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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
UST CORP.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2436093
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(STATE OF INCORPORATION OF ORGANIZATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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(b) of the Act:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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None None
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Preferred share purchase rights
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(TITLE OF CLASS)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On September 19, 1995, the Board of Directors of UST Corp. (the
"Company") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $0.625
per share (the "Common Shares"), of the Company. The dividend is payable on
October 6, 1995 (the "Record Date") to the stockholders of record on that date.
Except as described below, each Right, when exercisable, entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per share (the "Preferred
Shares"), of the Company at a price of $40 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and United States Trust Company, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (the date of such an announcement being a "Shares
Acquisition Date"), (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 15% or more of
such outstanding Common Shares or (iii) the declaration by the Board of
Directors of the Company that any person is an "Adverse Person" (the earliest of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate together with a copy of this
Summary of Rights.
The Board of Directors of the Company may declare a person to be an
Adverse Person, after a determination that such person, alone or together with
its affiliates and associates, has become the beneficial owner of 10% or more of
the outstanding Common Shares and a determination by the Board of Directors,
after reasonable inquiry and investigation, that (a) such beneficial ownership
by such person is
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intended or reasonably likely to cause the Company to repurchase the Common
Shares beneficially owned by such person or to cause pressure on the Company to
take action or enter into a transaction or series of transactions which would
provide such person with short-term financial gain under circumstances where the
Board of Directors determines that the best long-term interests of the Company
and its stockholders would not be served by taking such action or entering into
such transactions at that time or (b) such beneficial ownership is causing or
reasonably likely to cause a material adverse impact on the business or
prospects of the Company. However, the Board of Directors of the Company may not
declare a person to be an Adverse Person if, prior to the time that such person
acquired 10% or more of the Common Shares then outstanding, such person provided
to the Board of Directors in writing a statement of such person's purpose and
intentions in connection with the proposed acquisition requested of such person
by the Board of Directors, and the Board of Directors, based on such statement
and reasonable inquiry and investigation, notifies such person in writing that
it will not declare such person to be an Adverse Person; provided, however, that
the Board of Directors may expressly condition in any manner a determination not
to declare a person an Adverse Person on such conditions as the Board of
Directors may select, including without limitation, such person's not acquiring
more than a specified amount of stock and/or on such person's not taking actions
inconsistent with the purposes and intentions disclosed by such person in the
statement provided to the Board of Directors. No delay or failure by the Board
of Directors to declare a person to be an Adverse Person shall in any way waive
or otherwise affect the power of the Board of Directors subsequently to declare
a person to be an Adverse Person. In the event that the Board of Directors
should at any time determine, upon reasonable inquiry and investigation, that
such person has not met or complied with any condition specified by the Board of
Directors, the Board of Directors may at any time thereafter declare such person
to be an Adverse Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
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certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on October 6, 2005 (the "Final Expiration Date"), unless the Rights
are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive
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100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction or a
series of transactions), proper provision will be made so that each holder of a
Right (other than an Acquiring Person or an Adverse Person) will thereafter have
the right to receive, upon the exercise thereof at the then current exercise
price of the Right, that number of shares of common stock of the acquiring
company (or, in the event there is more than one acquiring company, the
acquiring company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person or Adverse Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, (iii) during such time as
there is an Acquiring Person or Adverse Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, or (iv) the
Board of Directors shall determine that a person is an Adverse Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by any Acquiring Person or Adverse Person, will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right. Upon occurrence of
any of the events described in the immediately preceding sentence, any Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person or Adverse Person shall
immediately become null and void. At any time after the occurrence of any such
event and prior to the acquisition by any person or group of 50% or more of the
outstanding Common Shares, the Continuing Directors may
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exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-hundredth of a Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, (ii) the declaration by the Board of Directors that a person
is an Adverse Person or (iii) the expiration of the Rights, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). Under certain circumstances set forth in the
Rights Agreement, such a redemption would require the concurrence of the
Company's "Continuing Directors", that is, any director who is not an Acquiring
Person, an Adverse Person or an affiliate or associate of an Acquiring Person or
Adverse Person, and who was in office prior to the date of the Rights Agreement
or subsequently nominated by a majority of the Continuing Directors. Thereafter,
the Rights may only be redeemed by the Continuing Directors in whole, but not in
part, at the Redemption Price, (a) under certain circumstances described in the
Rights Agreement involving a disposition of Common Shares by the Acquiring
Person or Adverse Person such that such person's common share ownership is
reduced to 10% or less, or (b) if such redemption is incidental to a merger or
other business combination transaction or series of transactions involving the
Company but not involving an Acquiring Person or an Adverse Person and
satisfying certain other conditions. The redemption of the rights may be made
effective at such time on such basis and with such conditions as the Board of
Directors or the Continuing Directors, as the case may be, in their sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the
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Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any ambiguity, to make
changes that do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
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.
The Rights could have certain anti-takeover effects. The Rights could
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors, in light of the ability of the Board of Directors to
redeem the Rights or amend the Rights Agreement as summarized above.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the form of
Rights Certificate, is attached hereto as an exhibit and incorporated herein by
reference. The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
ITEM 2. EXHIBITS
1. Rights Agreement, dated as of September 19, 1995, including Exhibits
thereto, between the Company and United States Trust Company, as Rights Agent.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant as duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
UST CORP.
By: /s/ ERIC R. FISCHER
-----------------------------
Eric R. Fischer
Executive Vice President,
General Counsel and Clerk
DATED: September 26, 1995
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_____________________________________________________________________
UST CORP.
AND
UNITED STATES TRUST COMPANY,
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 19, 1995
_____________________________________________________________________
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TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions ........................................................ 1
Section 2. Appointment of Rights Agent ................................................ 5
Section 3. Issue of Rights Certificates ............................................... 6
Section 4. Form of Rights Certificates ................................................ 8
Section 5. Countersignature and Registration .......................................... 9
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates .............................................. 10
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights .......................................................... 10
Section 8. Cancellation and Destruction of Rights Certificates ........................ 13
Section 9. Reservation and Availability of Preferred Shares ........................... 13
Section 10. Preferred Shares Record Date ............................................... 14
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights .................................. 15
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares ............................................................... 26
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power of the Company ............................... 27
Section 14. Additional Covenants ....................................................... 30
Section 15. Fractional Rights and Fractional Shares .................................... 30
Section 16. Rights of Action ........................................................... 32
Section 17. Agreement of Rights Holders ................................................ 32
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Section 18. Rights Certificate Holder Not Deemed a Stockholder ......................... 33
Section 19. Concerning the Rights Agent ................................................ 33
Section 20. Merger or Consolidation or Change of
Name of Rights Agent .................................................... 34
Section 21. Duties of Rights Agent ..................................................... 35
Section 22. Change of Rights Agent ..................................................... 37
Section 23. Issuance of New Rights Certificates ........................................ 38
Section 24. Redemption ................................................................. 39
Section 25. Exchange ................................................................... 41
Section 26. Notice of Certain Events ................................................... 42
Section 27. Notices .................................................................... 43
Section 28. Supplements and Amendments ................................................. 44
Section 29. Determination and Actions by the
Board of Directors, Etc. ................................................ 45
Section 30. Successors ................................................................. 45
Section 31. Benefits of this Agreement ................................................. 46
Section 32. Severability ............................................................... 46
Section 33. Governing Law .............................................................. 46
Section 34. Counterparts ............................................................... 46
Section 35. Descriptive Headings ....................................................... 46
Signatures .................................................................................. 47
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Exhibit A - Form of Certificate of Vote of Directors
Establishing a Series of a Class of Stock
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Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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Agreement, dated as of September 19, 1995, between UST Corp., a
Massachusetts corporation (the "Company"), and United States Trust Company, a
Massachusetts-chartered banking and trust company (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding as of the close of business on October 6, 1995 (the "Record Date"),
each Right representing the right to purchase one one-hundredth of a Preferred
Share (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and in addition has authorized and directed the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Common Shares of the Company then outstanding or who was such a Beneficial
Owner at any time after the date hereof, whether or not such Person continues
to be the Beneficial Owner of 15% or more of the Common Shares then
outstanding, but shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any entity holding securities of the
Company organized, appointed or established by the Company or any Subsidiary
for or pursuant to the terms of any such plan. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" solely as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company
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and shall, after such share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person".
(b) "Adverse Person" shall mean any Person declared to be
an Adverse Person by the Board of Directors of the Company upon a determination
of the Board of Directors that the criteria set forth in Section 11(a)(ii)(D)
apply to such Person.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (A) securities
tendered pursuant to a tender or exchange offer made by such Person or
any of Person's Affiliates or Associates until such tendered
securities are accepted for payment, purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 23 hereof (the "Original Rights") or pursuant
to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including without limitation pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided,
however, that a person shall not be deemed the
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"Beneficial Owner" of, or to "beneficially own", any security under
this subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)) or disposing of any voting
securities of the Company,
provided, however, that nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter or securities to be the "Beneficial
Owner" of, or to "beneficially own", any securities acquired through such
person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in the Commonwealth
of Massachusetts are authorized or obligated by law or executive order to
close.
(f) "Close of business" on any given date shall mean 5:00
P.M., Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $0.625 per share, of
the Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management, of such other Person or, if such other Person is a Subsidiary
of another Person, of the Person or Persons which ultimately control such
first-mentioned Person and which
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have issued and outstanding such capital stock, equity securities or equity
interests.
(h) "Continuing Director" shall mean any director (not
including honorary directors) of the Company who (i) is not an Acquiring
Person, an Adverse Person or an Affiliate or Associate of an Acquiring Person
or an Adverse Person and (ii) either was (A) a member of the Board of Directors
of the Company on the date hereof or (B) nominated for his or her initial term
of office by (x) at least one Continuing Director and (y) a majority of the
Continuing Directors in office at the time of such nomination.
(i) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(j) "Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(l) "Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(m) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $1.00 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of Vote
of Directors Establishing a Series of a Class of Stock attached to this
Agreement as Exhibit A.
(n) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(o) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(q) "Shares Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
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Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(r) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person,
or which is otherwise controlled by such Person.
(s) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(t) "Voting Stock" shall mean (i) the Common Shares of
the Company and (ii) any other shares of capital stock of the Company entitled
to vote generally in the election of directors or entitled to vote together
with the Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. Whenever any provision of this Agreement requires a determination of
whether a number of shares of Voting Stock comprising a specified percentage of
such Voting Stock has been voted, tendered, acquired, sold or otherwise
disposed of, or a determination of whether a Person has offered or proposed to
acquire a number of shares of Voting Stock comprising such specified
percentage, the number of shares of Voting Stock comprising such specified
percentage of Voting Stock shall in every such case be deemed to be the number
of shares of Voting Stock comprising the specified percentage of the Company's
entire voting power then entitled to vote generally in the election of
directors or then entitled to vote together with the Common Shares in respect
of any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding-up.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agents and any Co-Rights
Agents shall be as the Company shall determine.
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Section 3. Issue of Rights Certificates.
(a) Until the earliest of (i) the close of business on
the tenth Business Day after the Shares Acquisition Date, (ii) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares or (iii) the determination by the
Board of Directors of the Company, pursuant to the criteria set forth in
Section 11(a)(ii)(D), hereof that a Person is an Adverse Person (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights; the earliest of such dates being herein referred to as the
"Distribution Date"), (x) no right may be exercised, (y) the Rights shall be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be certificates for Rights) and not
by separate certificates, and (z) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with the
transfer of the underlying Common Shares. As soon as practicable after the
Distribution Date, the Company shall prepare and execute, the Rights Agent
shall countersign, and the Company shall send or cause to be sent (and the
Rights Agent shall, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a certificate for Rights, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
Common Share so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company shall send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit C hereto (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
<PAGE> 11
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Date, at the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date (or earlier redemption, expiration or termination
of the Rights), the Rights shall be evidenced by such certificates registered
in the names of the holders thereof together 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 associates Rights. Until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, 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 by such certificate.
(c) Certificates issued for Common Shares (including,
without limitation, certificates issued upon transfer or exchange of Common
Shares) after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date shall be deemed also to be certificates for Rights and
shall have impressed on, 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 between UST Corp.
and United States Trust Company, dated as of September 19, 1995 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of UST Corp. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may expire, or may be
evidenced by separate certificates and no longer be evidenced by this
certificate. UST Corp. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written
request therefor. As described in the Rights Agreement, under certain
circumstances, Rights issued to Acquiring Persons or Adverse Persons
(as defined in the Rights Agreement) or certain related persons and
any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or
<PAGE> 12
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acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall
each be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law 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 Section
11 and Section 23 hereof, the Rights Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth of a Preferred
Share set forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 23 hereof that represents Rights that the Company knows are
beneficially owned by: (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or Adverse Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person or Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person or Adverse Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person with whom
such Acquiring Person or Adverse Person has any continuing oral or written
plan, agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer that the Board of Directors of the Company has Determined is
part of any oral or written plan, agreement, arrangement or understanding that
has as a primary purpose or effect avoidance of Section 7(e) hereof, and any
Rights Certificate issued
<PAGE> 13
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pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Certificate were issued to a Person who
was or became an Acquiring Person, Adverse Person or an Affiliate or
an Associate of an Acquiring Person or Adverse Person. Accordingly,
this Certificate and the Rights represented hereby may be or become
null and void in the circumstances specified in Section 7(e) of the
Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by the President, any
Executive Vice President, or the Treasurer of the Company, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Clerk or an Assistant Clerk of
the Company, either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may 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
Rights Certificates had not ceased to be such officer of the Company; and any
Rights Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, books for registration
and transfer of the Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
<PAGE> 14
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Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Sections 4(b), 7(e) and 15 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, split-up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share as the Rights
Certificate or Rights Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split-up, combine or
exchange any Rights Certificate or Rights Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the person entitled
thereto a Rights Certificate or Rights 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 Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company shall execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to subsection (e), the registered holder of
any Rights 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 Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-hundredth of a Preferred
Share (or such other number of Preferred Shares or other securities) as to
which the Rights are exercised, at or prior to the earliest
<PAGE> 15
-11-
of (i) the close of business on October 6, 2005 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 24 hereof
(the "Redemption Date"), or (iii) the time at which such Rights are exchanged
as provided in Section 25 hereof (such earliest time being herein referred to
as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be $40.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with Section 9
hereof in cash or by certified check, cashier's check or money order or bank
draft paid or payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) 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, in its sole discretion, shall have elected to
deposit the Preferred Shares issuable upon conversion of the Rights hereunder
into a depositary, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares 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 such
request, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in accordance
with Section 15 hereof, (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 Rights 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 Rights Certificate. In the event that the Company is obligated to issue
other securities of the Company pursuant to Section 11(a), the Company shall
make all arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.
<PAGE> 16
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(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Rights Certificate or to his duly authorized assigns, subject to the
provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, an Adverse Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person or Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or Adverse Person becomes such,
or (iii) a transferee of an Acquiring Person or Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which a
majority of the Continuing Directors of the Company then in office determine is
part of an oral or written 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 such Rights, whether under this Agreement
or otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or Adverse Person or the Affiliates, Associates or transferees of an
Acquiring Person or Adverse Person hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such exercise shall have been properly
completed and duly executed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the
Beneficial Owner (or former
<PAGE> 17
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Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Rights
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 Preferred Shares held in its treasury, the number of Preferred
Shares (or other securities) that will be sufficient to permit the exercise in
full of all outstanding Rights in accordance with Section 7 of this Agreement.
(b) The Company covenants and agrees that it shall take
all such action as may be necessary to ensure that all Preferred Shares or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares or other securities
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(c) 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 the
Rights Certificates or of any Preferred Shares or other securities upon the
exercise of 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
Rights Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares or other
securities in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered
<PAGE> 18
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for exercise or to issue or to deliver any certificates or depositary receipts
for Preferred Shares or other securities upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
(d) If then required by applicable law, the Company shall
use its best efforts to (i) file, as soon as practicable following the
Distribution Date, a registration statement under the Securities Act of l933,
as amended (the "Securities Act"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act and the
rules and regulations thereunder) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities or (B) the Expiration
Date. The Company will also take such action as may be appropriate under the
blue sky laws of the various states. The Company may temporarily suspend the
exercisability of the Rights in order to prepare and file 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. The Company shall thereafter issue a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(e) If at the time the Rights become exercisable, the
then outstanding Common Shares are listed on any national or regional
securities exchange or are quoted on the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or any successor thereto
or other comparable quotation system, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all Preferred
Shares (and, following the occurrence of a Triggering Event, other securities)
reserved for issuance upon such exercise to be quoted on such system or listed
on such exchange, as the case may be.
Section 10. Preferred Shares Record Date. Each person in whose name
any certificate for Preferred Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby
<PAGE> 19
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on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
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
Preferred Shares (or other securities) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Shares (or other securities) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and in Section 7(e), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the
<PAGE> 20
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Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 25 of this Agreement, in
the event: (A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the Shares Acquisition Date,
or any Adverse Person or any Associate or Affiliate of any Adverse
Person, at any time after the Adverse Person has been declared to be
such, directly or indirectly, (1) shall merge into the Company or
otherwise combine with the Company and the Company shall be continuing
or surviving corporation of such merger or combination and the Common
Shares of the Company or other equity securities of the Company shall
remain outstanding, (2) shall, in one transaction or a series of
transactions, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for Common Shares, for
shares of other equity securities of the Company, or for securities
exercisable for or convertible into shares of equity securities of the
Company (Common Shares or otherwise) or otherwise obtain from the
Company, with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible into
shares of such equity securities (other than pursuant to a pro rata
distribution to all holders of Common Shares), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of assets in one transaction or a series of
transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries, on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, other than pursuant to a
Section 13 Event, (4) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of assets having an
aggregate fair market value of more than $5,000,000 in one transaction
or a series of transactions, to, from or with (as the case may be) the
Company or any of the Company's Subsidiaries (other than incidental to
the lines of business, if any, engaged in as of the date hereof
between the Company and such Acquiring Person or Adverse Person or
Associate or Affiliate), other than pursuant to a Section 13 Event,
(5) shall receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past
<PAGE> 21
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practices, or (6) shall receive the benefit, directly or indirectly
(except proportionately as a stockholder and except if resulting from
a requirement of law or governmental regulation), of any loans (other
than in the ordinary course of business), advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries; or (B)
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any of its Subsidiaries or any
entity holding securities of the Company organized, appointed or
established by the Company or any of its Subsidiaries for or pursuant
to the terms of any such plan), alone or together with its Affiliates
and Associates, shall become an Acquiring Person; or (C) during such
time as there is an Acquiring Person or Adverse Person, there shall be
any reclassification of securities (including any reverse stock
split), or recapitalization or reorganization of the Company or other
transaction or series of transactions involving the Company which has
the effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries beneficially
owned by any Acquiring Person or Adverse Person or any Affiliate or
Associate thereof; (D) the Board of Directors of the Company, by
majority vote, shall declare any Person to be an Adverse Person, after
(1) a determination that such Person, alone or together with its
Affiliates and Associates, has become the Beneficial Owner of 10% or
more of the outstanding Common Shares and (2) a determination by the
Board of Directors, after reasonable inquiry and investigation,
including such consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such Beneficial Ownership
by such Person is intended to cause, is reasonably likely to cause or
will cause the Company to repurchase the Common Shares beneficially
owned by such Person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions which
would provide such Person with short-term financial gain under
circumstances where the Board of Directors determines that the best
long-term interests of the Company and its stockholders, but for the
actions and possible actions of such Person, would not be served by
taking such action or entering into such transactions or series of
transactions at that time or (b) such Beneficial Ownership is causing
or reasonably likely to cause a material adverse impact (including,
but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company; PROVIDED,
HOWEVER, that the
<PAGE> 22
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Board of Directors of the Company may not declare a Person to be an
Adverse Person if, prior to the time that such Person acquired 10% or
more of the Common Shares then outstanding, such Person provided to
the Board of Directors in writing a statement of such Person's purpose
and intentions in connection with the proposed acquisition of Common
Shares, together with any other information reasonably requested of
such Person by the Board of Directors, and the Board of Directors,
based on such statement and reasonable inquiry and investigation,
including such consultation, if any, with such Person as the Board of
Directors shall deem appropriate, determines to notify and notifies
such Person in writing that it will not declare such Person to be an
Adverse Person; provided, further, that the Board of Directors may
expressly condition in any manner a determination not to declare a
Person an Adverse Person on such conditions as the Board of Directors
may select, including without limitation, such Person's not acquiring
more than a specified amount of stock and/or on such Person's not
taking actions inconsistent with the purposes and intentions disclosed
by such Person in the statement provided to the Board of Directors.
No delay or failure by the Board of Directors to declare a Person to
be an Adverse Person shall in any way waive or otherwise affect the
power of the Board of Directors subsequently to declare a Person to be
an Adverse Person. In the event that the Board of Directors should at
any time determine, upon reasonable inquiry and investigation,
including consultation with such Persons as the Board of Directors
shall deem appropriate, that such Person has not met or complied with
any condition specified by the Board of Directors, the Board of
Directors may at any time thereafter declare such person to be an
Adverse Person pursuant to the provisions of this Section
11(a)(ii)(D),
then, and in each such case, proper provision shall promptly be made so that,
following the Distribution Date, each holder of a Right, except as provided in
Section 7(e) hereof, shall have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right and for all purposes of
this
<PAGE> 23
-19-
Agreement) by 50% of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) hereof) on the date of such
first occurrence (such number of shares, the "Adjustment Shares"); PROVIDED,
HOWEVER, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of Common Shares
that are authorized by the Company's Restated Articles of
Organization, as amended, but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company shall:
(A) determine the excess of the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over the
Purchase Price (such excess, the "Spread"), and (B) with respect to
each Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares of the same or a
different class or other equity securities of the Company (including,
without limitation, preferred shares or units of preferred shares that
at least two thirds of the Continuing Directors in office at the time
have deemed (based, among other things, on the dividend and
liquidation rights of such preferred shares) to have substantially the
same economic value as Common Shares (such preferred shares,
hereinafter referred to as "common shares equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of
the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by at least two thirds
of the Continuing Directors in office at the time after considering
the advice of a competent investment banking firm selected by the
Board of Directors of the Company; PROVIDED, HOWEVER, if the Company
shall have not made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section 24(b)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available), and then, if
<PAGE> 24
-20-
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full
of Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and
may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. The Company shall make a public
announcement when the exercisability of the Rights has been
temporarily suspended, and again when such suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per Common Share on the Section
11(a)(ii) Trigger Date and the value of any "common share equivalent"
shall be deemed to have the same value as the Common Shares on such
date.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
or more favorable rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered
<PAGE> 25
-21-
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price and the denominator
of which shall be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (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) of the portion
of the assets, cash or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; PROVIDED, HOWEVER, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made,
<PAGE> 26
-22-
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof,
the "current per share market price" of any security (a "Security" for
the purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; PROVIDED, HOWEVER, that in
the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares, or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security
is not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if
the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use, or, if
on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by
the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted
to trading on any national securities exchange, a Business Day.
<PAGE> 27
-23-
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share 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.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so 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 with
respect to the Preferred Shares contained in Section 11(a) through (c), (e),
(h) through (k) and (m) and the provisions of Sections 7, 9, 10, 13, 14 and 15
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time
<PAGE> 28
-24-
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 15 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such
<PAGE> 29
-25-
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price and the number
of one one-hundredths of a Preferred Share which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the then par
value, if any, of the Preferred Shares issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior 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 shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, stock dividends or issuance of rights,
<PAGE> 30
-26-
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date (i) declare a dividend on
the outstanding Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, (iii) combine the outstanding Common Shares into a
smaller number of shares or (iv) issue any of its shares of capital stock in a
reclassification of the outstanding Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving entity), the number of Rights associated
with each Common Share or other such shares then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each Common Share or other such shares following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator
of which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the
total number of Common Shares outstanding immediately following the occurrence
of such event.
(o) The failure by the Board of Directors to declare a
Person to be an Adverse Person following such Person becoming the Beneficial
Owner of 10% or more of the outstanding Common Stock shall not imply that such
Person is not an Adverse Person or limit the Board of Directors' right at any
time in the future to declare such Person to be an Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing Common Shares)
in accordance with Section 27 hereof. The Rights Agent may rely on such
certificate without further inquiry and may assume that no such adjustment has
been made unless and until it shall have received such certificate.
<PAGE> 31
-27-
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power of the Company.
(a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 14(b) hereof) shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person (other than to the Company or one or more of its Subsidiaries in one or
more transactions each of which complies with Section 14(b) hereof), then, and
in each such case, proper provision shall be made so that (i) following the
Distribution Date, each holder of a Right, subject to Section 7(e), shall have
the right to receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such number of freely
tradeable Common Shares of the Principal Party (as hereinafter defined), free
and clear of liens, rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by (l) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such shares for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current per share market price of the Common Shares of
such Principal Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the
<PAGE> 32
-28-
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(x) or (y) of the first sentence of paragraph (a) of this Section 13,
the Person that is the issuer of any securities into which Common
Shares of the Company are converted in such merger of consolidation,
and if no securities are so issued, the Person that is the other party
to the merger or consolidation (including, if applicable, the Company,
if it is the surviving corporation); and
(ii) in the case of any transaction described in
(z) of the first sentence of paragraph (a) of this Section 13, the
Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions;
PROVIDED, HOWEVER, that in any such case (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Securities Exchange Act of
l934, as amended (the "Exchange Act"), and such Person is a direct or indirect
subsidiary or Affiliate or another Person, "Principal Party" shall refer to
such other Person; (2) in case such Person is a subsidiary, directly or
indirectly, or Affiliate of more than one Person, the Common Shares of two or
more of which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all of
such joint venturers and the Principal Parties in each such chain shall bear
the obligations set
<PAGE> 33
-29-
forth in this Section l3 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and each
Principal Party and each other Person who may become a Principal Party as a
result of such consolidation, merger, sale or transfer shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any Section 13 Event, the
Principal Party at its own expense shall:
(i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the securities
purchasable upon the exercise of the Rights on an appropriate form,
will use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and will use
its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon exercise of
the Rights on a national securities exchange or to meet the
eligibility requirements for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. If a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall
<PAGE> 34
-30-
thereafter become exercisable solely in the manner described in paragraph (a)
of this Section 13.
Section 14. Additional Covenants.
(a) The Company covenants and agrees that it shall not at
any time after the Distribution Date (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries taken as a whole, any other Person if at the time
of or after such consolidation, merger or sale there are any charter or by-law
provisions or any rights, warrants or other instruments outstanding or any
other action taken which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. The Company shall not consummate any
such consolidation, merger or sale unless prior thereto the Company and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this subsection.
(b) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 24 or Section 28
hereof, take any action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(n),
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights 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 the purposes of this Section 15(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with
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respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such agreement
shall provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered
holders of Rights 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. For the purposes of this Section 15(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions
or events specified in Section 11 giving rise to the right to receive Common
Shares upon the exercise of a Right, the Company shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu of fractional
Common Shares, the Company may pay to the registered holders of Rights
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 a Common
Share. For purposes of this
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Section 15(c), the current market value shall be determined in the manner set
forth in Section 11(d) hereof for the Trading Day immediately prior to the date
of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 16. Rights of Action. Excepting the rights of action given
to the Rights Agent under Section 19 hereof, all rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Rights 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 Rights 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 Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement. Holders of Rights shall be entitled to recover the reasonable costs
and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
Section 17. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates
are transferable 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;
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(c) subject to Section 6 and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name the
Rights 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 notations of ownership or writing
on the Rights Certificates or the associated Common Shares certificate 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; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 18. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
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 Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 19. Concerning the Rights Agent. 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
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the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
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 Agreement in reliance upon any Rights Certificate or
certificate for Preferred Shares or 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.
Section 20. Merger or Consolidation or Change of Name of Rights
Agent. 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 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
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Rights 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 Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the
<PAGE> 39
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countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
or Adverse Person) be proved or established by the Company prior to 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
President, any Executive Vice President, any Vice President, the Treasurer or
the Clerk 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 Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect
<PAGE> 40
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of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of a
certificate furnished pursuant to Section 12 describing any such adjustment);
nor shall it be responsible for any determination by the Board of Directors of
the Company of the current market value of the Rights or Preferred Shares or
Common Shares; 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 other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any Preferred Shares or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the President, any Executive Vice President, any Vice
President, the Clerk or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission),
<PAGE> 41
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the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(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 Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
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, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certification
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with 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
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail at the expense of the Company. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor
<PAGE> 42
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Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and Preferred Shares by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or any state of the
United States so long as such corporation is in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer 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 million. 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 Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to 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 New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.
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Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to paragraph (b) of this Section 24 or by action of the
Continuing Directors pursuant to paragraph (c) of this Section 24, and shall
not be redeemed in any other manner, except as provided by Section 32.
(b) The Board of Directors of the Company may, at its
option, at any time prior to the earliest of (x) the close of business on the
tenth day following a Shares Acquisition Date, (y) the declaration by the Board
of Directors that any Person is an Adverse Person or (z) 5:00 p.m., E.S.T., on
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) of this proviso, then there
must be Continuing Directors then in office and such authorization shall
require the concurrence of at least two-thirds of such Continuing Directors:
(i) such authorization occurs on or after the time a Person becomes an
Acquiring Person or an Adverse Person, or (ii) such authorization occurs on or
after the date of a change (resulting from one or more proxy or consent
solicitations) in a majority of the directors in office at the commencement of
such solicitations if any Person who is a participant in such solicitations has
stated (or, if upon the commencement of such solicitations, a majority of the
Board of Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or may
consider taking, any action that would result in such Person becoming an
Acquiring Person or an Adverse Person or that would cause the occurrence of a
Triggering Event. The redemption of the Rights by the Board of Directors may
be made effective at such time on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(c) In addition to the right of redemption reserved in
Section 24(b), the Continuing Directors then in office may redeem all but not
less than all of the then outstanding Rights at the Redemption Price following
the occurrence of a Shares Acquisition Date or date of declaration that an
Adverse Person is such but prior to any event described in Section 11(a)(ii)(A)
or (C) or Section 13(a), at their option, upon the affirmative vote or written
consent of not less than two-thirds of such Continuing Directors, (i) if (A) an
Acquiring Person or Adverse
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Person shall have transferred or otherwise disposed of a number of Common
Shares in one transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not result in the
occurrence of a Triggering Event or the Company (with the approval of at least
two-thirds of Continuing Directors) shall have issued additional equity
securities, in either instance such that such Person is thereafter a Beneficial
Owner of less than 10% of the outstanding Common Shares, and (B) there is no
other Acquiring Person or Adverse Person immediately following the occurrence
of the event described in clause (A), or (ii) in connection with any Section
13(a) Event in which all holders of Common Shares are treated alike and not
involving (other than as a holder of Common Shares being treated like all other
such holders) an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or Adverse Person or any other Person in which such Acquiring Person,
Adverse Person, Affiliate or Associate has any interest, or any other Person
acting directly or indirectly on behalf of or in association with any Acquiring
Person, Adverse Person, Affiliate or Associate. Any redemption of the Rights
by the Continuing Directors may be made effective at such time, on such basis
and with such conditions as the Continuing Directors in their sole discretion
may establish.
(d) Immediately upon the action of the Board of Directors
or the Continuing Directors, as the case may be, of the Company ordering the
redemption of the Rights pursuant to paragraph (b) or paragraph (c) of this
Section 24, 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. The Company shall promptly
give public notice of any such redemption; PROVIDED, HOWEVER, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action ordering the redemption of
the Rights pursuant to paragraph (b) or (c), as the case may be, the Company
shall mail a notice of redemption to all the holders of the then outstanding
Rights 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. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The Company may, at its option,
pay the Redemption Price in cash, Common Shares (based on the current per share
market price of the Common Shares as of the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the
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first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption under Section 24(b) has expired.
Section 25. Exchange.
(a) The Continuing Directors then in office may, at their
option, upon the affirmative vote or written consent of not less than
two-thirds of such Continuing Directors, at any time after the occurrence of a
Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Continuing Directors shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Continuing
Directors of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 25 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. 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 of the 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 will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
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(c) In any exchange pursuant to this Section 25, the
Company, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient
Common Shares or Preferred Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 25, the Company shall take all such action as may be necessary to
authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions
of Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Rights 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 a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 25.
Section 26. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries
<PAGE> 47
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(taken as a whole) to, any other Person, (v) to effect the liquidation,
dissolution or winding-up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 27 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding-up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or Preferred Shares, whichever shall be
the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred Shares shall be
deemed thereafter to refer to Common Shares or, if appropriate, other
securities.
Section 27. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
UST Corp.
40 Court Street
Boston, Massachusetts 02108
Attention: Clerk
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid,
<PAGE> 48
-44-
addressed (until another address is filed in writing with the Company) as
follows:
United States Trust Company
30 Court Street
Boston, MA 02108
Attention: Secretary
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate or
certificate representing 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 Company.
Section 28. Supplements and Amendments. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 28, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date and subject
to the penultimate sentence of this Section 28, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder (which lengthening or
shortening, following the first occurrence of an event set forth in clauses (i)
or (ii) of the proviso to Section 24(b) hereof, shall be effective only if
there are Continuing Directors and shall require the concurrence of at least
two-thirds of such Continuing Directors), or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person, an Adverse Person or any
Affiliate or Associate of an Acquiring Person or Adverse Person); PROVIDED,
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable, or (B) any
other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights (other than an Acquiring Person, an Adverse Person or any Affiliate or
Associate of an Acquiring Person or Adverse Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of
<PAGE> 49
-45-
this Section 28, the Rights Agent shall execute such supplement or amendment
unless the Right Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interests under this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of one-hundredths of a
Preferred Share for which a Right is exercisable. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Shares.
Section 29. Determination and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. Except for those powers specifically granted in this Agreement to
the Continuing Directors, the Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights, to declare that a Person is an Adverse Person or to
amend the Agreement). All such actions, calculations, interpretations and
determinations and any actions, calculations, interpretations and
determinations by the Continuing Directors with respect to the powers granted
to them under this Agreement (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the Board or
by the Continuing Directors, as the case may be, in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights Certificates and all other parties, and (y) not subject the Board or
any Director to any liability to the holders of the Rights Certificates.
Section 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
<PAGE> 50
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Section 31. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, of the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, of the Common Shares).
Section 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 24(b)
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors.
Section 33. Governing Law. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be
governed by and construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and performed entirely within such
Commonwealth.
Section 34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
<PAGE> 51
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, as an instrument under seal, all as of the day
and year first above written.
UST CORP.
Attest:
By: ________________________________ By: _______________________
Title: Eric R. Fischer, Title: Neal F. Finnegan,
Executive Vice President
President and Clerk
UNITED STATES TRUST
COMPANY
Attest:
By: _________________________________ By: _______________________
Title: Eric R. Fischer, Title: Domenic Colasacco,
Executive Vice President
President and Clerk
<PAGE> 52
Exhibit A
FORM
of
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING A
SERIES OF A CLASS OF STOCK
(General Laws, Chapter 156B, Section 26)
We, [ ] and [ ], [President] and [Clerk],
of UST Corp., located at 40 Court Street, Boston, Massachusetts 02108, do hereby
certify that at a meeting of the directors of the corporation held on September
19, 1995, the following vote establishing and designating a series of a class of
stock and determining the relative rights and preferences thereof was duly
adopted:
VOTED: That pursuant to Article IV(B) of the Restated Articles of
Organization, as amended, of UST Corp. (the "Corporation"), the Board of
Directors hereby establishes a series of Preferred Stock, par value $1.00 per
share (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the preferences, voting powers,
qualifications and special or relative rights or privileges thereof, as
follows:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 300,000. Such number of shares may be increased or decreased by
vote of the Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of
<PAGE> 53
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shares of Series A Preferred Stock, in preference to the holders of
Common Stock, par value $0.625 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the first day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time (i)
declare a dividend on the Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, (iii)
combine the outstanding shares of Common Stock into a smaller number
of shares or (iv) issue any of its shares of capital stock in a
reclassification of the outstanding shares of Common Stock (including
any such reclassification in connection with a consolidation or merger
in which the Corporation is the continuing or surviving entity), then
in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
<PAGE> 54
-3-
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on 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. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall
at any time (i) declare a dividend on the Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, (iii) combine the outstanding shares of Common Stock
into a smaller number of shares or (iv) issue any of its shares of
capital stock in a reclassification of the outstanding shares of
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or
surviving entity), then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
<PAGE> 55
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(B) Except as otherwise provided herein, in any other
Certificate of Vote of Directors establishing a series of Preferred
Stock or any similar stock, or by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by 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 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, 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 junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
<PAGE> 56
-5-
(iv) redeem or 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. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Corporation's Restated Articles of Organization, as amended, or in any other
Certificate of Vote of Directors establishing a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, 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 $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of 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 distributions made ratably on the Series A
Preferred Stock and all 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. In the event the Corporation shall at any time (i)
declare a dividend on the Common
<PAGE> 57
-6-
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, (iii) combine the outstanding shares of Common Stock into a
smaller number of shares or (iv) issue any of its shares of capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving entity), then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time (i) declare a dividend on the
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, (iii) combine the outstanding shares of Common Stock
into a smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving entity), then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all other series of the Corporation's preferred stock, unless the terms of any
such series shall provide otherwise.
<PAGE> 58
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Section 10. Amendment. The Restated Articles of Organization, as
amended, of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series
A Preferred Stock, voting together as a single class; it being understood that
nothing in this Section 10 shall be deemed to restrict the Corporation from
designating additional shares of Series A Preferred Stock if the Board of
Directors determines that it is necessary to do so in order to achieve the
purposes of the Rights Agreement, dated September 19, 1995 between the
Corporation and United States Trust Company.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this [ ] day of September in the year 1995.
________________________________
[President]
________________________________
[Clerk]
<PAGE> 59
Exhibit B
Form of Rights Certificate
Certificate No. R ________ ______ Rights
NOT EXERCISABLE AFTER OCTOBER 6, 2005 OR AFTER EARLIER REDEMPTION OR
EXCHANGE BY THE COMPANY. THE RIGHTS ARE SUBJECT, AT THE OPTION OF THE
COMPANY, TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON, ADVERSE PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR ADVERSE PERSON. ACCORDINGLY, THIS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.](1)
Rights Certificate
UST CORP.
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 September 19, 1995 (the "Rights Agreement"),
between
_____________________
(1) The portion of the legend in brackets shall be inserted only if
applicable.
<PAGE> 60
-2-
UST Corp., a Massachusetts corporation (the "Company"), and United States Trust
Company (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., Boston time, on October 6, 2005 at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent designated for such purpose, one one-hundredth of a fully paid
nonassessable share of Series A Junior Participating Preferred Stock, without
par value per share (the "Preferred Shares"), of the Company, at a purchase
price of $40.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of October
6, 1995, based on the Preferred Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.001 per Right or (ii) may be exchanged in whole or
in part by the Company at its option for Preferred Shares or shares of the
Company's Common Stock, par value $1.00 per share.
<PAGE> 61
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No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, 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 or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights 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 _____________, 19__.
ATTEST: UST CORP.
_______________________________ By: ______________________
Countersigned:
UNITED STATES TRUST COMPANY
By: ____________________________
Authorized Signature
<PAGE> 62
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Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ___________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________, 19__
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
- - - -------------------------------------------------------------------------------
Assignment Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person, Adverse Person or an Affiliate or Associate of any
such Acquiring Person or Adverse Person (as such terms are defined pursuant to
the Rate Agreement);
<PAGE> 63
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Form of Reverse Side of Rights Certificate -- continued
(2) After due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any person who is, was or subsequently became an
Acquiring Person, Adverse Person or an Affiliate or Associate of an Acquiring
Person or Adverse Person.
Dated: __________________, 19 ___________________________________
Signature
- - - -------------------------------------------------------------------------------
Notice
The signatures to the foregoing Assignment and Certification must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
- - - -------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To UST CORP.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or such other securities of the Company or of any other person) 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 the above number of Rights shall not be all the Rights evidenced by this
Rights Certificate, then a new Rights Certificate for the balance remaining of
such Rights shall be registered and returned to the undersigned, unless the
undersigned requests that the Rights Certificate for the balance be registered
in the name of and delivered to:
<PAGE> 64
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Form of Reverse Side of Rights Certificate -- continued
Please insert social security
or other identifying number: ________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ___________________, 19__
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
- - - -------------------------------------------------------------------------------
Election Certification
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised, sold, assigned or transferred by or on behalf of a
Person who is or was an Acquiring Person, Adverse Person or an Affiliate or
Associate of any such Acquiring Person or Adverse Person (as such terms are
defined pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person, Adverse Person or an Affiliate or Associate of an Acquiring
Person or Adverse Person.
Dated: ________________, 19__ ___________________________________
Signature
- - - -------------------------------------------------------------------------------
<PAGE> 65
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Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signatures in the foregoing Election to Purchase and Certification
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Assignment or
the Election to Purchase, as the case may be, is not completed, the Company and
the Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person, Adverse Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
<PAGE> 66
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On September 19, 1995, the Board of Directors of UST Corp. (the
"Company") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $0.625
per share (the "Common Shares"), of the Company. The dividend is payable on
October 6, 1995 (the "Record Date") to the stockholders of record on that date.
Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $1.00 per share (the
"Preferred Shares"), of the Company at a price of $40 per one one-hundredth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and United States Trust Company, as
Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Rights
certificates will be distributed. Until the earlier to occur of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common Shares (the date
of such an announcement being a "Shares Acquisition Date"), (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Common Shares or (iii) the declaration by the Board of Directors of the Company
that any person is an "Adverse Person" (the earliest of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such Common
Share certificate together with a copy of this Summary of Rights.
<PAGE> 67
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The Board of Directors of the Company may declare a person to be an
Adverse Person, after a determination that such person, alone or together with
its affiliates and associates, has become the beneficial owner of 10% or more
of the outstanding Common Shares and a determination by the Board of Directors,
after reasonable inquiry and investigation, that (a) such beneficial ownership
by such person is intended or reasonably likely to cause the Company to
repurchase the Common Shares beneficially owned by such person or to cause
pressure on the Company to take action or enter into a transaction or series of
transactions which would provide such person with short-term financial gain
under circumstances where the Board of Directors determines that the best
long-term interests of the Company and its stockholders would not be served by
taking such action or entering into such transactions at that time or (b) such
beneficial ownership is causing or reasonably likely to cause a material
adverse impact on the business or prospects of the Company. However, the Board
of Directors of the Company may not declare a person to be an Adverse Person
if, prior to the time that such person acquired 10% or more of the Common
Shares then outstanding, such person provided to the Board of Directors in
writing a statement of such person's purpose and intentions in connection with
the proposed acquisition requested of such person by the Board of Directors,
and the Board of Directors, based on such statement and reasonable inquiry and
investigation, notifies such person in writing that it will not declare such
person to be an Adverse Person; provided, however, that the Board of Directors
may expressly condition in any manner a determination not to declare a person
an Adverse Person on such conditions as the Board of Directors may select,
including without limitation, such person's not acquiring more than a specified
amount of stock and/or on such person's not taking actions inconsistent with
the purposes and intentions disclosed by such person in the statement provided
to the Board of Directors. No delay or failure by the Board of Directors to
declare a person to be an Adverse Person shall in any way waive or otherwise
affect the power of the Board of Directors subsequently to declare a person to
be an Adverse Person. In the event that the Board of Directors should at any
time determine, upon reasonable inquiry and investigation, that such person has
not met or complied with any condition specified by the Board of Directors, the
Board of Directors may at any time thereafter declare such person to be an
Adverse Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
<PAGE> 68
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Common Shares outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date, and the separate Rights Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on October 6, 2005 (the "Final Expiration Date"), unless the
Rights are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will be entitled to
receive
<PAGE> 69
-4-
100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction or
a series of transactions), proper provision will be made so that each holder of
a Right (other than an Acquiring Person or an Adverse Person) will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company (or, in the event there is more than one acquiring company,
the acquiring company receiving the greatest portion of the assets or earning
power transferred) which at the time of such transaction would have a market
value of two times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person or Adverse Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, (iii) during such time as
there is an Acquiring Person or Adverse Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, or (iv) the
Board of Directors shall determine that a person is an Adverse Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by any Acquiring Person or Adverse Person, will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right. Upon occurrence of
any of the events described in the immediately preceding sentence, any Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person or Adverse Person shall
immediately become null and void. At any time after the occurrence of any such
event and prior to the acquisition by any person or group of 50% or more of the
outstanding Common Shares, the Continuing Directors may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a
<PAGE> 70
-5-
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, (ii) the declaration by the Board of Directors that a person
is an Adverse Person or (iii) the expiration of the Rights, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). Under certain circumstances set forth in
the Rights Agreement, such a redemption would require the concurrence of the
Company's "Continuing Directors", that is, any director who is not an Acquiring
Person, an Adverse Person or an affiliate or associate of an Acquiring Person
or Adverse Person, and who was in office prior to the date of the Rights
Agreement or subsequently nominated by a majority of the Continuing Directors.
Thereafter, the Rights may only be redeemed by the Continuing Directors in
whole, but not in part, at the Redemption Price, (a) under certain
circumstances described in the Rights Agreement involving a disposition of
Common Shares by the Acquiring Person or Adverse Person such that such person's
common share ownership is reduced to 10% or less, or (b) if such redemption is
incidental to a merger or other business combination transaction or series of
transactions involving the Company but not involving an Acquiring Person or an
Adverse Person and satisfying certain other conditions. The redemption of the
rights may be made effective at such time on such basis and with such
conditions as the Board of Directors or the Continuing Directors, as the case
may be, in their sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board (in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights (excluding the interests of
any
<PAGE> 71
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Acquiring Person or Adverse Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable.
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.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
