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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 18, 1996.
H. B. FULLER COMPANY
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Minnesota 0-3488 41-0268370
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
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2400 Energy Park Drive
St. Paul, Minnesota 55108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 645-3401
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On July 18, 1996, the Board of Directors of H. B. Fuller Company (the
"Company") approved the extension of the benefits afforded by the Company's
existing shareholder rights plan by adopting a new shareholder rights plan. The
new plan, like the existing plan, is intended to preserve the long-term value of
the Company for all of its stakeholders, guard against partial stock offers and
other coercive tactics and promote continuity and stability. It does not prevent
a takeover, but should encourage anyone seeking to acquire the Company to
negotiate with the Board prior to attempting a takeover.
SHAREHOLDER RIGHTS PLAN. In connection with the shareholder rights
plan, the Board of Directors declared a dividend of one Common Stock purchase
right (a "Right") for each outstanding share of Common Stock, par value $1.00
(the "Common Stock"), of the Company. The dividend will be paid on July 30, 1996
to shareholders of record on July 30, 1996. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement"), dated as of
July 18, 1996, between the Company and Norwest Bank Minnesota, National
Association, as Rights Agent (the "Rights Agent").
Initially, the Rights will be evidenced by the certificates
representing Common Stock and no separate right certificates will be
distributed. The Rights will separate from the Common Stock, and a Distribution
Date for the Rights will occur upon the earlier of: (i) the first date of a
public announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" (i.e., has become, subject to certain
exceptions, the beneficial owner of Common Stock or other capital stock which
equals or exceeds 15% of the voting power of the Company (other than outstanding
preferred stock) and (ii) the commencement or public announcement of a tender
offer or exchange offer for securities having 15% or more of the outstanding
voting power. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights will be mailed to holders of record of the
Common Stock on the Distribution Date, and such separate right certificates will
evidence the Rights.
Each Right will entitle the registered holder to purchase from the
Company one share of Common Stock at a price of $180.00 (the "Purchase Price"),
subject to adjustment. The Rights are not exercisable until the Distribution
Date. The Rights will expire on July 30, 2006, unless extended or earlier
redeemed or exchanged by the Company.
The Purchase Price payable and the number of shares of Common Stock
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 shares of Common Stock, (ii) upon the
grant to holders of the shares of Common Stock of certain rights or warrants to
subscribe for or purchase shares of Common Stock or convertible securities at
less than the then current market price of the shares of Common Stock or (iii)
upon the distribution to holders of the shares of Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in shares of Common Stock) or of subscription rights or warrants (other
than those described in clause (ii) of this paragraph).
If any person becomes an Acquiring Person, holders of Rights (other
than an Acquiring Person) will have the right to receive upon exercise thereof
at the then current Purchase Price that number of shares of Common Stock having
a market value of two times the Purchase Price, subject to certain possible
adjustments.
If the Company is acquired in certain mergers or other business
combination transactions or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold after there is an
Acquiring Person, holders of the Rights will thereafter have the Right to
receive, upon exercise thereof at the then current exercise price of the Right,
that number of shares of Common Stock of the acquiring company (or, in certain
cases, one of its Affiliates) having a market value of two times the Purchase
Price.
After a person becomes an Acquiring Person, and prior to the
acquisition by a person of 50% or more of the outstanding Common Stock, the
Board of Directors of the Company may exchange all or part of the Rights for
Common Stock at an exchange ratio of one share of Common Stock per Right.
Before a person has become an Acquiring Person, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right, subject to adjustment.
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NEW PREFERRED STOCK. In connection with the adoption of the
shareholder rights plan, the Board of Directors authorized a new series of
preferred stock ("Series B Shares") that would be exchanged for the Company's
existing Series A Preferred Stock ("Series A Shares"), if and at such time as
the rights issued pursuant to the new shareholder rights plan become
exercisable. The Company entered into a Stock Exchange Agreement dated July 18,
1996, with Elmer L. Andersen by which the Series B Shares would be exchanged for
all Series A Shares on the Distribution Date. The exchange of the Series B
Shares, all of which is held by Elmer L. Andersen, is intended to preserve Mr.
Andersen's voting power, in the event any rights are exercised.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
4. Rights Agreement, dated as of July 18, 1996, between the Company
and Norwest Bank Minnesota, National Association, as Rights Agent,
which includes as an exhibit the form of Right Certificate.
10. Stock Exchange Agreement, dated July 18, 1996, between H. B.
Fuller Company and Elmer L. Andersen, including Designations for
Series B Preferred Stock.
99. Press release dated July 18, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereto duly authorized.
Date: July 24, 1996
H. B. FULLER COMPANY
By: /s/Walter Kissling
-----------------------------------
Walter Kissling
President and Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
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4 Rights Agreement, dated as of July 18, 1996, between H. B. Fuller
Company and Norwest Bank Minnesota, National Association, as Rights
Agent, which includes as an exhibit the form of Right Certificate
10 Stock Exchange Agreement, dated July 18, 1996, between H. B. Fuller
Company and Elmer L. Andersen, including Designations for Series B
Preferred Stock
99 Press release dated July 18, 1996
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Exhibit 4
SHAREHOLDER RIGHTS AGREEMENT
BETWEEN
H.B. FULLER COMPANY
AND NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
AS RIGHTS AGENT
DATED AS OF JULY 18, 1996
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SHAREHOLDER RIGHTS AGREEMENT
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This Agreement, dated as of the 18th day of July, 1996, is between H.B.
Fuller Company, a Minnesota corporation (the "Company"), and Norwest Bank
Minnesota, National Association, a national banking association (the "Rights
Agent").
WITNESSETH:
-----------
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend distribution (the "Distribution") of one Right (as such term is
hereinafter defined) for each outstanding share of Common Stock, $1.00 par
value, of the Company outstanding on July 30, 1996 and has authorized the
issuance of one Right in respect to each share of Common Stock of the Company
issued between July 30, 1996 and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right representing
the right to purchase one share of Common Stock of the Company upon the terms
and subject to the conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Company deems it to be in the best
interests of the Company and its stockholders to enter into this Rights
Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this 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 (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of a
Substantial Block but shall not include an Exempt Person. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of securities by the Company which, by reducing the number of
securities outstanding, causes such Person to become the Beneficial Owner of a
Substantial Block; provided, however, that if a Person shall become the
Beneficial Owner of a Substantial Block as the result of an acquisition of
securities by the Company and shall, after such acquisition by the Company,
become the Beneficial Owner of any additional shares of Common Stock, then such
Person shall be deemed to be an "Acquiring Person."
(b) "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 hereof.
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(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any such Person's Affiliates or Associates
has (A) 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 (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights at any time prior to the occurrence of a Section
11(a)(ii) Event (as hereinafter defined) but thereafter including Rights
acquired by such Person from and after the Distribution Date other than Rights
acquired by such Person directly from the Company pursuant to Section 3(a) or
Rights acquired by such Person upon adjustments under Section 11 or 22 to Rights
that would not be deemed hereunder to be beneficially owned by such Person),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender offer or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B)(1) the right to vote or dispose of
or (2) the "beneficial ownership" (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 (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering);
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any securities if the agreement, arrangement or
understanding to vote such securities (1) arises solely from a revocable proxy
or consent given to such Person or any of such Person's Affiliates or Associates
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act, and
(2) is not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report) as being beneficially owned
by such Person; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding whether or not in
writing (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this paragraph (c)) or disposing
of any securities of the Company. Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to beneficially own hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the States of New York or Minnesota are
authorized or obligated by law or executive order to close.
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(e) "Close of Business" on any given date shall mean 5:00 P.M., St. Paul,
Minnesota time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M.. St. Paul, Minnesota time, on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean the
Common Stock, $1.00 par value, of the Company. "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock with
the greatest voting power of such Person or the equity securities or other
equity interest having power to control or direct the management of such Person
or, if such Person is a Subsidiary of another Person that ultimately controls
such first-mentioned Person.
(g) "Continuing Director" shall mean any Person who (1) is a member of the
Board of Directors of the Company, (2) while such Person is a member of the
Board of Directors, is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, and (3) was a member of the Board of Directors on the
date of this Agreement. A "Continuing Director" shall also mean any Person who
(1) subsequently becomes a member of the Board of Directors and (2) while such
Person is a member of the Board of Directors, is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person, or of any such Affiliate or Associate, if such Person's
initial nomination for election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing Directors.
(h) "Distribution Date" shall have the meaning set forth in Section 3.
(i) "Exempt Person" shall mean the Company, any Subsidiary of the Company,
any employee benefit plan (whether or not subject to any of the provisions of
Employee Retirement Income Security Act of 1974, as amended from time to time)
of the Company or any Subsidiary of the Company or any Person or entity
organized or appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan.
(j) "Expiration Date" shall have the meaning set forth in Section 7.
(k) "Final Expiration Date" shall have the meaning set forth in Section 7.
(l) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) to such entity.
(m) "Qualifying Tender Offer" shall mean an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least a majority
of the members of the Board of Directors of the Company who are not officers of
the Company and who are not representatives, nominees, Affiliates or Associates
of an Acquiring Person, after receiving advice from one or more investment or
financial advisers, to be (x) fair to shareholders (taking into account all
factors that the Board of Directors deems relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (y)
otherwise in the best interests of the Company, its stockholders, employees,
customers, suppliers and creditors, and the communities in which the Company
does business.
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(n) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii).
(o) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a).
(p) "Stock 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) of the Exchange Act) by the
Company or any Person that an Acquiring Person has become an Acquiring Person.
(q) "Subsidiary" shall mean, with reference to any Person, any corporation
or other entity of which a majority of voting power or other equity interest is
beneficially owned, directly or indirectly, by such Person.
(r) "Substantial Block" shall mean a number of shares of Common Stock or
other capital stock of the Company which equals or exceeds fifteen percent (15%)
of the Voting Power of the Company then outstanding.
(s) "Voting Power" when used with reference to the Company shall mean the
voting power of all classes and series of capital stock of the Company now or
hereafter authorized other than the voting power of any of the shares of
preferred stock, $10 par value, outstanding as of July 18, 1996.
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 shall, prior to the Distribution Date, also be the
holders of the Common Stock) 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 additional rights agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificate. (a) Until the earlier of (i) the
Stock Acquisition Date or (ii) the date of the commencement of, or first public
announcement of the intent of any Person (other than an Exempt Person) to
commence a tender or exchange offer for securities of the Company that would
constitute a Substantial Block (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights, the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for the Common Stock shall be deemed also
to be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection with
the transfer of the Common Stock. Subject to Section 7(e), as soon as
practicable after the Distribution Date, the Rights Agent will send, by first-
class, postage prepaid mail, to each record holder of the Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto, evidencing one Right for each share of Common Stock so held.
As of and following the Distribution Date, the Rights will be evidenced solely
by such Right Certificates. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11, at the
time Right Certificates are distributed, the Company may, to the extent provided
in Section 14(a), make
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the necessary and appropriate rounding adjustments (as set forth in Section
14(a)) so that Right Certificates are distributed representing only whole
numbers of Rights and cash is paid in lieu of
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fractional Rights pursuant to Section 14(a). As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) With respect to certificates for the Common Stock outstanding as of
July 30, 1996, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock registered in the names of the holders of the
Common Stock. Until the earlier of the Distribution Date or the Expiration Date,
the surrender for transfer of any of the certificates for the Common Stock
outstanding on July 30, 1996, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
(c) Certificates for the shares of Common Stock issued after July 30,
1996, but prior to the earlier of the Distribution Date or the Expiration Date
shall, as soon as practicable after such date, 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 the Rights Agreement between H.B. Fuller Company and
Norwest Bank Minnesota, National Association dated as of July 18, 1996 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
H.B. Fuller Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. H.B. Fuller Company will mail to the
holder of this certificate a copy of the Rights Agreement, without charge,
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and any
subsequent holder of such Rights, whether currently held by, or on behalf of,
such Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented by
such certificate.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A 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, Section 14 and Section 22 hereof, the Right
Certificates, when distributed, shall on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock as shall be set forth
therein at the price per share set forth therein (the "Purchase Price"), but the
number and type of securities purchasable
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upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment, as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
its Chief Financial Officer or its Treasurer either manually or by facsimile
signature and shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, issued and delivered with the same force and
effect as though the Person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices in the State of Minnesota, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 7(e) and Section 14, 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 Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, evidencing a like number of Rights and entitling the
registered holder to purchase a like number of shares of Common Stock as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any right Certificate shall make such request in writing, delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office of the Rights Agent. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificates until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificates, and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof, as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 7(e), countersign and
deliver to the person entitled thereto, a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
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(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to the provisions of Section 7(e), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions set
forth in Sections 9(c) and 23(a)), in whole or in part, at any time after the
Distribution Date and upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
completed and executed, to the Rights Agent, together with payment of the
Purchase Price for each share of Common Stock (or other securities, cash or
other assets, as the case may be) as to which the Rights are exercised, at or
prior to the Close of Business on the earlier of (i) the Close of Business on
July 30, 2006 (the "Final Expiration Date"), or (ii) the date on which the
Rights are redeemed, as provided in Section 23 (such earlier date being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each share of the Common Stock pursuant to the
exercise of a Right shall be $180.00, shall be subject to adjustment, from time
to time, as provided in Sections 11 and 13, and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly completed and
executed, accompanied by payment of the Purchase Price for the shares (or other
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall, subject
to Section 20(k) thereupon promptly (i) requisition from any transfer agent of
the Common Stock of the Company certificates for the number of shares of Common
Stock to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14, (iii) promptly after receipt of such
certificates, cause the same to be delivered to, or upon the order of, the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, and (iv) when appropriate, after receipt,
promptly deliver such cash for a fractional share to, or upon the order of, the
registered holder of such Right Certificate.
(d) Subject to Section 14, if the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to such holder's duly authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights that are or
were beneficially owned by (i) an Acquiring Person, or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an
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Acquiring Person, or an Associate or Affiliate of an Acquiring Person, who
becomes a transferee after such Acquiring Person becomes such, and (iii) a
transferee of an Acquiring Person, or an Associate or Affiliate of an Acquiring
Person, who becomes a transferee prior to or concurrently with such Acquiring
Person becoming such and receives such Rights pursuant to either (A) a
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transfer (whether or not for consideration) from such Acquiring Person, or
Associate or Affiliate, to or on behalf of holders of equity interests in such
Acquiring Person, or Associate or Affiliate, or to any Person with whom such
Acquiring Person, or Associate or Affiliate has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which a majority of the Continuing Directors (or, if there are no Continuing
Directors, the Board of Directors) concludes in good faith (whether before or
after such transfer) is a part of a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of this Section 7(e), shall become null
and void without any further action, and any holder of such Rights shall have no
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) are complied with, but shall
have no liability to any holder of Rights as a result of its failure to make any
determinations with respect to an Acquiring Person, or its Affiliates or
Associates, or the transferees thereof 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 such registered holder shall have (i) duly
completed and executed the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
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 Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
Section 9. Reservation and Availability of Shares of Common Stock. (a)
The Company covenants and agrees that it will use its best efforts to cause to
be reserved and kept available out of its authorized and unissued shares of
Common Stock the number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the Common Stock issuable upon the exercise of Rights may
be listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, a
registration statement under the Securities Act of 1933 (the "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
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such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or blue sky laws of the
various states. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, if the requisite qualification in such jurisdiction shall not have
been obtained.
(d) The Company shall take all such action as may be necessary to ensure
that all shares of Common Stock delivered upon exercise of Rights shall, at the
time of delivery of the certificates of such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company 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 Right Certificates or of any shares of Common Stock 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
Right Certificates or the issuance or delivery of certificates for Common Stock
in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for shares of Common Stock upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for Common Stock (or other securities, as the case may be) is issued
upon the exercise of Rights shall, for all purposes, be deemed to have become
the holder of record of the shares of Common Stock (or other securities, as the
case may be) represented thereby on, and such certificate shall be dated the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of 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 Common Stock 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 Common Stock transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, 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 of Shares or Number of
Rights. The Purchase Price, the number 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:
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(a) (i) In the event the Company shall, at any time after the date of
this Agreement, (A) declare a dividend on the Common Stock payable in shares of
Common Stock, (B) subdivide the outstanding shares of Common Stock, (C) combine
the outstanding shares of Common Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Common Stock
(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 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 Common Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. 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 24, in the event any Person shall become an
Acquiring Person, unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) or is an acquisition of
shares of Common Stock pursuant to a Qualifying Tender Offer, then promptly
following the first occurrence of a Section 11(a)(ii) Event, proper provision
shall be made so that each holder of a Right, except as provided below and in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof at
the then-current Purchase Price in accordance with the terms of this Agreement,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then-current Purchase Price by the then number
of shares of Common Stock for which a Right is then exercisable and (y) dividing
that product by 50% of the current market price per share of the Common Stock of
the Company (determined pursuant to Section 11(d)) on the date of the occurrence
of such Section 11(a)(ii) Event.
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's articles of incorporation, 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, the Company shall,
except to the extent an election is made under Section 24), use its best efforts
to have the shareholders of the Company take such action as may be necessary to
authorize additional shares of Common Stock of the Company for issuance upon
exercise of the Rights. If a majority of the Continuing Directors of the Company
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the Company may suspend the exercisability of the Rights to the extent
necessary (but not to more than 90 days after the date of the occurrence of any
of the events specified in Section 11(a)(ii) hereof) for the Company to seek
stockholder approval for the authorization of such additional shares. In the
event of any suspension under this Section 11(a)(iii), the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at the time such
suspension is no longer in effect.
(b) In the event the Company shall fix a record date for the issuance of
rights or warrants to all holders of the Common Stock entitling them (for a
period expiring within 45
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calendar days after such record date) to subscribe for or purchase Common Stock
(or securities convertible into Common Stock) at a price per share of Common
Stock (or having a conversion price per share of Common Stock, if a security
convertible into the Common Stock) less than the current market price per share
of Common Stock (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, of which the numerator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and of
which the denominator shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). 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 a
majority of the Continuing Directors or, if there are no Continuing Directors,
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than a
regular periodic cash dividend out of earnings or retained earnings or a
dividend payable in shares of Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, of which
the numerator shall be the current market price per share of Common Stock (as
defined in Section 11(d)) on such record date, less the fair market value (as
determined in good faith by the majority of the Continuing Directors, or if
there are no Continuing Directors, 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 or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one share of the Common
Stock and of which the denominator shall be such current market price per share
of the Common Stock. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
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) For the purpose of any computation hereunder, the "current market
price" per share of the Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of the Common Stock 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 market price
per share of the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of a dividend or distribution on
the Common Stock payable in shares of Common Stock, and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend or distribution,
then, and in each such case, the current market price shall be
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appropriately adjusted to reflect the current market price per common share
equivalent. 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 Common
Stock 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
Common Stock is listed or admitted to trading or, if the Common Stock 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 the National Association
of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market marker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by a majority of the Continuing Directors
or, if there are no Continuing Directors, the Board of Directors shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in good faith
by a majority of the Continuing Directors, or if there are no Continuing
Directors, 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 such 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 ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 but for the first sentence of this Section 11(e)
shall be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
13(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than shares of Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time, in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m) and the provisions of Sections 7, 9, 10, 13
and 14 with respect to the shares of Common Stock 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 shares of Common Stock
purchasable, from time to time, hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
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(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
calculation made in Section 11(b) and (c) after the Distribution Date, 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 shares (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares 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 shares of Common Stock 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 shares of Common Stock 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 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 Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Stock 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 shares of Common Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record
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date the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock 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 or securities 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 in their sole discretion a majority of the Continuing Directors
(or, if there are no Continuing Directors, the Board of Directors) shall
determine to be advisable in order that any combination or subdivision of the
shares of Common Stock, issuance wholly for cash of any shares of Common Stock
at less than the current market price, issuance wholly for cash of shares of
Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Common Stock shall not be taxable to such
stockholders.
(n) The Company will not, except as permitted in Sections 23, 24 or 27,
take any action if at the time such action is taken, it is reasonable
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights unless such action is
approved by a majority of the Continuing Directors.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made, as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate, and (c) mail a brief summary thereof to each holder of a
Right Certificate (or, if prior to the Distribution Date, to each holder of
record of a certificate representing shares of Common Stock) in accordance with
Section 26.
Section 13. Consolidation. Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event, following the Stock 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), 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) shall consolidate with the
Company, or merge with and into the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person 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 transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, then, and in each case,
proper provision shall be made so that (i) each holder of a Right, except as
provided in Section 11(a)(iii), shall thereafter 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 shares of Common Stock of the Principal
Party (as hereinafter defined) as shall be equal to the result obtained by (1)
multiplying the then-current Purchase Price by the number of shares of Common
Stock for which a Right is then exercisable and (2) dividing that product by
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50% of the current market price per share of common stock of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
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 shares
of its Common Stock) 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 shares of its Common Stock thereafter
deliverable upon the exercise of the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other
transfers.
(b) "Principal Party" shall mean
(i) in case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), 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 Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, or more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock which 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 such Principal Party 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 will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights, on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing, and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
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(d) The Company shall not, at any time after the Distribution Date and
prior to the Expiration Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons, whether in a
transaction constituting a Section 13 Event or otherwise, if at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction, there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations or sales or other transfers. In the event that 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 thereafter
become exercisable in the manner described in Section 13(a).
(f) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a Qualifying Tender Offer (or a
wholly owned Subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such Qualifying Tender Offer, and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such Qualifying Tender Offer. Upon consummation of any such
transaction contemplated by this Section 13(e), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights, or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(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 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 a majority of the
Continuing Directors (or, if there are no Continuing Directors, the Board of
Directors). 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
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determined in good faith by a majority of the Continuing Directors (or, if there
are no Continuing Directors, the Board of Directors) shall be used.
(b) The Company shall not be required to issue fractions of shares upon
exercise of the Rights or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, the Company may pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of this Section 14(b), the
current market value of a share of Common Stock shall be the closing price of a
shares of Common Stock (as determined pursuant to the second sentence of Section
11(d)) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
such holder's right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent designated for such purpose if
surrendered at the office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) subject to Sections 6 and 7, the Company and the Rights Agent may deem
and treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the associated
Common Stock 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
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(d) notwithstanding anything in this Agreement to the contrary, the
Company, the Rights Agent, the Board of Directors and the Continuing Directors
shall have no liability to any holder of a Right or other Person as a result of
their inability to perform any 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 shall use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Common Stock 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 Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in 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 in the premises.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this
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Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates
(or, prior to the Distribution Date, the associated Common Stock certificate),
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 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 Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any
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adjustment required under the provisions of Section 11 or 13 or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual notice of
any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Common Stock 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 Chairman of the Board, the Chief Executive Officer, the President,
the Secretary, the Chief Financial Officer 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 to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company or any Subsidiary may be interested, or contract with or lend money to
the Company or any Subsidiary 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 any Subsidiary
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 for or 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 or
powers if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed and executed 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 or transfer without first consulting with the
Company.
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Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, the associated Common
Stock certificates) by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Right Certificates (or, prior to the Distribution Date, the associated
Common Stock certificates) by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, the associated Common Stock certificates)
(who shall, with such notice, submit his Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificates) for inspection by
the Company), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the States of Minnesota or New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the States of Minnesota or New York, in good standing,
having an office in the States of Minnesota or New York which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least fifty
million dollars ($50,000,000). After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates (or, prior to the Distribution Date, the associated
Common Stock certificates). Failure to give any notice provided for in this
Section 21, 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 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary with the exception
of Section 7(e), the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
or kind of class of shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company,
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issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however that (i) no such Right
Certificate shall be issued if, and to the extend that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (x) the Stock Acquisition Date,
or (y) the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 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, that for the purposes
hereof the Board of Directors of the Company shall be entitled to so redeem the
Rights only if it consists of a majority of Continuing Directors. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the "current market price", as defined in Section 11(d) hereof, of the
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to this Section 23, 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. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last address 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 redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange. (a) The Board of Directors of the Company may, at its
option, at any time after 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)) for Common Shares,
each Right being exchangeable for one Common Share, appropriately adjusted to
reflect any transaction specified in Section 11(a)(i) occurring after the date
hereof (such number of Common Shares issuable in exchange for one Right being
referred to herein as the "Exchange Shares"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Person (other than any Exempt Person), 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 Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 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 the Exchange Shares. 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 that is mailed in the
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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.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding, or authorized but unissued, to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights or shall take such other action
specified in Section 11(a) (iv) hereof.
(d) 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 Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
subsection (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second and third
sentences of Section 11(d) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall propose, at
any time after the Distribution Date, (a) to pay any dividend payable in stock
of any class to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock (other than a regular periodic
cash dividend out of earnings or retained earnings), (b) to offer to the holders
of its Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) to effect any reclassification of its Common
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Common Stock), (d) 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 a series of
related transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person, other than
a merger in which the Company is the surviving corporation and no vote of
shareholders of the Company is required to consummate the merger, or (e) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right, in accordance with
Section 26, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
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 Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least twenty (20) days prior to the record date
for determining holders of the Common Stock for purposes of such action, and in
the case of any such other action, at least twenty (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 Stock, whichever shall be the earlier. In case any
Section 1l(a)(ii) Event shall occur, then, in any such case, the Company shall
as soon as practicable thereafter give to each holder of a Right, in
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accordance with Section 26, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii).
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address it filed in writing with
the Rights Agent) as follows:
H.B. Fuller Company
2400 Energy Park Drive
St. Paul, Minnesota 55108
Attention: Corporate Secretary
with a copy to the General Counsel at the same address. Subject to the
provisions of Section 21, any notice or demand authorized by this Agreement to
be given or made by the Company or by the holder of any Right Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) to or
on the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
Norwest Bank Minnesota, National Association
Stock Transfer Department
161 North Concord Exchange
South St. Paul, Minnesota 55075
Notices of demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate) 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 27. Supplements and Amendments. The Company and the Rights
Agent shall from time to time, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Right Certificates (or,
prior to the Distribution Date, the associated Common Stock certificates) in
order (i) to cure any ambiguity herein, (ii) to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, (iii) to extend the Final Expiration Date, (iv) prior to the
Distribution Date, to otherwise change or supplement any provision herein in any
manner which the Company may deem necessary or desirable to effectuate the
purposes of this Agreement or (v) following the Distribution Date, to otherwise
change or supplement any provision herein in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Right Certificates (other than an Acquiring Person or any
Affiliate or Associate thereof); provided, however that this Agreement may not
be supplemented or amended in any way (other than pursuant to clauses (i) and
(ii) above) at any time after the occurrence of a Section 11(a)(ii) Event
without the consent of a majority of the Continuing Directors. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment
unless the Rights Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interests under this Agreement. Prior
to the
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Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. The
Board of Directors (and/or, as provided for herein, the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
the Company (and/or, as provided herein, a majority of the Continuing Directors,
as the case may be) or necessary or advisable in the administration of this
Agreement, including without limitation the right and power to interpret this
Agreement and to make all determinations deemed necessary or advisable for the
administration of this Agreement. Any action which, pursuant to this Agreement,
may not be taken without the consent, approval or determination of a majority of
Continuing Directors may not be taken if the Company, at the time of the
proposed action, has no Continuing Directors. All such acts, interpretations and
determinations done or made by the Board of Directors and/or a majority of the
Continuing Directors in good faith shall be final, conclusive and binding on the
Company, the Rights Agent and the holders of the Rights. Accordingly, the Board
of Directors and the Continuing Directors, as the case may be, shall not be
liable to the holders of the Rights or any other party for any determination
made, action taken or action omitted to be taken pursuant to the terms of this
Agreement, if such determination, action or omitted action was made or taken or
omitted in good faith.
Section 30. 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 Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Minnesota and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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 33. 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.
Section 34. Severability. If any portion or provision of this Agreement
shall be held void, illegal, unenforceable or in conflict with any applicable
law or regulation then in effect, the validity or enforceability of the
remaining portions or provisions shall not be affected thereby; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such
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term, provision, covenant or restriction is held to be invalid, void or
unenforceable and a majority of the Continuing Directors, or if there are no
Continuing Directors, 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 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board of Directors.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
H.B. FULLER COMPANY
Attest:
By: /s/ Richard C. Baker By: /s/ Walter Kissling
-------------------------------- --------------------------------
Richard C. Baker Walter Kissling
Title: Vice President, General Title: President and Chief Executive
Counsel & Secretary Officer
----------------------------- -----------------------------
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Attest:
By: /s/ Susan J. Roeder By: /s/ Barbara M. Novak
-------------------------------- --------------------------------
Susan J. Roeder Barbara M. Novak
Title: Assistant Secretary Title: Assistant Vice President
----------------------------- -----------------------------
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<PAGE>
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R-
NOT EXERCISABLE AFTER JULY 30, 2006 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
Right Certificate
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 July 18, 1996 (the "Rights Agreement") between H.B. Fuller
Company, a Minnesota corporation (the "Company"), and Norwest Bank Minnesota,
National Association, a national banking association (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. (St. Paul, Minnesota
time) on July 30, 2006 at the principal office of the Rights Agent, or its
successors as Rights Agent, one fully paid nonassessable share of Common Stock,
$1.00 par value (the "Common Stock"), of the Company, at a purchase price of
$180.00 per share (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly completed and
executed. The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchase upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of July 30, 1996, based on the shares of Common Stock of the Company as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of shares of Common Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
In certain circumstances and as described in the Rights Agreement, cash,
property, common stock or other securities may be issued by the Company in lieu
of Common Stock upon the exercise of the Rights.
This Right Certificate is subject to all of the terms, provisions and conditions
of the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent.
This Right Certificate, with or without other Right Certificates, upon surrender
at the office of the Rights Agent designated for such purpose, may be exchanged
for another Right Certificate or Right Certificate of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Right Certificate or Right
Certificate surrendered shall have entitled such holder to purchase. If this
Right Certificate
-35-
<PAGE>
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $.01 per Right.
No fractional shares of Common Stock will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Common Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, as such, any of the rights of a shareholder of the company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of _____________________.
H.B. FULLER COMPANY
Attest:
By: _____________________________ By: _____________________________
Title: __________________________ Title: __________________________
COUNTERSIGNED:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By: _____________________________
Authorized Signature
-36-
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(to be executed by the registered holder if such holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers
unto _________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ________________________ as
attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Date:_______________________
____________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associates of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Date:_____________________
__________________________
Signature
Signature Guaranteed:
NOTICE
------
-37-
<PAGE>
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
on enlargement or any change
-38-
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the Right Certificate.)
To H.B. Fuller Company
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of such Rights (or such other securities of the
Company or of any other person which may be issuable upon exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
(Please insert social security or other identifying number)
________________________________________________________________
(Please print name and address)
________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in name of and delivered to:
(Please insert social security or other identifying number)
___________________________________________________________
(Please print name and address)
__________________________________________________________
Dated: __________________________
_________________________________
Signature
(Signature must conform in all respects to name of holder as specified on the
face of this Right Certificate)
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate are not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined 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 Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
-39-
<PAGE>
Dated:____________________________
__________________________________
Signature
Signature Guaranteed:
-40-
<PAGE>
Exhibit 10
STOCK EXCHANGE AGREEMENT
------------------------
THIS AGREEMENT made and entered into as of this 18th day of July, 1996, by
and between H.B. Fuller Company, a Minnesota corporation (the "Company"), and
Elmer L. Andersen, an individual resident of Minnesota ("Holder").
WHEREAS, Holder currently owns 45,900 shares (the "Series A Shares") of
Series A Preferred Stock, par value $6.6667 per share (the "Series A Preferred
Stock"), of the Company, which constitute all of the authorized, issued and
outstanding shares of Series A Preferred Stock; and
WHEREAS, on the date hereof, the Company has entered into a Shareholder
Rights Agreement dated as of the date hereof (the "Rights Agreement") with
Norwest Bank Minnesota, National Association, as Rights Agent; and
WHEREAS, the Company and Holder desire that the voting power of Holder
attributable to the Series A Shares not be diminished as a result of the
exercise or exchange of Rights (as such term is used in the Rights Agreement)
that may be distributed pursuant to the Rights Agreement; and
WHEREAS, the Company and Holder have agreed to preserve such voting power
by entering into this Agreement; and
WHEREAS, on the date hereof, the Company's Board of Directors has
authorized 45,900 shares (the "Series B Shares") of a new series of Preferred
Stock, par value $6.6667 per share (the "Series B Preferred Stock"), of the
Company, which Series B Shares have the powers, designations, preferences,
rights, qualifications, limitations and restrictions set forth in the
Designations for Series B Preferred Stock (the "Certificate") set forth in
Exhibit A hereto; and
WHEREAS, the Certificate provides that the Series B Shares shall have
special voting rights that will prevent dilution of the voting power of Holder
in the event any Rights are exercised or exchanged; and
WHEREAS, pursuant to this Agreement, in the event a Distribution Date (as
defined in the Rights Agreement) occurs, the Company has agreed to issue to
Holder, in exchange for the Series A Shares, the Series B Shares.
NOW THEREFORE, in consideration of the premises, the respective
undertakings of the parties set forth below and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and Holder agree as follows:
1. Issuance of Series B Shares; Exchange. (a) On the Distribution Date,
the Company shall file the Certificate of Designations for the Series B Shares
with the Minnesota Secretary of State and shall issue the Series B Shares to
Holder in exchange for all Series A Shares. Upon receipt by the Company from
Holder of the stock certificate representing the Series A Shares as required
below, the Company shall issue and deliver to Holder a duly authorized and
executed stock certificate evidencing the Series B Shares.
-41-
<PAGE>
(b) On the Distribution Date, Holder will surrender to the Company the
Series A Shares for cancellation by delivering the stock certificate
representing the Series A Shares to the Company duly endorsed for transfer or
accompanied by a duly executed stock power. The Series A Shares will be
cancelled by the Company and will be returned to the status of authorized and
unissued Series A Shares.
2. Representations, Warranties and Agreements of the Company. The Company
hereby represents, warrants and agrees that, upon issuance to Holder, the Series
B Shares shall be validly issued, fully paid and nonassessable and free of all
liens and encumbrances.
3. Representations, Warranties and Agreements of Holder. Holder hereby
represents, warrants and agrees that:
(a) As of the Distribution Date, the Series A Shares will be free and
clear of all liens and encumbrances.
(b) Holder hereby represents and agrees that the Series B Shares are being
acquired pursuant to this Agreement for investment purposes and not with the
view toward the distribution or sale thereof in a public offering within the
meaning of the federal Securities Act of 1933, as amended. Holder acknowledges
that the Series B Shares will not be registered under federal or applicable
state securities laws, and that the Company will be relying upon the foregoing
investment representation in issuing the Series B Shares to Holder. Holder
acknowledges that the transferability of the Series B Shares will be subject to
restrictions imposed by all applicable federal and state securities laws and
agrees that the certificate evidencing the Series B Shares may be imprinted with
an appropriate legend setting forth these restrictions on transferability.
4. Termination. This Agreement shall automatically terminate and be of no
further force and effect on the earlier of (a) the date on which Rights
Agreement terminates or on which the Rights (as defined in the Rights Agreement)
are redeemed by the Company and (b) on the date if and when a majority of the
Series A Shares then outstanding shall not be owned beneficially by one or more
members of the class (collectively, the "Holder-Related Parties") consisting of
(i) the original beneficial owners of the Series A Preferred Stock; (ii) the
spouses of the original beneficial owners of the Series A Preferred Stock; and
(iii) the children and more remote issue of the original beneficial owners of
the Series A Preferred Stock (including those sustaining that relationship by
reason of adoption) and their respective spouses. Series A Preferred Stock held
directly or indirectly by or for a person, including stock held in an estate or
trust (to the extent of such person's interest as beneficiary of such estate or
trust), shall be deemed to be owned beneficially by such person.
5. Miscellaneous. (a) Except as otherwise provided herein, this Agreement
and any provisions hereof may be amended, changed, waived, discharged or
terminated only by an agreement in writing signed by the party against which
enforcement of the amendment, change, waiver, discharge or termination is
sought.
(b) The expenses of each party incurred in connection with this Agreement
shall be paid by the party incurring such expenses.
-42-
<PAGE>
(c) All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be delivered, or mailed first
class, postage pre-paid, registered or certified mail:
(i) If to Holder to Elmer L. Andersen, 1483 Bussard Court, Arden
Hills, Minnesota 55112, or at such other address as Holder may specify by
written notice to the Company; or
(ii) If to the Company, to H.B. Fuller Company, 1200 County Road E
West, Arden Hills, Minnesota 55112, Attention: Corporate Secretary, or at such
other address as the Company may specify by written notice to Holder.
Such notices and other communications shall, for all purposes of this Agreement,
be treated as effective or having been given if delivered personally, or, if
sent by mail, when received.
(d) All representations, warranties and agreements contained herein shall
survive the execution and delivery of this Agreement.
(e) All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and, in particular, shall inure to the benefit of
and be enforceable by the holder or holders from time to time of any Series A
Shares; provided, however, that this Agreement shall not inure to the benefit
and shall not be enforceable by any successors and assigns of Holder who are not
holders of Series A Shares or who are not Holder-Related Persons.
(f) The headings of the Sections of this Agreement have been inserted for
convenience only and do not constitute a part of this Agreement.
(g) The laws of Minnesota shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties thereunder.
IN WITNESS WHEREOF, a duly authorized representative of the Company and the
Holder have executed this Agreement.
H.B. FULLER COMPANY
By /s/ Richard C. Baker
-----------------------------------
Its Vice President, General Counsel
& Secretary
-------------------------------
/s/ Elmer L. Andersen
-----------------------------------
Elmer L. Andersen
-43-
<PAGE>
Exhibit A
---------
H.B. FULLER COMPANY
____________
DESIGNATIONS
FOR
SERIES B PREFERRED STOCK
____________
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation (the "Board of Directors") by the Restated Articles of
Incorporation of the Corporation, the Board of Directors hereby establishes a
Series B Preferred Stock of the Corporation and hereby states the number of
shares, and fixes the powers, designations, preferences and relative,
participating, optional and other rights, and the qualifications, limitations
and restrictions thereof, of such series of shares as follows:
SERIES B PREFERRED STOCK
(a) The Series of Preferred Stock established hereby shall be designated
"Series B Preferred Stock" (the "Series B Preferred Stock"), and the number of
shares constituting the Series B Preferred Stock shall be forty-five thousand
nine hundred (45,900). The Series B Preferred Stock shall have a par value of
$6.6667 per share.
(b) The holders of Series B Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors, from funds legally available
therefor, cumulative cash dividends at the rate of $ $0.3333 per share per
annum, payable quarter-annually on dates to be determined by the Board of
Directors .
(c) So long as any of the Series B Preferred Stock remains outstanding, no
dividend shall be paid or declared, or any distribution be made on the Common
Stock of the Corporation, unless the amount of the dividends on the then
outstanding Series B Preferred Stock equal to $0.3333 per share per annum from
the date of issuance of said Series B Preferred Stock to the end of the current
dividend period shall be declared and paid, or declared and set apart for
payment on such Series A Preferred Stock.
(d) Subject to the foregoing, such dividends as may be determined by the
Board of Directors may be declared and paid on the Common Stock from the funds
legally available for the payment of dividends, and the Series B Preferred Stock
shall not be entitled to participate in any such dividends, whether payable in
cash, stock or otherwise.
(e) At the option of the Board of Directors, the Corporation may,
effective at the end of any quarter-annual dividend period, purchase the whole
or any part of the Series B Preferred Stock then outstanding, or may, when
authorized by affirmative vote of a majority of all the votes then represented
by the outstanding shares of the Corporation, redeem all, but not less than all,
of the outstanding Series B Preferred Stock upon thirty (30) days' notice duly
given by registered or certified mail to the holders of record of the shares of
Series B Preferred Stock. The redemption
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<PAGE>
price per share shall be the par value of each share together with all accrued
and unpaid dividends, such dividends to be accrued to the redemption date.
(f) Upon the liquidation, dissolution or winding up of the Corporation,
whether voluntary or unvoluntary, or upon any distribution of its capital other
than by redemption or purchase of Series B Preferred Stock, the holders of
Series B Preferred Stock shall first be paid $6.6667 per share together with all
unpaid cumulated dividends, whether or not earned or declared, and no more,
before any distribution or payment shall be made to the holders of the Common
Stock. The words "liquidation, dissolution or winding up" as used herein shall
not apply to or include transactions incident to a consolidation, merger or sale
of all or substantially all of the Corporation's assets.
(g) (i) Except as otherwise required by law or as otherwise provided in
Section (g)(ii) or (iii) below, all Series B Preferred Stock shall vote with the
Common Stock as a single class and for voting purposes shall be of equal rank,
except that each share of Common Stock shall have one (1) vote and each share of
Series B Preferred Stock shall have eighty (80) votes.
(ii) Notwithstanding Section (g)(i) above, following the occurrence
of a Distribution Date (as such term is defined in the Shareholder Rights
Agreement dated as of July 17, 1996 (the "Rights Agreement"), between the
Corporation and Norwest Bank Minnesota, National Association, as Rights Agent)
and upon the exercise of any Rights (as such term is defined in the Rights
Agreement) or the exchange of any Rights as provided in Section 24 of the Rights
Agreement (an "Exchange"), the voting power of each share of Series B Preferred
Stock held by a Related Party (as such term is defined in Section (g) (iii)
below) (a "Related Party Series B Share") shall be increased such that the
issuance of Common Stock upon exercise of a Right or an Exchange shall not
diminish the voting power of such Related Party Series B Share. Following
exercise of any Rights or an Exchange, the aggregate number of votes
attributable all Related Party Series B Shares shall be equal to (A) the Total
Unadjusted Series B Votes (as defined below) plus (B) (x) the total number of
shares of Common Stock (in addition to the total number of votes attributable to
all other securities of the Corporation) issued upon exercise of any Rights or
an Exchange multiplied by (y) a fraction equal to (aa) the Total Unadjusted
Series B Votes divided by (bb) the total number of shares of Common Stock
outstanding on the Distribution Date. As of any date, the number of votes per
share of Related Party Series B Shares shall be equal to (A) the aggregate
number of votes attributable to all outstanding Related Party Series B Shares
divided by (B) the total number of Related Party Series B Shares outstanding. As
used herein, the "Total Unadjusted Series B Votes" means the aggregate number of
votes attributable to all Related Party Series A Shares on the Distribution
Date.
(iii) Notwithstanding of this Section (g)(ii) or (iii) above, the
voting rights of any share of Series B Preferred Stock shall be reduced to one
(1) vote if and when said share shall not be owned beneficially by one or more
Related Parties and the voting rights of all of the Series B Preferred Stock
shall be reduced to one (1) vote per share if and when a majority of the Series
B Preferred Stock outstanding shall not be owned beneficially by one or more
members of the class consisting of:
(A) the original beneficial owners of the Series A Preferred
Stock;
<PAGE>
(B) the spouses of the original beneficial owners of the Series A
Preferred Stock;
(C) the children and more remote issue of the original beneficial
owners of the Series A Preferred Stock (including those sustaining
that relationship by reason of adoption) and their respective spouses,
and said voting rights, if so reduced, shall not again be increased. Series B
Preferred Stock held directly or indirectly by or for a person, including stock
held in an estate or trust (to the extent of such person's interest as
beneficiary of such estate or trust), shall be deemed to be owned beneficially
by such person. The members of the class described in clauses (A), (B) and (C)
above are collectively referred to herein as the "Related Parties."
(h) No holder of Series B Preferred Stock shall have any preemptive or
preferential right of subscription to any shares of the Corporation, or to any
obligations convertible into such shares.
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<PAGE>
Exhibit 99
[LOGO]
CONTACT: BILL BELKNAP
MEDIA RELATIONS
2400 Energy Park Drive (612) 481-3604
St. Paul, Minnesota 55108
RICHARD EDWARDS
INVESTOR RELATIONS
(612) 481-3650
- --------------------------------------------------------------------------------
NEWS FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
July 18, 1996
H.B. FULLER COMPANY ANNOUNCES REGULAR QUARTERLY CASH DIVIDEND,
APPROVAL OF STOCK REPURCHASE PROGRAM AND
ADOPTION OF SHAREHOLDER RIGHTS PLAN
ST. PAUL, MINN. -- H.B. Fuller Company (NASDAQ: FULL) announced today that
its Board of Directors has approved the company's regular quarterly cash
dividend, a stock repurchase program and a shareholder rights plan.
The board voted to approve the regular quarterly dividend of $0.165 per
share of common stock. The dividend is payable August 12, 1996, to shareholders
of record at the close of business on July 30, 1996.
The board also authorized a stock repurchase program under which up to
300,000 shares of H.B. Fuller Company common stock may be repurchased by the
company. Terms of the program allow the company to make such purchases from time
to time at prevailing prices in the open market, by block purchase or in private
transactions. The program may be discontinued at any time. The company has
approximately 14 million shares of common stock outstanding. The shares of
common stock repurchased will be available for compensation plans of the
company. Repurchases will be funded with internally generated funds or through
available lines of credit.
The board also adopted a shareholder rights plan to replace the company's
existing shareholder rights plan that will expire on July 30, 1996. Anthony L.
Andersen, chair of the H.B. Fuller board, explained, "Like the old plan, the new
shareholder rights plan is intended to preserve the long-term value of the
company for all of its
1
<PAGE>
7/18/96 H.B. Fuller -- continued
- --------------------------------
stakeholders. The plan is designed to protect stakeholders against partial
tender offers and other coercive tactics. It does not prevent a takeover, but
it should encourage anyone seeking to acquire the company to negotiate with the
board prior to attempting a takeover."
In connection with the adoption of the new shareholder rights plan, the
board authorized a new series of preferred stock that would be exchanged for
the company's existing Series A preferred stock if and when the rights issued
under the new shareholder rights plan become exercisable. Such an exchange is
intended to preserve the voting power of Elmer L. Andersen, who holds all of the
existing Series A preferred shares, in the event any rights are exercised.
H.B. Fuller Company is a worldwide manufacturer and marketer of adhesives,
sealants, coatings, paints and other specialty chemical products with 1995 sales
of $1.24 billion.
# # # #
2
