders of
Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least 66-2/3% of the outstanding
shares of Series A Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of
at least 66-2/3% of the outstanding shares of Series A Preferred Stock
shall be deemed to apply to the powers, preferences, rights or
privileges of any holder of shares of Series A
<PAGE>
Preferred Stock originally issued upon exercise of the Rights after
the time of such approval without the approval of such holder.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be duly executed in its corporate name on this 5th day
of February, 1997.
AIRBORNE FREIGHT CORPORATION,
by /s/ David C. Anderson
--------------------------
David C. Anderson
Corporate Secretary
and Counsel
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
_________ Rights
NOT EXERCISABLE AFTER THE EARLIEST OF (A) FEBRUARY , 2007,
(B) THE CONSUMMATION OF ANY SECOND STEP TRANSACTION (AS
DEFINED IN THE RIGHTS AGREEMENT DESCRIBED BELOW) AND (C) THE
DATE ON WHICH REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01
PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
AIRBORNE FREIGHT CORPORATION
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of February 14, 1997 (the
"Rights Agreement"), between Airborne Freight Corporation, a Delaware
corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as Rights Agent (the "Rights Agent"), unless the
Rights evidenced hereby shall have been previously redeemed by the
Company, to purchase from the Company at any time after the
Distribution Date (as defined in the Rights Agreement) and prior to
5:00 p.m., Pacific time, on the 10th anniversary of the date of the
Rights Agreement (the "Expiration Date"), at the principal office of
the Rights Agent, or its successors as Rights Agent, in the City of
New York, one one-hundredth (1/100th) of a fully paid, nonassessable
share of Series A Participating Cumulative Preferred Stock, without
par value, of the Company (the "Preferred Shares"), at a purchase
price per one one-hundredth (1/100th) of a share equal to $110 (the
"Purchase Price") payable
<PAGE>
in cash, upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which
may be purchased upon exercise of each Right evidenced by this Right
Certificate, as set forth above, are the Purchase Price and the number
and kind of shares which may be so purchased as of [ ]. As provided in
the Rights Agreement, the Purchase Price and the number and kind of
shares which may be purchased upon the exercise of each Right
evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement), such Rights shall be null and void and
nontransferable and the holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.
This Right Certificate is subject to all 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 reference to the Rights Agreement
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. Copies
of the Rights Agreement are on file at the above-mentioned office of
the Rights Agent and are also available from the Company upon written
request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or
corporate trust office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number and kind of shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
<PAGE>
Rights evidenced by this Right Certificate may be redeemed by the
Company at its option at a redemption price (in cash or shares of
Common Stock or other securities of the Company deemed by the Board of
Directors to be at least equivalent in value) of $.01 per Right (which
amount shall be subject to adjustment as provided in the Rights
Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date.
The Company may, but shall not be required to, issue
fractions of Preferred Shares or distribute certificates which
evidence fractions of Preferred Shares upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing fractional shares, the
Company may elect to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-hundredth of a
share or any integral multiple thereof or to issue certificates or
utilize a depository arrangement as provided in the terms of the
Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company 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, including, without limitation, 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 other distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accordance with
the provisions of the Rights Agreement.
<PAGE>
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of: February , 1997
AIRBORNE FREIGHT CORPORATION,
by
--------------------------
Name:
Title:
Attest:
- ------------------------
Name:
Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent,
by
--------------------
Authorized Officer
<PAGE>
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the Preferred
Shares (or other shares) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
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
<PAGE>
Certificate for the balance remaining 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: ___________, 19__
----------------------
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase
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.
