SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Bontex, Inc.
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(Exact name of registrant as specified in its charter)
Virginia 22-1427551
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(State of incorporation or organization) (IRS Employer Identification No.)
One Bontex Drive
Buena Vista, Virginia 24416-1500
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
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Reference is hereby made to the Form 8-A of Bontex, Inc. (the
"Registrant") filed with the Securities and Exchange Commission (the
"Commission") on January 12, 1998, which is hereby incorporated by reference
herein.
The Registrant executed an Amended and Restated Shareholder Protection
Rights Agreement (the "Rights Agreement") dated as of June 1, 1999 between the
Registrant and Registrar and Transfer Company as successor to Wachovia Bank,
N.A., as Rights Agent.
As more fully set forth in the Rights Agreement, Registrar and Transfer
Company, the Company's Rights Agent, is the successor Rights Agent, replacing
Wachovia Bank N.A. as the previous Rights Agent.
The Rights Agreement also amended Section 4.4 to require a successor
Rights Agent to be either registered as a Transfer Agent under the applicable
provisions of the Securities Exchange Act of 1934, as amended, and qualified to
act as a Transfer Agent under the rules of the New York Stock Exchange or to
have a combined capital and surplus of at least $50,000,000.
A copy of the Rights Agreement is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing does not purport to be complete
and is qualified in its entirety by reference to such exhibits thereto.
Item 2. Exhibits.
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Exhibit No. Description
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(1) Amended and Restated Shareholder Protection Rights
Agreement, dated as of June 1, 1999 between Bontex, Inc. and
Registrar and Transfer Company.
(2) Forms of Rights Certificate and of Election to Purchase,
included in Exhibit A to the Rights Agreement.
(3) Form of Articles of Amendment to the Articles of
Incorporation of Bontex, Inc., included in Exhibit B to the
Rights Agreement.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
BONTEX, INC.
s/James C. Kostelni
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James C. Kostelni
President
Date: October 7, 1999
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EXHIBIT INDEX
Exhibit No. Description
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(1) Amended and Restated Shareholder Protection Rights
Agreement, dated as of June 1, 1999 between Bontex,
Inc. and Registrar and Transfer Company.
(2) Forms of Rights Certificate and of Election to
Purchase, included in Exhibit A to the Rights
Agreement.
(3) Form of Articles of Amendment to the Articles of
Incorporation of Bontex, Inc., included in Exhibit B to
the Rights Agreement.
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Exhibit (1)
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AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
June 1, 1999
between
BONTEX, INC.
and
REGISTRAR AND TRANSFER COMPANY
as Rights Agent
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AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Sections Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions...............................................2
Article II
THE RIGHTS
Section 2.1 Summary of Rights.................................................9
Section 2.2 Legend on Common Stock Certificates..............................10
Section 2.3 Exercise of Rights; Separation of Rights.........................10
Section 2.4 Adjustments to Exercise Price; Number of Rights..................13
Section 2.5 Date on Which Exercise is Effective..............................15
Section 2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.....................................................16
Section 2.7 Registration, Registration of Transfer and Exchange..............16
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates........18
Section 2.9 Persons Deemed Owners............................................19
Section 2.10 Delivery and Cancellation of Certificates.......................19
Section 2.11 Agreement of Rights Holders.....................................20
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
Section 3.1 Flip-in..........................................................20
Section 3.2 Flip-over........................................................24
Article IV
THE RIGHTS AGENT
Section 4.1 General..........................................................25
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent........26
Section 4.3 Duties of Rights Agent...........................................27
Section 4.4 Change of Rights Agent...........................................30
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Article V
MISCELLANEOUS
Section 5.1 Redemption.......................................................31
Section 5.2 Expiration.......................................................32
Section 5.3 Issuance of New Rights Certificates..............................32
Section 5.4 Supplements and Amendments.......................................32
Section 5.5 Fractional Shares................................................33
Section 5.6 Rights of Action.................................................33
Section 5.7 Holder of Rights Not Deemed a Shareholder........................34
Section 5.8 Notice of Proposed Actions.......................................34
Section 5.9 Notices..........................................................35
Section 5.10 Suspension of Exercisability....................................36
Section 5.11 Costs of Enforcement............................................36
Section 5.12 Successors......................................................36
Section 5.13 Benefits of this Agreement......................................36
Section 5.14 Descriptive Headings............................................36
Section 5.15 Governing Law...................................................37
Section 5.16 Counterparts....................................................37
Section 5.17 Severability....................................................37
EXHIBITS
EXHIBIT A Form of Rights Certificate
EXHIBIT B Articles of Amendment to the Articles of Incorporation of Bontex, Inc.
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AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDER PROTECTION RIGHTS
AGREEMENT (this "Agreement"), dated as of June 1, 1999, between Bontex,
Inc., a Virginia corporation (the "Company"), and Registrar and Transfer
Company, as Successor Rights Agent (the "Rights Agent," which term shall include
any successor Rights Agent hereunder) amends and restates the Shareholder
Protection Rights Agreement dated September 30, 1997 between Bontex, Inc. and
Wachovia Bank, N.A., a national banking association, as the previous Rights
Agent.
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
October 15, 1997 (the "Record Time"), and (b) authorized the issuance of one
Right in respect of each share of Common Stock issued after the Record Time and
prior to the Separation Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Company (or, in certain cases, of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
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NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
Article I - Certain Definitions
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1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
20% or more of the outstanding shares of Common Stock; provided however, that
the term "Acquiring Person" shall not include (i) any Person who shall become
the Beneficial Owner of 20% or more of the outstanding shares of Common Stock
solely as a result of an acquisition by the Company of shares of Common Stock,
until such time thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock dividend or stock split) of any additional
shares of Common Stock; or (ii) any Grandfathered Stockholder.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such
Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have "Beneficial
Ownership" of, and to "Beneficially Own," any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner pursuant to Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement,
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arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided however, that a Person shall not be deemed the "Beneficial
Owner," or to have "Beneficial Ownership" of, or to "Beneficially Own," any
security (i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered security is accepted for payment or exchange,
(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such security pursuant
to a revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and regulations
under the Securities Exchange Act of 1934, except if such power (or the
arrangements relating thereto) is then reportable under Item 6 of Schedule 13D
under the Securities Exchange Act of 1934 (or any similar provision of a
comparable or successor report), (iii) solely because of the grant by the
Company to such Person, in connection with the execution of an agreement to
acquire the Company, of options to acquire such security or (iv) held for or
pursuant to the terms of any employee stock ownership or other employee benefit
plan of the Company or a majority-owned Subsidiary of the Company. For purposes
of this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the City of Lexington, Virginia, are generally
authorized or obligated by law or executive order to close.
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"Close of Business" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next succeeding
Business Day) at which the offices of the transfer agent for the Common Stock
(or, after the Separation Time, the offices of the Rights Agent) are closed to
the public.
"Common Stock" shall mean the shares of Common Stock, par value $.10 per
share, of the Company.
"Exchange Time" shall mean the time at which the right of the holders of
Rights to exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $9.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time, (ii)
the Redemption Time and (iii) the close of business on the tenth-year
anniversary of the date of issuance of the Rights.
"Flip-in Date" shall mean the tenth day after any Stock Acquisition Date
which is not the result of a Flip-over Transaction or Event or such earlier or
later date as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Flip-in Date that would otherwise have occurred.
"Flip-over Stock" of any Person shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or similar persons responsible for direction of the business and
affairs) of such other Person or, if such other Person
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is a Subsidiary of another Person, the Person or Persons which ultimately
controls such first-mentioned Person.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in which,
directly or indirectly, (A) the Company shall consolidate or merge with the
Acquiring Person or (B) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer) assets (i)
aggregating more than 50% of the assets (measured by either book value or fair
market value) or (ii) generating more than 50% of the operating income or cash
flow, of the Company and its Subsidiaries (taken as a whole) to any other Person
(other than the Company or one or more of its wholly owned Subsidiaries) or to
two or more such Persons which are affiliated or otherwise acting in concert,
(C) any Acquiring Person shall (i) obtain, with or without consideration, over
any period of 12 consecutive calendar months, any additional shares of any class
of capital stock of the Company or any of its Subsidiaries equal in the
aggregate to more than 1% of the outstanding shares of such class, or securities
exercisable or exchangeable for or convertible into more than 1% of the
outstanding shares of any class of capital stock of the Company or any of its
Subsidiaries (in each case other than as part of a pro rata distribution to all
holders of such stock or pursuant to the exercise of rights or warrants, or the
conversion or exchange of securities, issued pro rata in such a distribution),
(ii) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, to, from, or with, as the case may be, the Company or
any of its Subsidiaries, over any period of 12 consecutive calendar months,
assets (x) having an aggregate fair market value of more than $1,000,000 or (y)
on terms and conditions less favorable to the Company than the Company would be
able to obtain through arm's-length
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negotiations with an unaffiliated third party, (iii) receive any compensation
for services from the Company or any of its Subsidiaries, other than
compensation for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past practices, or (iv)
receive the benefit, directly or indirectly (except proportionately as a
shareholder), over any period of 12 consecutive calendar months, of any loans,
advances, guarantees, pledges, insurance, reinsurance or other financial
assistance or any tax credits or other tax advantage provided by the Company or
any of its Subsidiaries involving an aggregate principal amount in excess of
$500,000 or an aggregate cost or transfer of benefits from the Company or any of
its Subsidiaries in excess of $500,000 or, in any case, on terms and conditions
less favorable to the Company than the Company would be able to obtain through
arm's-length negotiations with a third party, or (D) as a result of any
reclassification of securities (including any reverse stock split), or
recapitalization, of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
(whether or not with or into or otherwise involving an Acquiring Person), the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Company or any of its Subsidiaries which is
directly or indirectly owned by any Acquiring Person is increased by more than
1%. For purposes of the foregoing description, the term "Acquiring Person" shall
include any Acquiring Person and its Affiliates and Associates (other than the
Company, a wholly owned Subsidiary of the Company or an employee stock ownership
or other employee benefit plan of the Company or a wholly owned Subsidiary of
the Company), counted together as a single Person.
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"Grandfathered Stockholder" shall mean at any time any of Dolores
Kostelni, James C. Kostelni, Patricia S. Tischio, the Estate of Marie G.
Surmonte (the "Estate"), or First Union National Bank in its capacity as an
executor of the Estate or of any trusts established under the Estate ("First
Union"), who are the Beneficial Owners of 684,007, 161,940, 675,607, 675,507 and
843,178 Shares of Common Stock, respectively, on the date of this Agreement;
provided, however, that any of Dolores Kostelni, James C. Kostelni, Patricia S.
Tischio, the Estate or First Union shall not be a Grandfathered Stockholder if
she, he or it, without the prior written approval of the Board of Directors of
the Company, makes an acquisition of or acquires shares of Company Common Stock
or other securities which increase by 5% or more the number of shares of Company
Common Stock Beneficially Owned by her, him or it on the date of this Agreement.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 45 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days not to be fully comparable with the closing price on
such date, each such closing price so used shall be appropriately adjusted in
order to make it fully comparable with the closing price on such date. The
closing price per share of any securities on any date shall be the last sale
price, regular way, or, in case no such sale takes place or is quoted on such
date, the average of the closing bid and asked prices, regular way, for each
share of such securities, in either case as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or such other system then
in use, or, if on any such date the securities are not quoted by any such
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organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the securities selected by the
Board of Directors of the Company; provided, however, that if on any such date
the securities are not traded in the over-the-counter market, the closing price
per share of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
"Preferred Stock" shall mean the series of Series B, Participating
Preferred Stock, par value $25 per share, of the Company created by Articles of
Amendment in substantially the form set forth in Exhibit B hereto appropriately
completed.
"Redemption Price" shall mean an amount (calculated to the nearest one
one-hundredth of a cent) equal to the Exercise Price, as in effect at the
Redemption Time, divided by 900 (i.e., initially $0.01).
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the earlier of (i)
the tenth day after the date on which any Person (other than the Company, a
majority-owned Subsidiary of the Company or an employee stock ownership or other
employee benefit plan of the Company or a majority-owned Subsidiary of the
Company) commences a tender or exchange offer which, if
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consummated, would result in such Person's becoming an Acquiring Person (or such
earlier or later date as the Board of Directors of the Company may from time to
time fix by resolution adopted prior to the Separation Time that would otherwise
have occurred) and (ii) the Flip-in Date; provided that, if the foregoing
results in the Separation Time being prior to the Record Time, the Separation
Time shall be the Record Time; and provided further that, if any tender or
exchange offer referred to in clause (i) of this definition is canceled,
terminated or otherwise withdrawn prior to the Separation Time, such offer shall
be deemed, for purposes of this definition, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) or by an Acquiring Person (by means
of filing a Schedule 13D under the Securities Exchange Act of 1934 (or any
comparable or successor report or schedule) or an amendment thereto) that an
Acquiring Person has become such.
"Subsidiary" of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a
majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a
Business Day.
Article II - The Rights
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2.1 Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a copy of a letter to shareholders summarizing the terms
of the Rights to each holder of record of Common Stock as of the Record Time, at
such holder's address as shown by the records of the Company.
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2.2 Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles
the holder hereof to certain Rights as set forth in a Rights
Agreement, dated as of September 30, 1997 (as such may be amended
from time to time, the "Rights Agreement"), between Bontex, Inc.
(the "Company") and Registrar and Transfer Company, as Rights
Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be redeemed,
may be exchanged for shares of Common Stock or other securities
or assets of the Company, may expire, may become void (if they
are "Beneficially Owned" by an "Acquiring Person" or an Affiliate
or Associate thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the foregoing) or may
be evidenced by separate certificates and may no longer be
evidenced by this certificate. The Company will mail or arrange
for the mailing of a copy of the Rights Agreement to the holder
of this certificate without charge within five days after the
receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time, to purchase, for the Exercise Price, one one-
hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
each (ii) Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter mailed to the record holder
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thereof pursuant to Section 2.1) and will be transferable only together with,
and will be transferred by a transfer (whether with or without such letter) of,
such associated share. Notwithstanding any other provision of this Agreement,
any Rights held by the Company or any of its Subsidiaries shall be void.
(c) After the Separation Time and prior to the Expiration Time,
the Rights (i) may be exercised and (ii) will be transferable independent of
Common Stock. Promptly following the Separation Time, the Rights Agent will mail
to each holder of record of Common Stock as of the Separation Time, at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate(a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to Section 5.10, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified check or money order payable to the order of
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the Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d) above, and
subject to Section 5.10, the Rights Agent will thereupon promptly (i) (A)
requisition from a transfer agent stock certificates for the number of shares
to be purchased (the Company hereby irrevocably authorizing its transfer agents
to comply with all such requisitions) and (B) if the Company elects pursuant to
Section 5.5 hereof not to issue certificates representing fractional shares,
requisition from the depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or requisition from the
Company the amount of cash to be paid in lieu of fractional shares in accordance
with Section 5.5 hereof and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order of the registered
holder of such Rights Certificate, registered (in the case of certificates or
depositary receipts) in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
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(g) The Company covenants and agrees that it will (i) cause to
be kept available until the Expiration Time out of its authorized and unissued
shares of capital stock a number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights; (ii) take
all such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(iii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iv) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the
event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the
Exercise Price in effect immediately prior to such adjustment divided by the
number of shares of
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Common Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in
Common Stock) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or binding
share exchange), or otherwise, the Company shall make such adjustments, if any,
in the Exercise Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the Company,
in its sole discretion, may deem to be appropriate
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under the circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent shall amend
this Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(d) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the securities so purchasable
which were expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in whose name
any certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such
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shares on, and such certificate shall be dated, the next succeeding Business Day
on which the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Executive
Officers, under its corporate seal reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof.
No Rights Certificate shall be valid for any purpose until manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After
the Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose
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of maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable times after
the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) below, the Company will execute,
and the Rights Agent will countersign and deliver, in the name of the holder or
the designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.
(b) All Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations of the Company,
and such Rights shall be entitled to the same benefits under this Agreement as
the Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
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(d) The Company shall not be required to register the transfer
or exchange of any Rights after the Rights have been redeemed under Section 5.1
hereof.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be
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at any time enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for redemption, registration of
transfer or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be promptly
canceled by the Rights Agent. The Company may at any time deliver to the Rights
Agent for cancellation any Rights Certificates previously countersigned and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly canceled
by the Rights Agent. No Rights Certificates shall be countersigned in lieu of or
in exchange for any Rights Certificates canceled as provided in this Section
2.10, except as expressly permitted by this Agreement. The Rights Agent shall
destroy all canceled Rights Certificates and deliver a certificate of
destruction to the Company.
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2.11 Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior
to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will under the
circumstances set forth in Section 3.1(b) become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
Article III - Adjustments to the Rights in the Event of Certain
Transactions
3.1 Flip-in. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, then, to the extent applicable law permits Rights
owned by certain Persons referred to in Section 3.1(b) hereof to become void
pursuant to the provisions thereof, the Company shall take
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such action as shall be necessary to ensure and provide that, except as provided
below, each Right shall constitute the right to purchase from the Company, upon
exercise thereof in accordance with the terms hereof (but subject to Section
5.10 hereof), that number of shares of Common Stock having an aggregate Market
Price on the Stock Acquisition Date equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally
in the event that on or after such Stock Acquisition Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, to the extent permitted by
applicable law, any Rights that are or were Beneficially Owned on or after the
Stock Acquisition Date by an Acquiring Person or an Affiliate or Associate
thereof or by any transferee, direct or indirect, of any of the foregoing shall
become void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any provision
of this Agreement. If any Rights Certificate is presented for assignment or
exercise and the Person presenting the same will not complete the certification
set forth at the end of the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of the Beneficial Owner
and its Affiliates and Associates (or former Beneficial Owners and their
Affiliates and Associates) as the Company shall reasonably request, then the
Company shall be entitled to conclusively deem the Beneficial Owner thereof to
be an Acquiring Person or an Affiliate or Associate thereof or a transferee of
any of the foregoing and accordingly will, to the extent permitted by applicable
law, deem the Rights evidenced thereby to be void and not transferable or
exercisable.
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(c) The Board of Directors of the Company may, at its option, at
any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, but only to the extent applicable law permits Rights owned by
certain Persons referred to in Section 3.1(b) hereof to become void pursuant to
the provisions thereof, elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted
in order to protect the interests of holders of Rights generally in the event
that after the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice in accordance with Section 5.9.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its
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option, may substitute therefor shares of Preferred Stock, at a ratio of one
one-hundredth of a share of Preferred Stock for each share of Common Stock so
issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of shareholders seeking approval to cause sufficient additional shares
to be authorized (provided that if such approval is not obtained the Company
will take the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent permitted
by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
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3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall
not enter into any agreement with an Acquiring Person with respect to,
consummate or permit to occur any Flip-over Transaction or Event unless and
until it shall have entered into a supplemental agreement with the Person
engaging in such Flip-over Transaction or Event (the "Flip-over Entity"), for
the benefit of the holders of the Rights, providing, that upon consummation or
occurrence of the Flip-over Transaction or Event (i) each Right shall thereafter
constitute the right to purchase from the Flip-over Entity, upon exercise
thereof in accordance with the terms hereof, that number of shares of Flip-over
Stock of the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments which would eliminate or otherwise diminish in any respect the
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benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
Article IV - The Rights Agent
4.1 General. (a) The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company 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.
(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
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate 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.
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4.2 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 is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will 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 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
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or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will 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 deems 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 a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Executive Officer and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
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(d) The Rights Agent will not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except
its countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1, or 3.2 hereof 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 after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
non-assessable.
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(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
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Executive Officer or the Secretary or any Assistant Secretary
or the Treasurer or any Assistant Treasurer of the Company, and to apply to
such persons for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any
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such act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section . If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of New York, New Jersey, Virginia, Delaware,
North Carolina or Pennsylvania, in good standing, having its principal office in
the State of New York, New Jersey, Virginia, Delaware, North Carolina or
Pennsylvania, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authorities and is registered as a Transfer
Agent in accordance
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with the applicable provisions of the Securities Exchange Act of 1934, as
amended, and is qualified to act as a Transfer Agent under the rules of the New
York Stock Exchange or which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent will 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 will 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 holders of the Rights. Failure to give any notice provided for in
this Section 4.4, 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.
Article V - Miscellaneous
--------- -------------
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further
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action and without any notice, the right to exercise the Rights will terminate
and each Right will thereafter represent only the right to receive the
Redemption Price in cash. Promptly after the Rights are redeemed, the Company
shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. No Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1(c) or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement.
5.4 Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) in any respect prior to the close of business on the
Flip-in Date (other than to change the Exercise Price, the Redemption Price or
the Expiration Time, except as contemplated elsewhere herein), (ii) to make any
changes following the close of business on the Flip-in Date which the Company
may deem necessary or desirable and which shall not materially adversely affect
the interests of the holders of Rights generally or (iii) in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be inconsistent with any other provisions herein or otherwise defective. The
Rights Agent will duly execute and deliver any supplement or
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amendment hereto requested by the Company which satisfies the terms of the
preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise of Rights, the Company
shall, in lieu thereof, (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that each
holder of a depositary receipt shall have all of the rights, privileges and
preferences to which he would be entitled as a beneficial owner of such
fractional share, or (b) pay to the registered holder of such Rights the same
fraction of the Market Price of one share of the stock issuable upon such
exercise on the day of exercise.
5.6 Rights of Action. Subject to the terms of this Agreement, rights
of action in respect of this Agreement, other than rights of action vested
solely in the Rights Agent, are vested in the respective holders of the Rights;
and any holder of any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own behalf and for such
holder's own benefit and the benefit of other holders of Rights, 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 such
holder's Rights in the manner provided in such holder's Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive
33
<PAGE>
relief against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
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 Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit (in cases where the Company's permission is required) occurrence of any
Flip-in Date or Flip-over Transaction or Event or (ii) 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 5.9
hereof, a notice of such proposed action, which shall specify the Flip-in Date
or the date on which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed
action.
34
<PAGE>
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Bontex, Inc.
One Bontex Drive
Buena Vista, VA 24416-1500
Attention: James C. Kostelni, President
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Registrar and Transfer Company
Attention: Vice President - Administration
10 Commerce Drive
Cranford, New Jersey 07016
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
35
<PAGE>
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action need be taken pursuant to Section
3.1(e) or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a period of up to ninety (90) days
following the date of the occurrence of the Separation Time or the Flip-in Date
in order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability of the Rights has been temporarily
suspended.
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
his rights pursuant to any Rights or this Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights 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 holders of the Rights.
5.14 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
36
<PAGE>
5.15 Governing Law. This Agreement and each Right issued hereunder
shall be deemed to be a contract made under the laws of the State of Virginia
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.
5.16 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.
5.17 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BONTEX, INC.
By s/James C. Kostelni
--------------------------
Its President and Chief Executive Officer
--------------------------------------
37
<PAGE>
REGISTRAR AND TRANSFER COMPANY
By s/William P. Tatler
--------------------------
William P. Tatler
Its Vice President
--------------------------
38
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- ________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
BONTEX, INC.
This certifies that ____________________________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement, dated
as of September 30, 1997 (as such may be amended from time to time, the "Rights
Agreement"), between Bontex, Inc., a Virginia corporation (the "Company"), and
Registrar and Transfer Company, as Rights Agent (the "Rights Agent," which term
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the close of business on October
15, 2007, one one-hundredth of a fully paid share of Series B, Participating
Preferred Stock, par value $25 per share (the "Preferred Stock"), of the Company
A-1
<PAGE>
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent in the City of Cranford, New Jersey. The Exercise
Price shall initially be $9.00 per Right and shall be subject to adjustment in
certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder
A-2
<PAGE>
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $0.01 per Right or exchanged by the
Company under certain circumstances at its option for one share of Common Stock
or one one-hundredth of a share of Preferred Stock per Right (or, in certain
cases, other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a 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 Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
A-3
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date:
--------------------
ATTEST: BONTEX, INC.
By
----------------------
- ---------------------------
Secretary
Countersigned:
- -------------------
By
--------------------------
Authorized Signature
A-4
<PAGE>
(Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
----------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
(Please print name and address of transferee)
- -------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to
---------------
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 19
------------ --
------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights 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 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, I [
]did [ ]did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 19
--------------- ---
------------------------
Signature
Signature Guaranteed:
A-5
<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: BONTEX INC.:
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
-----------------------------------------------------------------
Dated: , 19
-------------- ---
---------------------------
Signature
Signature Guaranteed:
A-7
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]are [ ]are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, I [
]did [ ]did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: , 19
-------------- ---
---------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-8
<PAGE>
EXHIBIT B
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
BONTEX, INC.
1. The name of the corporation is BONTEX, INC. (hereinafter
referred to as the "Corporation").
2. Pursuant to authority granted by Article 2 of the Articles of
Incorporation of the Corporation, as amended and restated, and in accordance
with the provisions of Section 13.1-639 of the Virginia Stock Corporation Act,
the Board of Directors of the Corporation has adopted the following amendment to
paragraph 2 of the corporation of the Articles of Incorporation of the
Corporation fixing the designation and certain powers, preferences, and other
rights of a new series of the Corporation's Preferred Stock, par value $25 per
share, and certain qualifications, limitations, and restrictions thereon:
There is hereby established a series of Preferred Stock, par
value $25 per share, of the Corporation, and the designation and certain
powers, preferences, and other rights of the shares of such series, and
certain qualifications, limitations, and restrictions thereon, are
hereby fixed as follows:
1. Designation. The distinctive serial designation of this series
shall be "Series B, Participating Preferred Stock," $25 par value
(hereinafter called "Series B Preferred Stock"). Each share of Series B
Preferred stock shall be identical in all respects with the other shares
of such series except as to the dates from and after which dividends
thereon shall be cumulative.
2. Number of Shares. The number of shares of Series B Preferred
Stock shall initially be ________,* which number may from time to time
be increased or decreased
- --------
*The number of shares to be determined at the time of filing the
Articles of Amendment with the State Corporation Commission such number
of shares equal to the then presently issued and outstanding shares of
Common Stock of the Corporation plus all shares issuable upon conversion
B-1
<PAGE>
(but not below the number then outstanding) by the Board of Directors.
Shares of Series B Preferred Stock purchased by the Corporation shall be
canceled and shall revert to authorized but unissued shares of Preferred
Stock undesignated as to series. Shares of Series B Preferred Stock may
be issued in fractional shares, which fractional shares shall entitle
the holder, in proportion to such holder's fractional shares, to all
rights of a holder of a whole share of Series B Preferred Stock.
3. Dividend Rights. The holders of full or fractional shares of
Series B Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors, but only out of funds legally
available therefor, dividends (A) on each date that dividends or other
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) are payable on or in respect of Common Stock
comprising part of the Reference Package (as defined below), in an
amount per whole share of Series B Preferred Stock equal to the
aggregate amount of dividends or other distributions (other than
dividends or distributions payable in Common Stock of the Corporation)
that would be payable on such date to a holder of the Reference Package,
and (B) on the last day of September, December, January and March in
each year, in an amount per whole share of Series B Preferred Stock
equal to the excess (if any) of $_____* over the aggregate dividends
paid per whole share or Series B Preferred Stock during the three-months
period ending on such last day. Each such dividend shall be paid to the
holders of record of shares of Series B Preferred Stock on the date, not
exceeding 70 days preceding such dividend or distribution payment date,
fixed for the purpose by the Board of Directors in advance of payment of
each particular dividend or distribution. Dividends on each full and
each fractional share of Series B Preferred Stock shall be cumulative
from the date such full or fractional share is originally issued;
provided that any such full or fractional share originally issued after
a dividend record date and on or prior to the dividend payment date to
which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect
of the period from such original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares of
Common Stock, par value $.10 per share ("Common Stock"), of the
Corporation. In the event the
- --------
of securities into such shares of Common Stock or upon the exercise of
options or other rights to acquire such Common Stock divided by 100.
[NOTE: The blank above would actually be completed (and this footnote
would be deleted) when Articles of Amendment are filed with the State
Corporation Commission.]
*Insert an amount equal to 1/4 of 1% of the Exercise Price divided by
the number of shares of Preferred Stock purchasable upon exercise of one
Right (i.e., a guaranteed 1% dividend).
B-2
<PAGE>
Corporation shall at any time after the close of business on __________
19_,* (A) declare or pay a dividend on any Common Stock payable in
Common Stock, (B) subdivide any Common Stock, or (C) combine any Common
Stock into a smaller number of shares, then and in each such case the
Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would
hold thereafter as a result thereof.
Holders of shares of Series B Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property, or stock,
in excess of full cumulative dividends, as herein provided on Series B
Preferred Stock.
So long as any shares of Series B Preferred Stock are
outstanding, no dividend (other than a dividend in Common Stock or in
any other stock ranking junior to Series B Preferred Stock as to
dividends and upon liquidation) shall be declared or paid or set aside
for payment or other distribution declared or made upon the Common Stock
or upon any other stock ranking junior to Series B Preferred Stock as to
dividends or upon liquidation, nor shall any Common Stock nor any other
stock of the Corporation ranking junior to or on a parity with Series B
Preferred Stock as to dividends or upon liquidation be redeemed,
purchased, or otherwise acquired for any consideration (or any moneys be
paid to or made available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation (except by conversion into
or exchange for stock of the Corporation ranking junior to Series B
Preferred Stock as to dividends and upon liquidation), unless, in each
case, the full cumulative dividends (including the dividend to be due
upon payment of such dividend, distribution, redemption, purchase, or
other acquisition) on all outstanding shares of Series B Preferred Stock
shall have been, or shall contemporaneously be, paid.
4. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional shares of
Series B Preferred Stock shall be entitled, before any distribution or
payment is made on any date to the holders of the Common Stock or any
other stock of the Corporation ranking junior to Series B Preferred
Stock upon liquidation, to be paid in full an amount per whole share of
Series B Preferred Stock equal to the greater of (A) $_______* or (B)
the aggregate amount distributed or to be
- --------
*For a certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights Agreement, insert the Separation
Time. For a certificate of designation relating to shares to be issued
pursuant to Section 3.1(d) of the Rights Agreement, insert the Flip-in
Date.
*Insert an amount equal to 100 times the Exercise Price, in effect
as of the Separation Time. [NOTE: The blank above would actually be
completed (and this footnote would be deleted) when Articles of
Amendment are filed after the Separation Time.]
B-3
<PAGE>
distributed prior to such date in connection with such liquidation,
dissolution, or winding up to a holder of the Reference Package (such
greater amount being hereinafter referred to as the "Liquidation
Preference"), together with accrued dividends to such distribution or
payment date, whether or not earned or declared. If such payment shall
have been made in full to all holders of shares of Series B Preferred
Stock the holders of shares of Series B Preferred Stock as such shall
have no right or claim to any of the remaining assets of the
Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of Series B Preferred Stock upon
any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to the first
paragraph of this section 4, no such distribution shall be made on
account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of Series B Preferred Stock upon
such liquidation, dissolution, or winding up unless proportionate
distributive amounts shall be paid on account of the shares of Series B
Preferred Stock ratably in proportion to the full distributable amounts
for which holders of all such parity shares are respectively entitled
upon such liquidation, dissolution, or winding up.
Upon the liquidation, dissolution, or winding up of the
Corporation, the holders of shares of Series B Preferred Stock then
outstanding shall be entitled to be paid out of assets of the
Corporation available for distribution to its shareholders all amounts
to which such holders are entitled pursuant to the first paragraph of
this section 4 before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon
liquidation to Series B Preferred Stock.
For the purposes of this section 4, the consolidation or merger
of the Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution, or winding up of the Corporation.
5. Redemption. The shares of Series B Preferred Stock shall not
be redeemable.
6. Conversion Rights. In the event of any merger, consolidation,
reclassification, or other transaction in which the shares of Common
Stock are to be exchanged for or changed into other stock or securities,
cash, and/or any other property, then in any such case the shares of
Series B Preferred Stock shall immediately prior to the effective time
of such merger, consolidation, reclassification, or other transaction be
converted into the same number of shares of Common Stock per whole share
of Series B Preferred Stock as are then contained in the Reference
Package. The Series B Preferred Stock shall have no other conversion
rights.
B-4
<PAGE>
7. Voting Rights. In addition to any other vote or consent of
shareholders required by law or by the Articles of Incorporation, as
amended, of the Corporation, each whole share of Series B Preferred
Stock shall, on any matter, vote as a class with any other capital stock
comprising part of the Reference Package and voting on such matter and
shall have the number of votes thereon that a holder of the Reference
Package would have.
8. No Sinking Fund. Shares of Series B Preferred Stock are not
subject to the operation of a sinking fund.
3. The foregoing amendment was adopted on ______________.
4. The amendment was duly adopted by the Board of Directors of the
Corporation.
The undersigned Chairman of the Board of the Corporation declares that
the facts herein stated are true as of ______________, 19__.
BONTEX, INC.
By
--------------------------
James C. Kostelni
Chairman of the Board
B-5
