SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 4, 1998
INGERSOLL-RAND COMPANY
(Exact name of registrant as specified in its charter)
New Jersey 1-985 13-5156640
(State of (Commission File Number) IRS Employer
Incorporation) Identification No.
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices) (Zip Code)
(201) 573-0123
(Registrant's telephone number)
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Item 5. Other Events.
On November 4, 1998, the Board of Directors of Ingersoll-
Rand Company (the "Company") declared a dividend of one right to purchase one
one-thousandth of a share of Series A Preference Stock (the "Rights") on each
outstanding share of Company common stock, $2.00 par value (the "Common
Stock"), to stockholders of record as of December 22, 1998.
The Rights are substantially similar to the preferred share
purchase rights issued by the Company in 1988 (which rights expire on
December 22, 1998), with the following material differences: (i) the
exercise price of the Rights has been increased to $200 to reflect the Board
of Directors' view of the long-term value of the Common Stock; (ii) the
"Adverse Person" provision which allowed the Board to lower the 15% Rights
trigger to beneficial ownership of 10% of the Company's outstanding common
shares in the event that the Board determined that an "adverse person" was
accumulating stock has been replaced with a broader amendment provision that
expressly allows the Board at any time to reduce the Rights trigger from 15%
to as low as 10%; and (iii) the "second-look" or "window" redemption
provision, permitting the Board of Directors to redeem the Rights after
someone has accumulated more than the triggering percentage, has been
replaced with a provision that permits the Board of Directors to redeem the
Rights at any time prior to a person accumulating more than the triggering
percentage.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any
of the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a summary of the Rights.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of the summary of Rights, will also coith the shares of Common Stock
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represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on December 22, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock wilidend payment
of $1 per share but will be entitled to an aggregate dividend of 1000 times
the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of Preferred Stock
will have 1000 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest
in a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
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In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right at the then current exercise price of the Right, that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
mber of shares of common stock of the person with whom the Company has
engaged in the foregoing transaction (or its parent), which number of shares
at the time of such transaction will have a market value of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event
described in the prior paragraph, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of Preferred Stock
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional shares of Preferred Stock will
be issued (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
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The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower the 15% threshold for an Acquiring Person
described above to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known to
the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be
redeemed by the Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or more of the
shares of Common Stock.
The Rights Agreement, dated as of November 9, 1998, between the
Company and The Bank of New York, as Rights Agent, specifying the terms of
the Rights is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified by reference
to such exhibit. Details of the Rights are contained in a summary, the form
of which is attached as Exhibit C to the Rights Agreement, which will be
mailed to the Company's stockholders of record as of December 22, 1998.
Item 7. Exhibits.
1. Rights Agreement, dated as of November 9, 1998, between the
Company and The Bank of New York which includes the form of
Certificate of Amendment to the Restated Certificate of
Incorporation for the Series A Preference Stock as Exhibit
A, the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as Exhibit C.
2. Press Release dated November 4, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
INGERSOLL-RAND COMPANY
(Registrant)
Dated: November 9, 1998 By /S/ Patricia Nachtigal
---------------------------------
Name: Patricia Nachtigal
Title: Vice President and General Counsel
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________________________________________________________________________
INGERSOLL-RAND COMPANY
and
THE BANK OF NEW YORK,
as Rights Agent
Rights Agreement
Dated as of November 9, 1998
________________________________________________________________________
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . 5
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8. Cancellation of Right Certificates . . . . . . . . . . 10
Section 9. Availability of Shares of Preferred Stock . . . . . . . 11
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price, Number of Shares and Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares
23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power . . . . . . . . . . . . . . . . . . . 23
Section 14. Fractional Rights and Fractional Shares . . . . . . . . 27
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . 29
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . 29
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . 30
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . 30
Section 19. Merger or Consolidation or Change of Name of Rights Agent
31
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . 32
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . 34
Section 22. Issuance of New Right Certificates . . . . . . . . . . 35
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Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . 36
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . 36
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . 38
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 27. Supplements and Amendments . . . . . . . . . . . . . . 39
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . 40
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . 40
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . 40
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . 41
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . 41
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . 41
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RIGHTS AGREEMENT
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Agreement, dated as of November 9, 1998, between Ingersoll-
Rand Company, a New Jersey corporation (the "Company"), and The Bank of
New York, a New York banking corporation (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for
each share of Common Stock (as hereinafter defined) of the Company
outstanding as of the close of business (as defined below) on December
22, 1998 (the "Record Date"), each Right representing the right to
purchase one one-thousandth (subject to adjustment) of a share of
Preferred Stock (as hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed
the issuance of one Right (subject to adjustment as provided herein) with
respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined); provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final
Expiration Date in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of
Common Stock then outstanding, but shall not include an Exempt
Person (as such term is hereinafter defined); provided, however,
that if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person"
has become such inadvertently (including, without limitation,
because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person
to be a "Acquiring Person" or (ii) such Person was aware of the
extent of its Beneficial Ownership of Common Stock but had no
actual knowledge of the consequences of such Beneficial Ownership
under this Rights Agreement) and without any intention of changing
or influencing control of the Company, and such Person, as promptly
as practicable divested or divests himself or itself of Beneficial
Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer be an Acquiring Person, then such
Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the
result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
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15% or more of the shares of Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and thereafter
become the Beneficial Owner of any additional shares of Common
Stock, then such Person shall be deemed to be an "Acquiring Person"
unless upon the consummation of the acquisition of such additional
shares of Common Stock such Person does not own 15% or more of the
shares of Common Stock then outstanding. The phrase "then
outstanding", when used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, directly or
indirectly within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect on
the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right
is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (x)
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase, (y) securities which such Person has a
right to acquire on the exercise of Rights at any time prior
to the time a Person becomes an Acquiring Person or (z)
securities issuable upon exercise of Rights from and after the
time a Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof ("original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to an
adjustment to original Rights; or (B) the right to vote
pursuant to any agreement, arrangement or understanding;
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provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security by
reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the
Company.
(d) "Business Day" shall mean any day other than a Saturday,
a Sunday, or a day on which banking institutions in the State of
New York, or the State in which the principal office of the Rights
Agent is located, are authorized or obligated by law or executive
order to close.
(e) "close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the common stock, presently par value $2.00 per share,
of the Company. "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock (or, in
the case of an unincorporated entity, the equivalent equity inter-
est) with the greatest voting power of such other Person or, if
such other Person is a subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary
of the Company, or (iv) any entity or trustee holding Common Stock
for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company.
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(i) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(j) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(k) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series A Preference
Stock, without par value, of the Company having the rights and
preferences set forth in the form of certificate of Amendment of
Restated Certificate of Incorporation attached to this Agreement as
Exhibit A.
(m) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(n) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(o) "Stock Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such or such earlier date as a
majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
(p) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the
board of directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and
any corporation or other entity that is otherwise controlled by
such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the
tenth business day (or such later date as may be determined by action of
the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than an Exempt Person) of, or of the first public announcement of the
intention of such Person (other than an Exempt Person) to commence, a
tender or exchange offer the consummation of which would result in any
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Person becoming the Beneficial Owner of shares of Common Stock
aggregating 15% or more of the Common Stock then outstanding (including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common
Stock registered in the names of the holders thereof and not by separate
Right Certificates and (y) the Rights will be transferable only in
connection with the transfer of Common Stock. The Company shall give the
Rights Agent prompt written notice of the Distribution Date. As soon as
practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send, at the
expense of the Company, by first-class, postage-prepaid mail) to
each record holder of Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on
the records of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto (a "Right Certificate"), evidencing one Right
(subject to adjustment as provided herein) for each share of Common Stock
so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Shares of
Preferred Stock, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each
record holder of Common Stock as of the close of business on the Record
Date (other than any Acquiring Person or any Associate or Affiliate of
any Acquiring Person), at the address of such holder shown on the records
of the Company. With respect to certificates for Common Stock out-
standing as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribu-
tion Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the Summary of
Rights, shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or reissuance of Common
Stock out of authorized but unissued shares) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date shall have impressed on, printed on, written on
or otherwise affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between Ingersoll-Rand Company and
The Bank of New York, dated as of November 9, 1998,
as the same may be amended from time to time (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which
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is on file at the principal executive offices of
Ingersoll-Rand Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Ingersoll-Rand Company will mail to
the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as
set forth in the Rights Agreement, Rights owned by
or transferred to any Person who becomes an
Acquiring Person (as defined in the Rights
Agreement) and certain transferees thereof will
become null and void and will no longer be
transferable.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate, except as
otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the
rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of the New York Stock
Exchange or of any other stock exchange or automated quotation system on
which the Rights may from time to time be listed, or to conform to usage.
The Right Certificates shall be in a machine printable format and in a
form reasonably satisfactory to the Rights Agent. The Right Certificates
shall show the date of countersignature and, subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-thousandths of a share
of Preferred Stock as shall be set forth therein at the price per one
one-thousandth of a share of Preferred Stock set forth therein (the
"Purchase Price"), but the number of such one one-thousandths of a share
of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
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Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by any one of the
Chairman or Vice Chairman of the Board of Directors, the President, any
of the Vice Presidents, the Treasurer or the Controller of the Company,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement any such Person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at an office or agency designated for such
purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evi-
denced on its face by each of the Right Certificates and the date of each
of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Sections 7(e), 11(a)(ii)
and 14 hereof, at any time after the close of business on the
Distribution Date, and prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a
share of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right Certifi-
cates to be transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall countersign and deliver to the Person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment by the holders of Rights of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at
any time after the Distribution Date and prior to the close of business
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on the earlier of the Redemption Date or the Final Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of indem-
nity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights. (a) Except as otherwise provided herein, the Rights
shall become exercisable on the Distribution Date, and thereafter the
registered holder of any Right Certificate may, subject to Section
11(a)(ii) hereof and except as otherwise provided herein, exercise the
Rights evidenced thereby in whole or in part upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office or agency of the
Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one one-thousandth of a share of Preferred Stock
as to which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the earliest of (i) the close of business
on December 22, 2008 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are exchanged
as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $200 for each one
one-thousandth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one one-
thousandths of a share of Preferred Stock or other securities or property
to be acquired upon exercise of a Right shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be
payable in lawful money of the United States of America in accordance
with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the
aggregate Purchase Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable transfer tax required to
be paid by the holder of such Right Certificate in accordance with
Section 9 hereof, in cash or by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Stock certificates for the number of shares of Preferred Stock
to be purchased (and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests), or (B) requisition from
the depositary agent depositary receipts representing interests in such
number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the
depositary agent) (and the Company hereby directs the depositary agent to
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comply with such request), (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly after receipt
of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than all
the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the exercisable Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Cer-
tificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon
the occurrence of any purported transfer or exercise of Rights pursuant
to Section 6 hereof or this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of
assignment or election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof as the Company shall reasonably
request.
Section 8. Cancellation of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and re-
tirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled
Right Certificates to the Company.
Section 9. Availability of Shares of Preferred Stock. (a)
The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred
Stock or any shares of Preferred Stock held in its treasury, the number
of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common
Stock and other securities) issuable upon the exercise of Rights may be
listed or admitted to trading on the New York Stock Exchange or listed on
any other national securities exchange or quotation system, the Company
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shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be
listed or admitted to trading on the New York Stock Exchange or listed on
any other exchange or quotation system upon official notice of issuance
upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then necessary to
permit the issuance of shares of Preferred Stock (and following the time
that a Person first becomes an Acquiring Person, shares of Common Stock
and other securities) upon the exercise of Rights, to register and
qualify such shares of Preferred Stock (and following the time that a
Person first becomes an Acquiring Person, shares of Common Stock and
other securities) under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to
become effective as soon as possible after such filing and keep such
registration and qualifications effective until the earlier of the date
as of which the Rights are no longer exercisable for such securities and
the Final Expiration Date. The Company may temporarily suspend, for a
period of time not to exceed 90 days, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities
Act and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement, in each case with simultaneous
written notice to the Rights Agent, stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have
been declared effective. The Rights Agent may assume that any Right
exercised is permitted to be exercised under applicable law and shall
have no liability for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred
Stock (and, following the time that a Person becomes an Acquiring Person,
shares of Common Stock and other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates therefor
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any shares of Preferred Stock (or shares of
Common Stock or other securities) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates
to a Person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Stock (or shares of Common Stock or
other securities) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for Preferred
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Stock (or shares of Common Stock or other securities) upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by that holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a
date upon which the Preferred Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends
or other distributions, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares
and Number of Rights. The Purchase Price, the number of shares of
Preferred Stock or other securities or property purchasable upon exercise
of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of Preferred Stock or
(D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
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Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer
books of the Company were open, the holder would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement and except
as otherwise provided in this Section 11(a)(ii), in the event
any Person becomes an Acquiring Person, each holder of a Right
shall thereafter have the right to receive, upon exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of Common
Stock (or at the option of the Company, such number of one
one-thousandths of shares of Preferred Stock) as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a share
of Preferred Stock for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share
market price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the occur-
rence of such event; provided, however, that the Purchase
Price and the number of shares of Common Stock so receivable
upon exercise of a Right shall thereafter be subject to
further adjustment as appropriate in accordance with Section
11(f) hereof. Notwithstanding anything in this Agreement to
the contrary, however, from and after the time (the
"invalidation time") when any Person first becomes an
Acquiring Person, any Rights that are beneficially owned by
(x) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee
after the invalidation time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (II) a
transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without
any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company
shall use all reasonable efforts to ensure that the provisions
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of this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person
as a result of its determination or its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and
after the invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become void pursuant
tograph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void
pursuant to the provisions of this paragraph shall be
canceled. From and after the occurrence of an event specified
in Section 13(a) hereof, any Rights that theretofore have not
been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13
and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate
current market value equal to the current per share market
price of a share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent
permitted by applicable law and any material agreements then
in effect to which the Company is a party (A) determine the
excess of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the "Current Value") over (2) the then
current Purchase Price multiplied by the number of one one-
thousandths of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring
Person became such (such excess, the "Spread"), and (B) with
respect to each Right (other than Rights which have become
void pursuant to Section 11(a)(ii)), make adequate provision
to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) shares of Preferred Stock
or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the Board of
Directors to have substantially the same value as the shares
of Common Stock (such shares of Preferred Stock and shares or
fractions of shares of preferred stock are hereinafter
referred to as "Common Stock equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any
combination of the foregoing, having a value which, when added
to the value of the shares of Common Stock actually issued
upon exercise of such Right, shall have an aggregate value
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equal to the Current Value (less the amount of any reduction
in the Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors; provided, however, if the
Company shall not make adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the date that the Acquiring Person became such (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a
party, upon the surrehout requiring payment of the Purchase
Price, shares of Common Stock (to the extent available), and
then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If, upon the date any Person
becomes an Acquiring Person, the Board of Directors shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set
forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
second and/or third sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii) hereof
and the last sentence of this Section 11(a)(iii) hereof, that
such action shall apply uniformly to all outstanding Rights
and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the shares
of Common Stock shall be the current per share market price
(as determined pursuant to Section 11(d)(i)) on the Section
11(a)(ithe per share or fractional value of any "Common Stock
equivalent" shall be deemed to equal the current per share
market price of the Common Stock. The Board of Directors of
the Company may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common
Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
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Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred
Stock (or shares having the same rights, privileges and preferences
as the Preferred Stock ("equivalent preferred shares")) or
securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent
preferred shares (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or equivalent
preferred shares) less than the then current per share market price
of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock and equivalent preferred shares outstanding on such
record date plus the number of shares of Preferred Stock and
equivalent preferred shares which the aggregate offering price of
the total number of shares of Preferred Stock and/or equivalent
preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock and
equivalent preferred shares outstanding on such record date plus
the number of additional shares of Preferred Stock and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. Shares of Preferred Stock
and equivalent preferred shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable
in Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Stock (determined
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pursuant to Section 11(d) hereof) on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of
Preferred Stock, and the denominator of which shall be such current
per share market price (determined pursuant to Section 11(d)
hereof) of the Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
(d) (i) Except as otherwise provided herein, for the purpose
of any computation hereunder, the "current per share market price"
of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the
event that the current per share market price of the Security is
determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into
such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported by the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted
to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system
then in use, or, if on any such date the Security is not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the Company.
The term "Trading Day" shall mean a day on which the principal
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national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Preferred
Stock is not publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the Preferred Stock
shall be conclusively deemed to be the current per share market
price of the Common Stock as determined pursuant to Section
11(d)(i) multiplied by one thousand (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof). If neither the Common Stock nor
the Preferred Stock is publicly traded, "current per share market
price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-
thousandth of a share of Preferred Stock or share of Common Stock
or other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the
Company other than the Preferred Stock, thereafter the Purchase
Price and the number of such other shares so receivable upon
exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Stock contained in
Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-thousandths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a
share of Preferred Stock (calculated to the nearest one ten-
thousandth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one one-thousandths of a share
covered by a Right immediately prior to such adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company may, as
promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if required
by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred
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Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-thousandths of
a share of Preferred Stock which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Preferred Stock or other shares of capital stock issuable upon
exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock or other such shares at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Stock and
other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred Stock,
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, issuance wholly for cash or
Preferred Stock or securities which by their terms are convertible
into or exchangeable for Preferred Stock, dividends on Preferred
Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to herein above in Section 11(b),
hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Stock payable
in Common Stock or (ii) effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise
than by payment of a dividend payable in Common Stock) into a
greater or lesser number of Common Stock, then in any such case,
the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter
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associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be
the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or
13 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Stock or the Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 hereof (if so required
under Section 25 hereof). The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained
and shall not be deemed to have knowledge of any such adjustment unless
and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power. (a) In the event, directly or indirectly, at
any time after any Person has become an Acquiring Person, (i) the Company
shall merge with and into any other Person, (ii) any Person shall
consolidate with the Company, or any Person shall merge with and into the
Company and the Company shall be the continuing or surviving corporation
of such merger and, in connection with such merger, all or part of the
Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person (other than the Company or one or more of its
wholly-owned Subsidiaries), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of record of a
Right (other than Rights which have become void pursuant to Section
11(a)(ii)) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by
the number of one one-thousandths of a share of Preferred Stock for which
a Right was exercisable (whether or not such Right was then exercisable)
immediately prior to the time that any Person first became an Acquiring
Person (each as subsequently adjusted thereafter pursuant to Sections
11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)), in accordance with the
terms of this Agreement and in lieu of Preferred Stock, such number of
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validly issued, fully paid and non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as defined herein) not subject to
any liens, encumbrances, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the time that any Person first became an Acquiring Person (as
subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m)) and (2) dividing that product by 50% of
the then current per share market price of the Common Stock of such
Principal Party (determined pursuant to Section 11(d)(i) hereof) on the
date of consummation of such consolidation, merger, sale or transfer;
provided, that the Purchase Price and the number of shares of Common
Stock of such Principal Party issuable upon exercise of each Right shall
be further adjusted as provided in Section 11(f) of this Agreement to
reflect any events occurring in respect of such Principal Party after the
date of such consolidation, merger, sale or transfer; (B) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such consummation of
any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided, that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or
other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise
of a Right and payment of the Purchase Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time
of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a),
and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(i) or (ii) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which the shares
of Common Stock are converted in such merger or consolidation, or,
if there is more than one such issuer, the issuer the shares of
Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the
Person that is the other party to the merger, if such Person
survives said merger, or, if there is more than one such Person,
the Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger,
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the Person that does survive the merger (including the Company if
it survives) or (z) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in clause
(iii) of the first sentence in Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets
or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be
determined, whichever of such Persons as is the issuer of Common
Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing
clause (b)(i) or (b)(ii), (1) if the Common Stock of such Person is not
at such time or has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and if such
Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, the term "Principal Party"
shall refer to such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stock of all
of which is and has been so registered, the term "Principal Party" shall
refer to whichever of such Persons is the issuer of Common Stock having
the greatest aggregate market value of shares outstanding, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person
owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that
the requirements of Sections 13(a) and (b) hereof shall promptly be
performed in accordance with their terms and that such consolidation,
merger, sale or transfer of assets shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed
by the Principal Party pursuant to Sections 13(a) and (b) hereof and
providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
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meeting the requirements of the Securities Act) until the earlier
of the close of business on the Redemption Date or the Final
Expiration Date, and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New
York Stock Exchange or on another national securities exchange, to
list or admit to trading (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on the
New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted
to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon
exercise of the Rights to be reported by such other system then in
use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its certificate of incorporation or by-laws
or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue (other
than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred
to in this Section 13, shares of Common Stock of such Principal Party at
less than the then current market price per share thereof (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such
then current market price, or (ii) providing for any special payment, tax
or similar provision in connection with the issuance of the Common Stock
of such Principal Party pursuant to the provisions of Section 13, then,
in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or
amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at
any time after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by clauses (i), (ii) or (iii) of
Section 13(a) hereof if (x) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any
rights, warrants or other instruments or securities outstanding or
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agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (y) prior
to, simultaneously with or immediately after such consolidation, merger,
sale, transfer of other son who constitutes, or would constitute, the
Principal Party for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
(f) In no event shall the Rights Agent have any liability in
respect of any such Principal Party transactions, including, without
limitation, the property thereof. The Rights Agent may rely and be fully
protected in relying upon a certificate of the Company stating that the
provisions of this Section 13 have been fulfilled. Notwithstanding
anything in this Agreement to the contrary, the prior written consent of
the Rights Agent must be obtained in connection with any supplemental
agreement which alters the rights or duties of the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). Interests in fractions of
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Preferred Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced by de-
positary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, that such agreement
shall provide that the holders of such depositary receipts shall have all
the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-thousandth of a share of Preferred Stock,
the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share of
Preferred Stock. For the purposes of this Section 14(b), the current
market value of a share of Preferred Stock shall be the closing price of
a share of Preferred Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), on his own behalf and for his own benefit,
may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate
(or, prior to the Distribution Date, such Common Stock) in the manner
provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated
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for such purpose, duly endorsed or accompanied by a proper
instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a 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 this
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent such compensation as shall be agreed to
in writing between the Company and the Rights Agent 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 gross
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 (whether
asserted by the Company, a holder of a Right or any other Person)
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including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The provisions of
this Section 18(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by
it in connection with, its administration of this Agreement in reliance
upon any Right Certificate or certificate for the Preferred Stock or
Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, let-
ter, notice, instruction, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed and
executed by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name and in
all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this
Agreement, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opin-
ion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by any one of the Chairman
of the Board of Directors, the President, any Vice President, the
Treasurer, the Controller or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith
or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence
of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right
Certificates after the Rights Agent's actual receipt of a
certificate furnished pursuant to Section 12, describing such
change or adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to
be issued pursuant to this Agreement or any Right Certificate or as
to whether any shares of Preferred Stock or other securities will,
when issued, be validly authorized and issued, fully paid and
nonassessable, nor shall the Rights Agent be responsible for the
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legality of the terms hereof in its capacity as an administrative
agent.
(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 reasonably believed by the Rights Agent
to be one of the Chairman of the Board of Directors, the President,
the Chief Financial Officer or the Secretary of the Company, and to
apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance
with a proposal included in any such application on or after the
date specified in such application (which date shall not be less
than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the action
to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in
the selection thereof.
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(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has
not been completed to certify the holder is not an Acquiring Person
(or an Affiliate or Associate thereof), a Rights Agent shall not
take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonable assured to it.
(l) The Company agrees to give the Rights Agent prompt
written notice, as soon as reasonably practicable, of any event or
ownership which would prohibit the exercise or transfer of the
Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock or Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the Rights Agent
or registered holder of any Right Certificate may, at the reasonable
expense of the Company, apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United
States or any State thereof, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsi-
bilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the effective date
of any such appointment the Company shall file notice thereof in writing
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with the predecessor Rights Agent and each transfer agent of the Common
Stock or Preferred Stock, and, following the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such forms as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the
issuance or sale of Common Stock following the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration
Date, the Company may with respect to shares of Common Stock so issued or
sold pursuant to (i) the exercise of stock options, (ii) under any
employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities notes or debentures issued by the Company or (iv)
a contractual obligation of the Company in each case existing prior to
the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at any time prior to such time as any Person first becomes
an Acquiring Person, redeem all but not less than all the then out-
standing Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may
establish. The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the current market price of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 (or at such later time as the Board of Directors may establish
for the effectiveness of such redemption), and without any further action
and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public
notice (with simultaneous written notice to the Rights Agent) of any such
redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors
may establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then out-
standing Rights at their last addresses as they appear upon the registry
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books of the Rights Agent or, prior to the Distribution Date, 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. Each such notice of
redemption shall state the method by which the payment of the Redemption
Price will be made.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person first
becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become
void pursuant to the provisions of Section 11(a)(ii) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof and subject to
adjustment as set forth in clause (c) below (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after (1) any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding or (2) the occurrence of an event
specified in Section 13(a) hereof.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a)
of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice (with simultaneous written notice to the Rights Agent) of
any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange.
The Company shall promptly mail a notice of any such exchange to all of
the holders of the Rights so exchanged at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for
Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company may, in its discretion, take such action as may
be necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights. In the event that the Company shall
determine not to take such action or shall, after good faith effort, be
unable to take such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, to the
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extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fractions thereof (or equivalent preferred shares as
such term is defined in Section 11(b)) having an aggregate current per
share market price (determined pursuant to Section 11(d) hereof) equal to
the current per share market price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of issuance
of such shares of Preferred Stock or fractions thereof (or equivalent
preferred shares).
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this paragraph (d), the current market value of a whole share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
Section 25. Notice of Certain Events. (a) In case the
Company shall at any time after the earlier of the Distribution Date or
the Stock Acquisition Date propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Stock or to make any
other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the Company, or (v)
to declare or pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company shall
give to each holder of a Right Certificate and to the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which
such liquidation, dissolution or winding up is to take place and the date
of participation therein by the holders of the Common Stock and/or
Preferred Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of
the Common Stock and/or Preferred Stock, whichever shall be the earlier.
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(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate and to the Rights
Agent (or if occurring prior to the Distribution Date, the holders of the
Common Stock) in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The Bank of New York
21 West Street
New York, New York 10286
Attention: Equity Tender and Exchange Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. Except as otherwise
provided in this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer
redeemable, except as otherwise provided in this Section 27, the Company
may, and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights
Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable; provided, that no such supplement or amendment shall adversely
affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person),
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and no such amendment may cause the rights again to become redeemable or
cause the Agreement again to become amendable other than in accordance
with this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the 15% thresholds set
forth in Sections 1(a) and 3(a) to not less than the greater of (i) the
sum of .001% and the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any Person (other
than any Exempt Person) and (ii) 10%. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section,
the Rights Agent shall execute such supplement or amendment.
Notwithstanding any other provision hereof, the Rights Agent's consent
must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement or applicable to this Agreement is held
by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New Jersey 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 (without regard to any principles of conflicts of law of such
State), provided, however, that the rights and obligations of the Rights
Agent shall be governed by and construed in accordance with the laws of
the State of New York (without regard to any principles of conflicts of
law of such State).
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
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Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above
written.
INGERSOLL-RAND COMPANY
By /s/Patricia Nachtigal
--------------------------------
Name: Patricia Nachtigal
Title: Vice President General Counsel
THE BANK OF NEW YORK,
as Rights Agent
By /s/Jeffrey Grosse
--------------------------------
Name: Jeffrey Grosse
Title: Vice President
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Exhibit A
FORM
OF
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
INGERSOLL-RAND COMPANY
___________________
Pursuant to the provisions of Section 14A:7-2(2) of the New
Jersey Business Corporation Act ("NJBCA"), the undersigned Corporation
executes the following Certificate of Amendment to its Restated Certificate
of Incorporation.
1. The name of the Corporation (hereinafter called the
"Corporation") is "Ingersoll-Rand Company".
2. The following resolution has been adopted by the
Board of Directors of the Corporation (hereinafter called the "Board
of Directors"), as required by Subsection 14A:7-2(3) of the NJBCA.
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Corporation in accordance
with the provisions of the Restated Certificate of Incorporation, the
Board of Directors hereby amends and restates in their entirety the
designation and number, relative rights, preferences and limitation
of the Series A Preference Stock of the Corporation as follows:
(1) Designation and Amount. The shares of such series
shall be designated as "Series A Preference Stock"
(hereinafter referred to as "Series A Preference
Stock") and the number of shares constituting the
Series A Preference Stock shall be 600,000. Such
number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of
Series A Preference Stock to a number less than the
number of shares then outstanding plus the number of
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shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by
the Corporation convertible into Series A Preference
Stock.
(2) Dividends and Distributions.
(a) Subject to the rights of the holders of any
shares of any series of Preferred Stock of
the Corporation (the "Preferred Stock") (or
any similar stock) ranking prior and
superior to the Series A Preference Stock
with respect to dividends, the holders of
shares of Series A Preference Stock, in
preference to the holders of Common Stock,
par value $2.00 per share of the
Corporation (the "Common Stock"), and of
any other stock of the Corporation ranking
junior to the Series A Preference Stock,
shall be entitled to receive, when, as and
if declared by the Board of Directors out
of funds legally available for the purpose,
quarterly dividends payable in cash on the
fifteenth day of January, April, July, and
October in each year (each such date being
referred to herein as a "Dividend Payment
Date"), commencing on the first Dividend
Payment Date after the first issuance of a
share or fraction of a share of Series A
Preference Stock, in an amount per share
(rounded to the nearest cent) equal to the
greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set
forth, 1000 times the aggregate per share
amount of all cash dividends, and 1000
times the aggregate per share amount
(payable in kind) of all non-cash dividends
or other distributions other than a
dividend payable in shares of Common Stock,
declared on the Common Stock since the im-
mediately preceding Dividend Payment Date
or, with respect to the first Dividend
Payment Date, since the first issuance of
any share or fraction of a share of Series
A Preference Stock. In the event the
Corporation shall at any time after
December 22, 1998, declare or pay any
dividend on the Common Stock payable in
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shares of Common Stock, or effect a
subdivision or combination or consolidation
of the outstanding shares of Common Stock
(by reclassification or otherwise than by
payment of a dividend in shares of Common
Stock) into a greater or lesser number of
shares of Common Stock, then in each such
case the amount to which holders of shares
of Series A Preference Stock were entitled
immediately prior to such event under
clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a
fraction, the numerator of which is the
number of shares of Common Stock
outstanding immediately after such event
and the denominator of which is the number
of shares of Common Stock that were
outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preference
Stock as provided in paragraph (A) of this
Section immediately after it declares a
dividend or distribution on the Common
Stock (other than a dividend payable in
shares of Common Stock); provided that, in
the event no dividend or distribution shall
have been declared on the Common Stock
during the period between any Dividend
Payment Date and the next subsequent
Dividend Payment Date, a dividend of $1 per
share on the Series A Preference Stock
shall nevertheless be payable, when, as and
if declared, on such subsequent Dividend
Payment Date.
(c) Dividends shall begin to accrue and be
cumulative, whether or not earned or
declared, on outstanding shares of Series A
Preference Stock from the Dividend Payment
Date next preceding the date of issue of
such shares, unless the date of issue of
such shares is prior to the record date for
the first Dividend Payment Date, in which
case dividends on such shares shall begin
to accrue from the date of issue of such
shares, or unless the date of issue is a
Dividend Payment Date or is a date after
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the record date for the determination of
holders of shares of Series A Preference
Stock entitled to receive a quarterly
dividend and before such Dividend Payment
Date, in either of which events such
dividends shall begin to accrue and be
cumulative from such Dividend Payment Date.
Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of
Series A Preference Stock in an amount less
than the total amount of such dividends at
the time accrued and payable on such shares
shall be allocated pro rata on a
share-by-share basis among all such shares
at the time outstanding. The Board of
Directors may fix a record date for the
determination of holders of shares of
Series A Preference Stock entitled to
receive payment of a dividend or
distribution declared thereon, which record
date shall be not more than 60 days prior
to the date fixed for the payment thereof.
(3) Voting Rights. The holders of shares of Series A
Preference Stock shall have the following voting
rights;
(a) Subject to the provision for adjustment
hereinafter set forth and except as
otherwise provided in the Restated
Certificate of Incorporation or required by
law, each share of Series A Preference
Stock shall entitle the holder thereof to
1000 votes on all matters upon which the
holders of the Common Stock of the
Corporation are entitled to vote. In the
event the Corporation shall at any time
after December 22, 1998, declare or pay any
dividend on the Common Stock payable in
shares of Common Stock, or effect a
subdivision or combination or consolidation
of the outstanding shares of Common Stock
(by reclassification or otherwise than by
payment of a dividend in shares of Common
Stock) into a greater or lesser number of
shares of Common Stock, then in each such
case the number of votes per share to which
holders of shares of Series A Preference
Stock were entitled immediately prior to
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such event shall be adjusted by multiplying
such number by a fraction, the numerator of
which is the number of shares of Common
Stock outstanding immediately after such
event and the denominator of which is the
number of shares of Common Stock that were
outstanding immediately prior to such
event.
(b) Except as otherwise provided herein, in the
Restated Certificate of Incorporation or in
any other Amendment creating a series of
Preferred Stock or any similar stock, and
except as otherwise required by law, the
holders of shares of Series A Preference
Stock and the holders of shares of Common
Stock and any other capital stock of the
Corporation having general voting rights
shall vote together as one class on all
matters submitted to a vote of shareholders
of the Corporation.
(c) Except as set forth herein, or as otherwise
provided by law, holders of Series A
Preference Stock shall have no special
voting rights and their consent shall not
be required (except to the extent they are
entitled to vote with holders of Common
Stock as set forth herein) for taking any
corporate action.
(4) Certain Restrictions.
(a) Whenever quarterly dividends or other divi-
dends or distributions payable on the
Series A Preference Stock as provided in
Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and
distributions, whether or not earned or
declared, on shares of Series A Preference
Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends,
or make any other distributions, on any
shares of stock ranking junior (as to
dividends) to the Series A Preference
Stock;
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<PAGE>
(ii) declare or pay dividends,
or make any other distributions, on any
shares of stock ranking on a parity (as to
dividends) with the Series A Preference
Stock, except dividends paid ratably on
the Series A Preference Stock and all such
parity stock on which dividends are payable
or in arrears in proportion to the total
amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or
otherwise acquire for consideration shares
of any stock ranking junior (either as to
dividends or upon liquidation, dissolution
or winding up) to the Series A Preference
Stock, provided that the Corporation may at
any time redeem, purchase or otherwise
acquire shares of any such junior stock in
exchange for shares of any stock of the
Corporation ranking junior (as to dividends
and upon dissolution, liquidation or
winding up) to the Series A Preference
Stock or rights, warrants or options to
acquire such junior stock;
(iv) redeem or purchase or
otherwise acquire for consideration any
shares of Series A Preference Stock, or any
shares of stock ranking on a parity (either
as to dividends or upon liquidation, dis-
solution or winding up) with the Series A
Preference Stock, except in accordance with
a purchase offer made in writing or by
publication (as determined by the Board of
Directors) to all holders of such shares
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<PAGE>
upon such terms as the Board of Directors,
after consideration of the respective
annual dividend rates and other relative
rights and preferences of the respective
series and classes, shall determine in good
faith will result in fair and equitable
treatment among the respective series or
classes.
(b) The Corporation shall not permit any
subsidiary of the Corporation to purchase
or otherwise acquire for consideration any
shares of stock of the Corporation unless
the Corporation could, under paragraph (A)
of this Section 4, purchase or otherwise
acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any shares of Series A
Preference Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition
thereof.
(6) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (A) to
the holders of the Common Stock or of shares of any
other stock of the Corporation ranking junior, upon
liquidation, dissolution or winding up, to the
Series A Preference Stock unless, prior thereto, the
holders of shares of Series A Preference Stock shall
have received $100 per share, plus an amount equal
to accrued and unpaid dividends and distributions
thereon, whether or not earned or declared, to the
date of such payment, provided that the holders of
shares of Series A Preference Stock shall be
entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter
set forth, equal to 1000 times the aggregate amount
to be distributed per share to holders of shares of
Common Stock, or (B) to the holders of shares of
stock ranking on a parity upon liquidation,
dissolution or winding up with the Series A
Preference Stock, except distributions made ratably
on the Series A Preference Stock and all such parity
stock in proportion to the total amounts to which
the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the
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<PAGE>
event the Corporation shall at any time after
December 22, 1998 declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders
of shares of Series A Preference Stock were entitled
immediately prior to such event under the proviso in
clause (A) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number of
shares of Common Stock that were outstanding
immediately prior to such event.
(7) Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger,
combination or other transaction in which the shares
of Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or
any other property, then in any such case each share
of Series A Preference Stock shall at the same time
be similarly converted into, exchanged for or
changed into an amount per share (subject to the
provision for adjustment hereinafter set forth)
equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable
in kind), as the case may be, into which or for
which each share of Common Stock is converted,
exchanged or converted. In the event the
Corporation shall at any time after December 22,
1998 declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or
change of shares of Series A Preference Stock shall
be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after
such event and the denominator of which is the
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<PAGE>
number of shares of Common Stock that were
outstanding immediately prior to such event.
(8) No Redemption. The shares of Series A Preference
Stock shall not be redeemable from any holder.
(9) Rank. The Series A Preference Stock shall rank,
with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution
or winding up of the Corporation, junior to all
other series of Preferred Stock and senior to the
Common Stock.
(10) Amendment. If any proposed amendment to the
Restated Certificate of Incorporation would alter,
change or repeal any of the preferences, powers or
special rights given to the Series A Preference
Stock so as to affect the Series A Preference Stock
adversely, then the holders of the Series A
Preference Stock shall be entitled to vote
separately as a class upon such amendment, and the
affirmative vote of two-thirds of the outstanding
shares of the Series A Preference Stock, voting
separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as
may be required by the New Jersey Business
Corporation Act.
3. The resolution was adopted by the Board of Directors
at a meeting duly called and held on November 4, 1998, at which a
quorum was present.
4. The Restated Certificate of Incorporation of the
Corporation is amended so that the designation and number of shares
of the class and series acted upon in the resolution, and the
relative rights, preferences and limitations of each such class and
series are as stated in the resolution.
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IN WITNESS WHEREOF, the undersigned have executed and
subscribed this Certificate of Amendment of the Restated Certificate of
Incorporation of the Corporation this __ day of November, 1998.
INGERSOLL-RAND COMPANY
By:___________________________
Name:
Title:
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Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On November 4, 1998, the Board of Directors of Ingersoll-Rand
Company (the "Company") declared a dividend of one preference share purchase
right (a "Right") for each outstanding share of Common Stock, par value
$2.00 per share, of the Company (the "Common Stock"). The dividend is payable
on December 22, 1998 (the "Record Date") to the shareholders of record on that
date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Preference Stock, without par value
(the "Preferred Stock"), of the Company at a price of $200 per one one-
thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement dated as of November 9, 1998, as the same may be amended
from time to time (the "Rights Agreement"), between the Company and The Bank
of New York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding
shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
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<PAGE>
mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 22, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 1000 times
the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of Preferred Stock
will have 1000 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate
the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become
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<PAGE>
void), will thereafter have the right to receive upon exercise of a Right at
the then current exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right (other
than Rights beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower the 15% threshold for an Acquiring Person described above
to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding shares of Common Stock then known to the
Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
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person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be
redeemed by the Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or more of the
shares of Common Stock.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated November , 1998. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is
hereby incorporated herein by reference.
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On November 4, 1998, the Board of Directors of Ingersoll-Rand
Company (the "Company") declared a dividend of one preference share purchase
right (a "Right") for each outstanding share of Common Stock, par value
$2.00 per share, of the Company (the "Common Stock"). The dividend is payable
on December 22, 1998 (the "Record Date") to the shareholders of record on that
date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Preference Stock, without par value
(the "Preferred Stock"), of the Company at a price of $200 per one one-
thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement dated as of November 9, 1998, as the same may be amended
from time to time (the "Rights Agreement"), between the Company and The Bank
of New York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding
shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
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mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 22, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 1000 times
the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of Preferred Stock
will have 1000 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate
the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become
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void), will thereafter have the right to receive upon exercise of a Right at
the then current exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right (other
than Rights beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower the 15% threshold for an Acquiring Person described above
to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding shares of Common Stock then known to the
Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
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person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be
redeemed by the Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or more of the
shares of Common Stock.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated November , 1998. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is
hereby incorporated herein by reference.
Paul Dickard
(201) 573-3120
Richard Johnson
(201) 573-3087
Ingersoll-Rand Adopts Shareholder Rights Plan
Woodcliff Lake, N.J., November 4, 1998--Ingersoll-Rand today
announced that its board of directors has adopted a new shareholder
rights plan to replace its current rights plan, which will expire on
December 22, 1998.
Under the new plan, one right will be distributed for each
share of Ingersoll-Rand common stock outstanding at the close of business
on December 22, 1998.
Initially, the rights are attached to the common stock and are
not exercisable. The rights become exercisable and will trade separately
from the common stock 10 days following the first public announcement
that any person or group has acquired at least 15 percent of Ingersoll-
Rand's outstanding common stock, or on the 10th day following the
commencement or the announcement of an intention to commence a tender
offer, which would result in that person or group acquiring beneficial
ownership of at least 15 percent of the outstanding shares of common
stock. Each right would entitle the holder to purchase one-thousandth of
a share of Series A Preference Stock at an exercise price of $200.
If any person or group acquires 15 percent or more of
Ingersoll-Rand's common stock, the rights not held by the 15-percent
stockholder would become exercisable to purchase Ingersoll-Rand common
stock at a 50-percent discount. The plan provides that, at any time
after a person or group becomes an acquiring person and prior to the
acquisition by that person or group of 50 percent or more of the
outstanding common stock, the board may exchange the rights (other than
the rights held by the acquiring person, which will have become void), at
an exchange ratio or one share of common stock per right.
The new rights will expire on December 22, 2008, unless
earlier redeemed or exchanged by Ingersoll-Rand, as provided in the
rights plan. The board may elect to redeem the rights at $0.01 per
right.
The rights plan was not adopted in response to any specific
effort to acquire control of Ingersoll-Rand, nor is the company aware of
any such effort.
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