FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE Act of 1934
Kansas City Southern Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 44-0663509
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
114 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None.
<PAGE>
This Form 8-A constitutes amendment number 1 to the Form 8-A
filed by the Registrant on May 19, 1986. The Rights (as defined
therein) were redeemed by the Registrant and the related rights
agreement was terminated. This amendment reflects the Registrant's
adoption of a new rights agreement.
Item 1. Description of Registrant's Securities to be Registered.
On September 19, 1995, the Board of Directors of Kansas City
Southern Industries, Inc., a Delaware corporation (the "Company"),
declared a dividend distribution of one Right for each outstanding
share of the Company's Common Stock, $0.01 par value per share (the
"Common Stock"), to the stockholders of record on October 12, 1995
(the "Record Date"). Each right entitles the registered holder to
purchase from the Company one-thousandth of a share of Series A
Preferred Stock (the "Preferred Stock"), or in some circumstances,
Common Stock, other securities, cash or other assets, at an exercise
price of $210.00 per Right (the "Purchase Price"), subject to
adjustment. The terms and conditions of the Rights are set forth in
a Rights Agreement dated as of September 19, 1995, as may be amended
from time to time (the "Rights Agreement"), between the Company and
Harris Trust and Savings Bank, as Rights Agent. A conformed copy of
the Rights Agreement attached hereto as Exhibit 1, is incorporated
herein by reference and this description of the Rights is qualified
in its entirety by reference to such exhibit. Capitalized Terms not
defined herein are defined in the Rights Agreement.
As of September 29, 1995, the Company had a total of
400,000,000 shares of Common Stock authorized, of which 42,514,718
shares were issued and outstanding. Each outstanding share of
Common Stock on the Record Date will receive one Right. Until the
Distribution Date (as defined below) (or the earlier redemption or
expiration of the Rights), shares of Common Stock issued (whether
newly issued or from treasury) will have the Rights automatically
attached. Following the Distribution Date, shares of Common Stock
issued will be accompanied by Rights only in certain instances.
In the event that a Person or group of affiliated or associated
Persons (an "Acquiring Person") becomes the beneficial owner of or
announces a tender or exchange offer for 20 percent or more of the
outstanding shares of Common Stock (or 15 percent in the case that
the Independent Directors determine such person is an adverse
person), proper provision shall be made so that each holder of a
Right, other than of Rights that are or were beneficially owned by
the Acquiring Person (which will thereafter be null and void), will
thereafter have the right to receive upon exercise that number of
shares of the Preferred Stock (or in certain other circumstances,
Common Stock or assets or other securities of the Company) having a
market value of two times the exercise price of the Right. In the
event that the Company were acquired in a merger or other business
combination transaction or more than 50 percent of the Company's
(together with its subsidiaries) assets or earning power are sold,
proper provision shall be made so that each holder of a Right, other
than of Rights that are or were beneficially owned by an Acquiring
Person (which will thereafter be null and void) shall thereafter
have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of
highest priority voting securities of the Acquiring Person (or
certain of its affiliates) that at the time of such transaction
would have a market value of two times the exercise price of the
Right. If the Rights are exercised to acquire Preferred Stock,
then they will not be exercisable to acquire the securities of an
Acquiring Person.
Until ten calendar days following the earlier to occur of
(unless extended by the Board of Directors and subject to earlier
redemption or expiration of the Rights): (i) the date of a public
announcement that an Acquiring Person acquired, or obtained the
right to acquire, beneficial ownership of 20 percent or more of the
outstanding shares of the Common Stock of the Company (or 15 percent
in the event the Independent Directors determine such Person is an
"Adverse Person" as defined in the Rights Agreement) or (ii) the
commencement or announcement of an intention to make a tender offer
or exchange offer (other than a Permitted Offer) that would result
in a Person or group beneficially owning 20 percent or more of such
outstanding shares of Common Stock of the Company (or 15 percent in
the event the Independent Directors determine such Person is an
"Adverse Person") (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to
any of the Company's Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate. The certificates for
shares of Common Stock issued after the Record Date but prior to the
Distribution Date, will have a notation referencing the Rights
Agreement. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with
the Company's Common Stock, and until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates
outstanding as of the Record Date, will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date
and such separate Rights Certificates alone will evidence the
Rights.
Permitted Offer is defined in the Rights Agreement as a tender
offer that is for all outstanding Common Stock of the Company at a
price and on terms determined to be adequate prior to the purchase
of shares under such tender or exchange offer, by at least a
majority of the Independent Directors, taking into account all
factors that such directors deem relevant including, without
limitation, prices that could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realize
maximum value and otherwise in the best interests of the Company and
its stockholders (other than the Person or any Affiliate or
Associate thereof for whose benefit the offer is being made).
An Independent Director means any member of the Board of
Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate and was a member of the
Board prior to the Share Acquisition Date, and any successor of an
Independent Director, while such successor is a member of the Board,
who is not an Acquiring Person, an Affiliate or Associate of an
Acquiring Person, or representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and who is recommended
or elected to succeed the Independent Director by a majority of the
remaining Independent Directors.
The Purchase Price payable, and the number of shares of
Preferred Stock (or Common Stock, other securities, cash or other
assets, as the case may be) 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 shares of the Preferred Stock or convertible
securities at less than the 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 out of earnings or retained earnings or
dividends payable in the Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1 percent in such Purchase Price. No fractional shares
will be issued (other than fractional shares which are integral
multiples of one-thousandth of a share of Preferred Stock) and, in
lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last Trading Date prior to the
Date of exercise.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on October 12, 2005, unless earlier redeemed
by the Company as described below.
At any time prior to 5:00 p.m. Kansas City, Missouri time on
the tenth calendar day after the first date after the public
announcement that an Acquiring Person has acquired beneficial
ownership of 20 percent (or 15 percent in some instances) or more of
the outstanding shares of the Common Stock of the Company (the
"Share Acquisition Date"), the Company may redeem the Rights in
whole, but not in part, at a price of $0.005 per Right (the
"Redemption Price"). Following the Share Acquisition Date, but
prior to an event listed in Section 13(a) of the Rights Agreement
(i.e. a merger, consolidation or sale of more than 50 percent of the
assets or earnings power of the Company and its subsidiaries), the
Company may redeem the Rights in connection with any event specified
in Section 13(a) in which all stockholders are treated alike and
which does not include the Acquiring Person or its Affiliates or
Associates. In addition, the Company's right of redemption may be
reinstated following an inadvertent trigger of the Rights (as
determined by the Board) if an Acquiring Person reduces its
beneficial ownership to 10 percent or less of the outstanding shares
of Common Stock of the Company in a transaction or series of
transactions not involving the Company. Immediately upon the action
of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the
only right of the holders of the Rights will be to receive the
Redemption Price.
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. While the
distribution of the Rights will not be taxable to stockholders of
the Company, stockholders may, depending on the circumstances,
recognize taxable income in the event that the Rights become
exercisable for the Preferred Stock (or other securities, as the
case may be) of the Company.
Prior to the Distribution Date, the Company may amend or
supplement any provision of the Rights Agreement without the consent
of the Holders of the Rights. Following the Distribution Date, the
Company may amend the provisions of the Rights Agreement in order to
cure any ambiguity, to correct any defect or inconsistency, to make
changes deemed necessary or desirable so long as such changes do not
adversely affect the interests of the holders of the Rights
(excluding the interests of any Acquiring Person and its affiliates
and associates). In either case, however, the Company may not amend
or supplement the Rights Agreement to change the Redemption Price,
Final Expiration Date, the Purchase Price or the number of
1/1,000ths of a share of Preferred Stock for which a Right is
exercisable.
The Rights may have the effect of impeding a change in control
of the Company without the prior consent of the Company's Board of
Directors, and the Rights could cause substantial dilution to a
person that attempts to acquire the Company without conditioning the
offer on redemption of the Rights by the Company's Board of
Directors or on the acquisition by such person of a substantial
number of Rights. The Rights will not interfere with any Permitted
Offer for all of the outstanding Common Stock that has the approval
of the Independent Directors.
Item 2. Exhibits.
1. A conformed copy of Rights Agreement dated as of September
19, 1995 between Kansas City Southern Industries, Inc. and Harris
Trust and Savings Bank, which includes as Exhibit A the Form of
Certificate of Designation of Series A Preferred Stock, Exhibit B
Form of Rights Certificate and Exhibit C Summary of Rights to
Purchase Preferred Stock is attached as Exhibit 1.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
Date: October 24, 1995 KANSAS CITY SOUTHERN INDUSTRIES, INC.
By /s/ Richard P. Bruening
Richard P. Bruening, Vice President,
Corporate Secretary and
General Counsel
<PAGE>
EXHIBIT 99
KANSAS CITY SOUTHERN INDUSTRIES, INC.
and
HARRIS TRUST & SAVINGS BANK, Rights Agent
RIGHTS AGREEMENT
Dated as of
September 19, 1995
<PAGE>
KANSAS CITY SOUTHERN INDUSTRIES, INC. RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of a Rights Agent . . . . . . . . . . . . . . .5
Section 3. Certificates and Transfer of Rights . . . . . . . . . . . .5
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . .8
Section 5. Countersignature and Registration . . . . . . . . . . . . .9
Section 6. Transfer, Split Up, Combination and Exchange of
Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9. Reservation and Availability of Shares of Capital
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . 14
Section 11. Adjustment of Purchase Price, Number of Shares of
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . 15
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or
Earning Power. . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 26
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . 27
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . 27
Section 17. Rights Certificate Holder Not Deemed A Stockholder. . . . 28
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 28
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . 30
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 31
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . 32
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . 33
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . . . 34
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . 35
Section 27. Successors. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 28. Determination and Actions by the Board of Directors,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 29. Benefits of this Agreement. . . . . . . . . . . . . . . . 37
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . . . 37
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . 37
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 38
Section 33. Descriptive Headings. . . . . . . . . . . . . . . . . . . 38
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Rights Certificate
- Form of Assignment
- Certificate
- Notice
- Form of Election to Purchase
- Certificate
- Notice
Exhibit C - Summary of Rights to Purchase Preferred Stock
<PAGE>
RIGHTS AGREEMENT
This Agreement, dated as of September 19, 1995, between KANSAS
CITY SOUTHERN INDUSTRIES, INC., a Delaware corporation (the
"Company"), and HARRIS TRUST & SAVINGS BANK, an Illinois banking
corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one Right (as defined herein) for each
outstanding share of the common stock (as defined herein), of the
Company at the close of business on October 12, 1995 (the "Record
Date") and has authorized the issuance of one Right (as such number
may hereinafter be adjusted pursuant to the provisions of Section 11
hereof) in respect of each share of Common Stock of the Company
issued (whether originally issued or delivered from the Company's
treasury) between the Record Date and the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date
(as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances,
1/1,000ths of a share of Preferred Stock (as defined herein), upon
the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the Company and the Rights Agent hereby
agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the
meanings indicated.
(a) "Acquiring Person" shall mean any Person who, together
with all Affiliates or Associates of such Person, shall be the
Beneficial Owner of a Substantial Block, whether or not such Person
continues to be the Beneficial Owner of a Substantial Block, but
shall not include: (i) the Company; (ii) any subsidiary of the
Company; (iii) any employee benefit plan of the Company or of any
subsidiary of the Company, or any Person organized, appointed or
established by the Company or by any subsidiary of the Company for
or pursuant to the terms of any such plan; (iv) a Person who,
together with all Affiliates and Associates of such Person, would
become an Acquiring Person solely as a result of a reduction of the
number of shares of Common Stock of the Company outstanding,
including repurchases of outstanding shares of Common Stock of the
Company by the Company, which reduction increases the percentage of
outstanding shares of Common Stock of the Company beneficially owned
by such Person until such Person, Affiliate or Associate shall
thereafter become the Beneficial Owner of any additional shares of
Common Stock.
(b) "Adjusted Number of Shares" shall have the meaning given
the term in Section 11(a)(iii) of this Agreement.
(c) "Adjusted Purchase Price" shall have the meaning given the
term in Section 11(a)(iii) of this Agreement.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act as
in effect on the date hereof.
(e) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities that:
(i) Such Person, or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the Exchange Act);
(ii) Such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has: (A) the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or
upon the exercise, conversion or exchange of rights, warrants
or options, or otherwise, (provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by such Person or any such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange and securities issuable upon
the exercise of the Rights at any time prior to the occurrence
of a Triggering Event); or (B) the right to vote or dispose of
pursuant to any agreement, arrangement or understanding
(whether or not in writing) provided, however, that a Person
shall not be deemed the Beneficial Owner or to beneficially
own, any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, 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) Are beneficially owned, directly or indirectly,
by any other Person with which such former Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in clause (B) of subparagraph
(ii) of this paragraph (c)) or disposing of any securities of
the Company;
provided, however, that nothing in this paragraph (e) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(f) "Capital Stock Equivalents" shall have the meaning given
the term in Section 11(a)(iii) of this Agreement.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
Missouri or Illinois are authorized or obligated by law or executive
order to close.
(h) "Close of Business" on any given date shall mean 5:00
p.m., Kansas City, Missouri time, on such date, provided, however,
if such date is not a Business Day it shall mean 5:00 p.m. on the
next succeeding Business Day.
(i) "Common Stock" when used with reference to the Company
shall mean the Common Stock, $0.01 par value, of the Company as
adjusted from time to time. "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock
with the greatest voting power of such Person or the equity
securities or other equity interest having power to control or
direct the management of such Person.
(j) "Current Market Price" of the Common Stock shall have the
meaning given the term in Section 11(d)(i) of this Agreement.
(k) "Current Market Price" of the Preferred Stock shall have
the meaning given the term in Section 11(d)(ii) of this Agreement.
(l) "Distribution Date" shall have the meaning given the term
in Section 3(a) of this Agreement.
(m) "Exchange Act" shall mean the Securities Exchange Act of
1934, or any successor thereto, and the rules and regulations
promulgated thereunder, all as the same shall be amended from time
to time.
(n) "Expiration Date" shall have the meaning given the term
in Section 7(a) of this Agreement.
(o) "Final Expiration Date" shall have the meaning given the
term in Section 7(a) of this Agreement.
(p) "Independent Director" shall mean any member of the Board
of Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate and was a member of the
Board prior to the Share Acquisition Date, and any successor of an
Independent Director, while such successor is a member of the Board,
who is not an Acquiring Person, an Affiliate or Associate of an
Acquiring Person, or representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and who is recommended
or elected to succeed the Independent Director by a majority of the
remaining Independent Directors.
(q) "Permitted Offer" shall mean a tender or exchange offer
that is for all outstanding Common Stock of the Company at a price
and on terms determined to be adequate prior to the purchase of
shares under such tender or exchange offer, by at least a majority
of the Independent Directors, taking into account all factors that
such directors deem relevant including, without limitation, prices
that could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realized maximum value and
otherwise in the best interests of the Company and its stockholders
(other than the Person or any Affiliate or Associate thereof for
whose benefit the offer is being made).
(r) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust or other entity.
(s) "Preferred Stock" shall mean the shares of Series A
Preferred Stock, par value $1.00 per share, of the Company having
substantially the rights, powers and preferences set forth in the
Certificate of Designation attached hereto as Exhibit A, to the
extent that there are not a sufficient number of shares of Series A
Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock of the Company
designated for such purpose containing terms substantially similar
to the terms of the Series A Preferred Stock.
(t) "Principal Party" shall have the meaning given the term
in Section 13(b)
of this Agreement.
(u) "Proration Factor" shall have the meaning given the term
in Section 11(a)(iii) of this Agreement.
(v) "Rights Certificates" shall have the meaning given the
term in Section 3 of this Agreement.
(w) "Share Acquisition Date" shall mean the close of business
on the tenth calendar day after 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.
(x) "Securities Act" shall mean the Securities Act of 1933,
or any successor thereto, and the rules, regulations, and forms
promulgated thereunder, all as the same shall be amended from time
to time.
(y) A "subsidiary" of any Person shall mean any Person of whom
a majority of the voting power of the voting equity securities or
voting interests is owned or, directly or indirectly, by such former
Person, or which is otherwise controlled, directly or indirectly, by
such former Person.
(z) "Substantial Block" shall mean a number of shares of the
Common Stock of the Company that equals or exceeds 20 percent of the
number of shares of the Common Stock of the Company then
outstanding; provided, however, that if the Board of Directors of
the Company shall declare any Person to be an Adverse Person, upon
a determination that such Person, alone or together with its
Affiliates and Associates, has, at any time after the Record Date,
become the Beneficial Owner of an amount of Common Stock of the
Company that the Board of Directors determines to be substantial
(which amount shall in no event be less than 10 percent of the
shares of Common Stock of the Company then outstanding) and a
determination by at least a majority of the Independent Directors,
after reasonable inquiry and investigation, including consultation
with such persons as such directors shall deem appropriate, that (a)
such Beneficial Ownership by such Person is intended to cause the
Company to repurchase the Common Stock beneficially owned by such
Person or to cause pressure on the Company to take action or enter
into a transaction or series of transactions intended to provide
such Person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term interests
of the Company and its stockholders would not be served by taking
such action or entering into such transactions or series of
transactions at that time or (b) such Beneficial Ownership is
causing or reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its
competitive position) on the business or prospects of the Company,
then with respect to such Adverse Person, "Substantial Block shall
mean a number of shares of the Common Stock of the Company that
equals or exceeds 15 percent of the number of shares of Common Stock
of the Company then outstanding.
(aa) "Trading Days" shall have the meaning given the term in
Section 11(d)(i) of this Agreement.
(bb) "Triggering Event" shall mean any event described in
Sections 11(a)(ii) or 13(a) of this Agreement.
Section 2. Appointment of a Rights Agent.
The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance
with Section 3, hereof shall prior to the Distribution Date also be
the holders of the Common Stock of 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.
Section 3. Certificates and Transfer of Rights.
(a) Common Stock Outstanding on the Record Date. Until the
earlier of (unless extended by the Board of Directors of the
Company) (i) the Share Acquisition Date or (ii) the close of
business on the tenth calendar 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 of, or first public announcement of the intent of any
Person (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any Person organized,
appointed or established by the Company or any subsidiary of the
Company for or pursuant to the terms of any such plan) to commence
(which intention to commence remains in effect for five business
days after such announcement) a tender or exchange offer if, upon
consummation thereof, such Person would be an Acquiring Person
(including any such date that is after the date of this Agreement
and prior to the issuance of the Rights (the earlier of the dates in
subsections (i) and (ii) hereof being herein referred to as the
"Distribution Date"), the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates
for Common Stock of the Company (which certificates of such Common
Stock of the Company shall be deemed also to be Rights
Certificates), and not by separate Rights Certificates, and the
right to receive Rights Certificates will be transferable only in
connection with the transfer of such Common Stock (including a
transfer to the Company). With respect to certificates for the
Common Stock of the Company outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock of the Company with or without a
Summary of Rights attached thereto and the registered holders of the
Common Stock of the Company shall also be the registered holders of
the associated Rights. Until the earlier of Distribution Date or
Expiration Date, the surrender or transfer (including a transfer to
the Company) of any of the certificates for the Common Stock of the
Company outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Common Stock of the
Company represented by such certificate. The Company will include
with its mailing, by third-class, postage prepaid mail, of its
quarterly report to Stockholders, if any, a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"). If such mailing has not occurred by the
expiration of 60 days after the expiration of the quarter in which
this Agreement becomes effective, the Company will promptly mail the
Summary of Rights separately, by first-class, postage prepaid mail,
to each record holder of the Common Stock of the Company as of the
close of business on the Record Date, at the address of such holder
shown on the records of the Company.
(b) Distribution of Separate Rights Certificates. As soon as
practicable after the Distribution Date, the Rights Agent will send,
by first-class, insured, postage prepaid mail, to each record holder
of the Common Stock of the Company as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Company, a separate Rights Certificate in
substantially the form of Exhibit B attached hereto evidencing one
Right for each share of the Common Stock of the Company so held,
subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(p) hereof, at the time of distribution of the
Rights Certificate, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(c) Issuance of Additional Shares of Common Stock and Rights.
Rights shall be issued in respect of all shares of Common Stock of
the Company issued (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date. Certificates
representing such shares of such Common Stock shall be deemed to be
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 Kansas City Southern Industries, Inc.
and Harris Trust & Savings Bank dated as of September 19,
1995, as 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 is on file at the
principal executive offices of Kansas City Southern
Industries, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be
redeemed, may expire or may be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Kansas City Southern Industries, Inc. will
mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing,
without charge within five business days after receipt of
a written request therefor. Under certain circumstances,
Rights issued to, or which are or were beneficially owned
by, Acquiring Persons or their Affiliates or Associates
(as such terms are defined in the Rights Agreement) and
any subsequent holder of such Rights may become null and
void.
Until the earlier of the Distribution Date or the Expiration Date,
the Rights associated with the Common Stock of the Company
represented by certificates containing the foregoing legend shall be
evidenced by such certificates alone, and the surrender for transfer
of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificate.
(d) Purchase of Common Stock by the Company. In the event
that the Company purchases or acquires any of its Common Stock after
the Record Date but prior to the Distribution Date, the Company
shall not be entitled to exercise any Rights associated with the
Common Stock so purchased or acquired. Upon reissuance of such
Common Stock by the Company the Rights shall again attach to such
Common Stock as set forth in Section 3(c) of this Agreement.
(e) Restriction on Transfers to Acquiring Persons.
Notwithstanding anything in this Agreement to the contrary, no Right
shall at any time be transferable or transferred, in one transaction
or in a series of related transactions (including a tender offer or
exchange offer), directly or indirectly (i) to any Person who is an
Acquiring Person, (ii) to any Person in connection with a
transaction or series of related transactions in which such Person
becomes an Acquiring Person, (iii) to any Person who, as a result of
such transfer, would beneficially own 20 percent or more of the
Rights, or (iv) to any Affiliate or Associate of a Person referred
to in any one or more of the foregoing clauses (i), (ii), or (iii).
Any purported or attempted transfer of a Right on or after the
Record Date in violation of the foregoing provisions (regardless
whether such purported or attempted transfer shall be recorded on
any transfer ledger) shall be null and void as of the date of the
purported or attempted transfer without any further action on the
part of the Company or the Rights Agent, and any Right that has been
the subject of any such purported or attempted transfer shall for
purposes of this Agreement and the Right Certificate be deemed to be
held beneficially by the Person who attempted to make such purported
or attempted transfer and, thereafter, shall continue to be
exercisable by such Person or, in the case of a transfer not
prohibited by this Agreement, such Person's transferee, for a like
number of 1/1,000ths of a Preferred Share (or other securities, cash
or other assets, as the case may be) pursuant to this Agreement.
The Company may require (or cause the Rights Agent or any transfer
agent of the Company to require) any Person who submits a Right
Certificate for transfer on the registry books or to exercise the
Rights represented thereby to establish to the satisfaction of the
Company, in its sole discretion, that such attempted transfer is not
in violation of the provisions of this Section 3(e). The Company
and the Rights Agent shall use all reasonable efforts to insure the
provisions of this Section 3(e) are complied with, but shall have no
liability to any holder of a Right Certificate (other than as
specifically provided herein) or any other Person as a result of a
failure to so insure.
Section 4. Form of Rights Certificates.
(a) Form of Certificate. The Rights Certificates (and the
forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall, subject to paragraph (a) of Section
3 of this Agreement, be substantially the same as Exhibit B hereto
and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usages.
Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever issued, shall be dated as of the
Record Date, and on their face shall entitle the holders thereof to
purchase such number of 1/1,000ths of a share of Preferred Stock as
shall be set forth therein at the price per 1/1,000ths of a share of
Preferred Stock set forth therein (the "Purchase Price"), but the
number of such shares and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any
Rights Certificate issued pursuant to Section 3 or Section 22 hereof
that represent Rights beneficially owned by (i) an Acquiring Person
or any Associate or Affiliate thereof, (ii) a transferee of an
Acquiring Person (or of any Associate or Affiliate of such Acquiring
Person) who becomes a transferee after the Acquiring Person became
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate of such Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan,
arrangement or understanding that has a primary purpose or effect
avoidance of Section 7(e) hereof, any Rights Certificate issued at
any time to any nominee of such Acquiring Person, Associate or
Affiliate, and any Rights Certificate issued pursuant to Section 6
or Section 11 upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights
Agreement.
The provisions of Section 7(e) of the Rights Agreement shall be
operative whether or not the foregoing legend is contained on any
Rights Certificate.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company in the manner provided in the By-Laws of the Company for
certificates for Common Stock of the Company. The Rights
Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile, and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights
Agent, issued and delivered with the same force and effect as though
the person who signed such Rights Certificate had not ceased to be
such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at
the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of the Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates, and such other information as the Rights Agent deems
appropriate in the circumstances.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date and at or prior to the close of business on the
Expiration Date, any Rights Certificates may be transferred, split
up or combined with or exchanged for any other Rights Certificates,
entitling the registered holder to purchase a like number of
1/1,000ths of a share of Preferred Stock (or following a Triggering
Event, Common Stock, other securities or other assets, as may be
necessary) as the Rights Certificate or Rights Certificates
surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office
or offices of the Rights Agent designated for such purpose of the
Rights Agent. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer
of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge
that may be impose in connection with any transfer, split up,
combination or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
them, and reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will make and deliver a new Rights
Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Rights Certificates so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Sections 9(c),
11(a)(iii) and 23(a) hereof) in whole or in part at any time after
the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase on the reverse side thereof duly
completed and executed, to the Rights Agent at the principal office
of the Rights Agent or offices designated by the Rights Agent for
such purposes, together with payment of the aggregate Purchase Price
for the total number of 1/1,000ths of a share of Preferred Stock (or
other securities or assets, as may be necessary and authorized) as
to which such surrendered Rights are exercised, at or prior to the
close of business on the earlier of: (i) October 12, 2005 (the
"Final Expiration Date"); or (ii) the date on which the Rights are
redeemed as provided in Section 23; or (iii) the consummation of a
transaction contemplated by Section 13(d) hereof (such earlier date
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each 1/1,000ths of a share of
Preferred Stock pursuant to the exercise of a Right shall initially
be $210.00, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights with the form of election to purchase and the
Certificate duly completed and executed, payment of the Purchase
Price for the number of 1/1,000ths of a share of Preferred Stock (or
other securities or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax, the
Rights Agent shall thereupon, subject to Section 20(k), promptly:
(i) (A) requisition from any transfer agent of the
Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such Preferred Stock) a certificate for the
total number of 1/1,000ths of a share of the Preferred Stock to
be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of
shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the
depositary agent a depositary receipt representing such number
of 1/1,000ths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent), and the
Company hereby irrevocably authorizes such depositary agent to
comply with such request;
(ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14;
(iii) promptly after receipt of such certificate or
depositary receipt, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificates,
registered in such name or names as may be designated by such
holder; and
(iv) when appropriate, after receipt promptly deliver such
cash, if any, to or upon the order of the registered holder of
such Rights Certificate.
The payment of the Purchase Price may be made: (i) in cash or by
certified bank check or bank draft payable to the order of the
Company, (ii) by delivery of a certificate or certificates (with
appropriate stock powers executed in blank attached thereto)
evidencing a number of shares of Common Stock equal to the then
Purchase Price divided by the current market price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock on the
Trading Date immediately preceding the date of such exercise, or
(iii) by a combination of (i) and (ii). In the event that the
Company is obligated to issue securities, distribute property or pay
cash pursuant to Section 11(a)(iii) hereof, the Company will make
all arrangements necessary so that cash, property or securities are
available for issuance, distribution or payment by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, if there occurs the event set forth in Section 11(a)(ii),
then any Rights that are or were beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of such Acquiring
Person; (ii) any subsequent holder of such Rights; (iii) a
transferee of an Acquiring Person or of any Associate or Affiliate
thereof who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the
Independent Directors has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e) shall become or be (as the case may
be) null and void with respect to the rights provided under Section
11(a)(ii) without any further action, and shall thereafter provide
any such holder with any rights whatsoever under this Agreement or
otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees thereof.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in
this Section 7 unless such registered holder shall have: (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise; and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange, if
surrendered to the Company or to any of its agents, shall be
delivered to the Rights Agent for cancellation or in canceled form,
or if surrendered to the Rights Agent, then shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company,
or, at the written request of the Company, destroy such canceled
Rights Certificates, and in such latter case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Capital
Stock.
The Company covenants and agrees that it will:
(a) Cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and following the
occurrence of a Triggering Event, out of its authorized and unissued
shares of Common Stock or its authorized and issued Common Stock
held in its treasury, other securities as provided herein or some
combination thereof) the number of shares of Preferred Stock or
other securities as provided herein or some combination of such
securities that will be sufficient to permit the exercise in full of
all outstanding Rights whenever issued.
(b) If the shares of Preferred Stock (and following the
occurrence of a Triggering Event, Common Stock and/or other
securities) issuable upon the exercise of Rights are listed on any
national securities exchange, use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) Use its best efforts to: (i) file, as soon as practicable
following the first occurrence of the Distribution Date, a
registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate
form; (ii) cause such registration statement to become effective as
soon as practicable after such filing; (iii) cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the date of
the expiration of the Rights; (iv) to otherwise comply with all
requirements of the Securities Act and the Exchange Act applicable
to the exercise of the Rights and issuance of the securities upon
such exercise; and (v) take promptly such action as may be appropri-
ate under the blue sky or securities laws of the States such laws of
which would be applicable to the Rights and the exercise thereof in
order for the securities issuable upon exercise of the Rights to be
offered, sold and delivered in accordance with such laws.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the
requisite qualifications in such jurisdiction shall have been
obtained.
(d) Take all such action as may be necessary to ensure that
all 1/1,000ths shares of the Preferred Stock (and following the
occurrence of a Triggering Event, the other securities as permitted
herein) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and non-assessable.
(e) Pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates or of any
certificates for a number of 1/1,000ths shares of the Preferred
Stock (or other securities, as the case may be) upon the exercise of
Rights all costs and expenses incurred in connection with the
obligations set forth in this Section 9. The Company shall not,
however, be required: (i) to pay any transfer tax that may be
payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance of delivery of a
number of certificates for whole or fractional shares of a Preferred
Stock (or other securities, as the case may be) in a name other than
that of the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise; or (ii) to issue or deliver any
certificates for whole or fractional shares of the Preferred Stock
upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date.
Each person in whose name any certificate for any whole or
fractional shares of Preferred Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such
shares of Preferred Stock (or other securities, as the case may be)
represented thereby, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock
(or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificates shall be
dated, the next succeeding business day on which such transfer books
for such securities are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights as a stockholder of the Company with respect
to shares for which the Rights may be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.
The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) In the event that:
(i) Changes in the Preferred Stock. The Company shall
at any time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of the
Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller
number of shares 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) and Section 7(e) hereof, then 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
Preferred Stock (or other securities, as the case may be),
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive, upon the payment of the Purchase Price
then in effect, the aggregate number (whether whole or
fractional) and kind of securities that 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, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to
any adjustment required pursuant to Section 11(a)(ii).
(ii) Determination of Shares of Preferred Stock. Any
Person (other than the Company, any subsidiary of the Company,
any employee benefit plan of the Company or any of its
subsidiaries or any Person holding securities of the Company
organized, appointed or established by the Company or any of
its subsidiaries for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates,
shall become an Acquiring Person (except pursuant to a
Permitted Offer), then proper provisions shall be made so that
each holder of a Right, except as provided in Section 7(e)
hereof, shall, for a period of 60 days after the effective date
of an appropriate registration statement filed pursuant to
Section 9 hereof, have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of whole or fractional
shares of Preferred Stock (or if the Board determines prior to
the Distribution Date, such number of shares of Common Stock of
the Company in lieu of the Preferred Stock) as shall equal the
result obtained by multiplying the then current Purchase Price
by the then number of 1/1,000ths of a share of Preferred Stock
(or such Common Stock) for which a Right is exercisable
immediately prior to the occurrence of such Section 11(a)(ii)
event then dividing that product (which, following such first
occurrence, shall thereafter be referred to as the Purchase
Price for each Right and for all other purposes of this
Agreement) by 50 percent of the current market price per one
share of Preferred Stock (or Common Stock of the Company, as
the case may be) (determined pursuant to Section 11(d)) on the
date of the first occurrence of the event set forth in this
subparagraph (ii) (such number of shares being referred to as
the "Adjustment Shares").
(iii) Insufficient Preferred Stock. There shall not
be sufficient treasury shares or authorized but unissued and
unreserved Preferred Stock (or Common Stock of the Company as
provided for in Section 11(a)(ii) hereof) to permit the
exercise in full of all the outstanding Rights in accordance
with the foregoing subparagraph (ii) and the Rights become so
exercisable, notwithstanding any other provision of this
Agreement, to the extent necessary and permitted by applicable
law, each Right shall thereafter represent the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement: (A)
shares (whether whole or fractional) of Common Stock of the
Company that may permissibly be issued; (B) a number (whether
whole or fractional) of other equity securities of the Company
(or in the discretion of the Board of Directors of the Company,
debt) including, but not limited to, whole or fractional shares
of preferred stock of the Company other than the Preferred
Stock (such alternative securities of the Company being
referred to as "Capital Stock Equivalents"); or (C) some
combination of (A), (B) and the Preferred Stock, that, in the
case of (A), (B) or (C), the Board of Directors of the Company
has determined to have the same aggregate current market value
as determined based upon advice of a nationally recognized
investment banking firm selected by the Independent Directors
and/or pursuant to Section 11(d)(i) and (ii) hereof, to the
extent applicable as the aggregate value of the Preferred Stock
if there were available for issuance sufficient shares of
Preferred Stock; provided, however, if there are unavailable
sufficient Preferred Stock or Capital Stock Equivalents, then
the Company shall, to the extent permitted by applicable law,
promptly take all such action as may be necessary to authorize
additional Preferred Stock or Capital Stock Equivalents for
issuance upon exercise of the Rights, including the calling of
a meeting of stockholders; and provided, further, that if the
Company is unable to cause sufficient Preferred Stock or
Capital Stock Equivalents to be available for issuance upon
exercise in full of all of the outstanding Rights, then each
Right shall thereafter represent the right to receive the
Adjusted Number of Shares upon exercise of the Adjusted
Purchase Price (as such terms are hereinafter defined). As
used herein, the term "Adjusted Number of Shares" shall be
equal to that number of whole or fractional shares of Preferred
Stock (or Capital Stock Equivalents) equal to the product of
(A) the number of Adjustment Shares and (B) a fraction, the
numerator of which is the number of Shares of Preferred Stock
(or Capital Stock Equivalents) available for issuance upon
exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon
exercise in full of all Rights (assuming there were a
sufficient number of shares of Preferred Stock (or Capital
Stock Equivalents as the case may be) available) (such fraction
being referred to as the "Proration Factor"). The "Adjusted
Purchase Price" shall mean the product of the Purchase Price
and the Proration Factor. The Board of Directors may, but
shall not be required to, establish procedures to allocate the
right to receive Shares of Preferred Stock and other Capital
Stock Equivalents upon exercise of the Rights among holders of
Rights.
(b) Preferred Stock Rights or Warrants. In case the Company
shall fix a record date for the issuance of rights or warrants to
all holders of Preferred Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or
purchase Preferred Stock (or Securities convertible into the
Preferred Stock or similar preferred stock) at a price per share of
Preferred Stock (or having a conversion price per share of Preferred
Stock, if a security convertible into Preferred Stock) less than the
current market price per share of Preferred Stock (as defined in
Section 11(d) hereof) on such record date, then 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 (whether whole or fractional)
outstanding on such record date plus the number of shares of
Preferred Stock that the aggregate offering price of the total
number of shares of Preferred Stock and/or similar preferred stock
so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the
number of shares of Preferred Stock (whether whole or fractional)
outstanding on such record date plus the number of additional shares
of Preferred Stock (whether whole or fractional) and/or similar
preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid in part
or all in a form other than cash, then 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 and shall be binding on the
Rights Agent and the Holders of the Rights. Shares of Preferred
Stock (whether whole or fractional) owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such
rights or warrants are not so issued, the Purchased Price shall be
adjusted to be the Purchase Price that would then be in effect if
such record date has not been fixed.
(c) Distributions on the Preferred Stock. In case the Company
shall fix a record date for the making of a distribution to all
holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is
the continuing corporation) of evidences of indebtedness, assets
(other than a regular periodic cash dividend at a rate not in excess
of 125 percent of the rate of the last cash dividend theretofore
paid out of the earnings or retained earnings of the Company or a
dividend payable in Preferred Stock (but including any dividend
payable in stock other than Preferred Stock)), securities or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), then 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 current market price
per share of Preferred Stock (as defined in 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 and shall be binding on the Rights Agent and the
Holders of the Rights) of the portion of the assets, evidences of
indebtedness, securities, subscription rights or warrants so to be
distributed and applicable to one share of Preferred Stock and the
denominator of which shall be such current market price per share of
Preferred Stock (as determined pursuant to Section 11(d) hereof).
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 that would then be in effect if such record date had not been
fixed.
(d) Determination of Current Market Price. For the purpose
of any computation hereunder:
(i) The "current market price" per share of Common Stock
on any date shall be deemed to be for purposes other than
Section 11(a)(iii) hereof the average of the daily closing
prices per share of such Common Stock for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately
prior to such date and for purposes of Section 11(a)(iii)
hereof, the average of the daily closing prices per share of
such Common Stock for the 10 consecutive Trading Days
immediately prior to that date; provided, however, that in the
event that the current market price per share of Common Stock
is determined during the period following the announcement by
the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, shall not have occurred prior to the
commencement of the requisite 30 or 10 Trading Day period,
then, and in each such case, the current market price shall be
appropriately adjusted to reflect the current market price per
Common Stock equivalent. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the
principal national securities exchange on which the shares of
the Common Stock are listed or admitted to trading or, if the
shares of the Common Stock are not listed or admitted to
trading on any national securities exchange, the last sale
price or, if not so reported, the average of the high bid and
low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated
Quotation System (the "NASDAQ System") or such other system
then in use, or, if on any such date the shares of the Common
Stock are not quoted by such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by
the Board of Directors of the Company. If on any such date no
market maker is making a market in the Common Stock, the fair
value of such Common Stock on such date shall be as determined
in good faith by the Independent Directors if the Independent
Directors constitute a majority of the Board of Directors, or
in the event the Independent Directors do not constitute a
majority of the Board of Directors, by an independent
investment banking firm selected by the Board of Directors.
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common
Stock are listed or admitted for trading is open for the
transaction of business or, if the shares of the Common Stock
are not listed or admitted for trading on any national
securities exchange, a Business Day on which securities were
traded in the over-the-counter market. If the Common Stock is
not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as
determined in good faith by the Independent Directors if the
Independent Directors constitute a majority of the Board of
Directors or in the event the Independent Directors do not
constitute a majority of the Board of Directors, by an
independent investment banking firm selected by the Board of
Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive
for all purposes.
(ii) The "current market price" per share of Preferred
Stock shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market price
per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held
or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount
equal to 1,000 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and
recapitalization with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current
market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so
listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as
determined in good faith by the Independent Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current
market price" of 1/1,000ths of a share of Preferred Stock shall
be equal to the "current market price" of one share of
Preferred Stock divided by 1,000.
(e) Limitation on Adjustment on Purchase Price.
Notwithstanding anything herein to the contrary, no adjustment in
the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1 percent in such price;
provided, however, that any adjustments that by reason of this
Section 11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent
or to the nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction
which mandates such adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become
entitled to receive any Capital Stock Equivalents or other shares of
capital stock of the Company other than shares of Preferred Stock,
thereafter the number of such other shares so receivable upon
exercise of any Right and the payment Purchase Price thereof shall
be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Section 11(a) through (o),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 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
1/1,000ths 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.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections
11(b) and (c) hereof, 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 1/1,000ths
of a share of Preferred Stock (calculated to the nearest ten-
thousandth) obtained by (i) multiplying (x) the number of 1/1,000ths
of a share covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights in
lieu of any adjustment in the number of 1/1,000ths 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 1/1,000ths 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 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 the 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 date thereafter, but, if the Rights Certificates have been
issued, shall be at least 10 Business Days later than the date of
the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause
to be distributed to holders of record of Rights Certificates on
such record date Rights Certificates evidencing, subject to Section
14, the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record
of Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of 1/1,000ths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per 1/1,000ths of a share and the number of
1/1,000ths of a share that were expressed in the initial Rights
Certificates issued hereunder and if so, shall not affect in any way
the adjustments or changes required under this Agreement.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of
the number of 1/1,000ths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action
that may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and non-
assessable such number of 1/1,000ths of a share of such Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of 1/1,000ths of a share
of Preferred Stock and Capital Stock Equivalents, if any, issuable
upon such exercise over and above the number of 1/1,000ths of a
share of 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 (fractional or otherwise) or other
securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine
to be advisable in order that any (i) consolidation or subdivision
of Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for shares
of Preferred Stock, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23
or 26 hereof, take (nor will it permit any of its subsidiaries to
take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that it shall not, at any
time after the Distribution Date (other than in a transaction or
series of transactions that comply with Section 11(n) hereof): (i)
consolidate with; (ii) merge with or into; or (iii) sell or transfer
(or permit any of its subsidiaries to sell or transfer), in one or
more transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person if at the time
of or immediately after such consolidation, merger or sale there are
any rights, warrants, other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company shall at any time after the
Record Date and prior to the Distribution Date: (i) declare a
dividend on the outstanding shares of Common Stock of the Company
payable in shares of Common Stock of the Company, (ii) subdivide the
outstanding shares of Common Stock of the Company, or (iii) combine
the outstanding shares of Common Stock of the Company into a smaller
number of shares, then the number of Rights associated with each
share of Common Stock of the Company then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock of the Company following
any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock of the
Company immediately prior to such event by a fraction, the numerator
of which shall be the total number of shares of Common Stock of the
Company outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of
Common Stock of the Company outstanding immediately following the
occurrence of such event.
(q) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent
so exercised and shall not otherwise affect the rights provided for
under this Agreement, including the rights provided for by Section
13.
(r) Notwithstanding any other provision of this Agreement to
the contrary, if the Company determines that a registration
statement filed pursuant to Section 9(c) hereof is required to be
amended or supplemented to continue to comply with the Securities
Act, then the Company may suspend the exercisability of the Rights
and shall promptly after such determination take all necessary steps
to cause to be effective such amended or supplemented registration
statement. Immediately following such determination to amend or
supplement such registration statement, and immediately following
the time such amended or supplemented registration statement shall
become effective, the Company shall publicly announce the suspension
of the exercisability of the Rights or the termination of such
suspension.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.
Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Company shall: (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment; (b) promptly file with the Rights
Agent and with each transfer agent for the Preferred Stock and the
Common Stock copy of such certificate; and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing
Shares of Common Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) Effect on Rights. In the event that, following the Share
Acquisition Date, directly or indirectly: (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof) and the Company shall not be the surviving or
continuing corporation of such consolidation or merger; (y) any
Person (other than a subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge
with or into, the Company, and the Company shall be the continuing
or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the
outstanding Shares of Common Stock of the Company shall be changed
into or exchanged for stock or other securities of any other Person
or cash or any other property; or (z) the Company shall sell or
otherwise transfer (or one or more of its subsidiaries shall sell or
otherwise transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or any subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that: (i)
each holder of a Right (except as provided in Section 7(e) hereof)
shall thereafter be entitled to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of
this Agreement, such number of shares of validly authorized and
issued, fully paid, non-assessable and freely tradable Common Stock
of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of call or first refusal, or other
adverse claims as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the then number of
1/1,000ths of a share of Preferred Stock for which a Right is then
exercisable immediately prior to the first occurrence of any of the
events described in subsections (x), (y) or (z) of this paragraph
(a) of Section 13 (each a "Section 13 Event") (or, if an event
described in Section 11(a)(ii) (each a "Section 11(a)(ii) Event")
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such 1/1,000ths of a share for which a
Right was exercisable immediately prior to the first occurrence of
a Section 11(a)(ii) Event) by the Purchase Price in effect
immediately prior to such first occurrence, and (B) dividing that
product (which following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for
all purposes of the Agreement) by 50 percent of the current market
price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(d)(i) hereof) on
the date of consummation of such Section 13 Event; (ii) the
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof
apply to such Principal Party following the first occurrence of a
Section 13 Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the authorization and
reservation of a sufficient number of shares of its Common Stock) in
connection with the 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.
(b) Definition of Principal Party. The term "Principal Party"
shall mean:
(i) in the case of any transaction described in
subsection (x) or (y) of paragraph (a) of this Section 13,
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger
or consolidation; or
(ii) in the case of any transaction described in
subsection (z) of paragraph (a) of this Section 13, the Person
that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (x) if the Common Stock of
such Person is not at such time and has not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect subsidiary of
another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person the
Common Stock of which is so registered; (y) in case such Person is
a subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest market value of
shares held by the public, and (z) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (x) and (y) above shall apply to each
of the chains of ownership having an interest in such joint venture
as if such party were a "subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear
the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total
of such interests.
(c) Limitation on Consummation of Mergers. The Company shall
not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit the exercise in full of all of the
Outstanding Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
will use its best efforts to cause such registration statement
to (A) become effective as soon as practicable after such
filing, and (B) will use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act)
until the date of expiration of the Rights and will use its
best efforts to comply with all applicable State blue sky and
other securities laws; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable
in the manner described in Section 13(a).
(d) Permitted Offers. Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be applicable to a
transaction described in subsections (x) and (y) of paragraph (a) of
this Section 13 if: (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a
Permitted Offer (or a wholly owned subsidiary of any such Person or
Persons); (ii) the price per share of Common Stock of the Company
offered in such transaction is not less than the price per Common
Share of the Company paid to all holders of Common Stock of the
Company whose shares were purchased pursuant to such Permitted
Offer; and (iii) the form of consideration being offered to the
remaining holders of Common Stock of the Company pursuant to such
transaction is the same as the form of consideration paid pursuant
to such Permitted Offer. Upon consummation of such transaction
contemplated by this paragraph (d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) Issuance of Fractional Rights. The Company shall not be
required to issue fractions of Rights, except prior to the
Distribution Date in accordance with Section 11(p) hereof, or to
distribute Rights Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 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 of the Rights 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 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 sale price or,
if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the NASDAQ System 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 Independent Directors if such
directors contribute a majority of the Board of Directors or by an
independent investment Banker selected by the Independent Directors
shall be used.
(b) Issuance of Certain Fractional Shares of Preferred Stock.
The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of
1/1,000ths of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional
shares (other than fractions that are integral multiples of
1/1,000ths of a share of Preferred Stock). In lieu of fractional
shares that are not integral multiples of 1/1,000ths of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of 1/1,000ths of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of
1/1,000ths of a share of Preferred Stock shall be 1/1,000ths of the
closing price of a share of Preferred Stock (as determined pursuant
to Section 11(d)(ii)) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering Event the Company
shall not be required to issue fractions of shares of its Common
Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of such Common Stock. In lieu of
fractional shares of such Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of a the
Common Stock of the Company. For purposes of this Section 14(c),
the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant
to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as permitted by
this Section 14.
Section 15. Rights of Action.
All rights of action in respect of this Agreement are vested in
the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in his
own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations of,
the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders.
Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agents 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 Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
(c) subject to Section 6(a), Section 7(e) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common 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,
subject to the last sentence of Section 7(e) hereof, shall be
required to 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, however, the
Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder
of the number of shares of 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 Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificates shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the cost
and expenses of defending against any claim of liability in the
premises and reasonable counsel fees and expenses.
(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 Rights Certificate or certificate for the Common
Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
(c) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation, succeeding to the
corporate trust, stock transfer or other stockholder services
business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, provided, however, 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 Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificate so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any assistant
treasurer, the Secretary, or any assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for, or by reason of,
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except as to its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this 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 Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or be responsible for the
manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
the Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(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 be reasonably required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
any Vice President, the Treasurer, any assistant Treasurer, the
Secretary, or any assistant 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
to be taken by it in good faith in accordance with instructions of
any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not 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 that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicated an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested
exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement and upon 30 days
notice in writing mailed to the Company and to each transfer agent
of the Preferred Stock and the Common Stock by registered or
certified mail, and to the holders of the Rights Certificates by
first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Preferred Stock and the Common Stock
by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor Rights Agent. If the Company
shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be: (i)
a corporation organized, existing and doing business under the laws
of the United States or of any state of the United States, in good
standing, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time
of its appointment as Rights Agent a combined capital and surplus of
at least $50 million; or (ii) an Affiliate of a corporation
described in clause (i) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment
the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Preferred
Stock and the Common Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 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 Rights Certificates.
Notwithstanding any of the provision of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue
new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price per share and the number or kind or
class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock of the Company following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to such shares of Common
Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement granted or awarded prior to
or as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company
or the Person to whom such Rights Certificates would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made
in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
at any time prior to 5:00 p.m., Kansas City time, on the earlier of
(x) the Share Acquisition Date (or if the Share Acquisition Date
shall have occurred prior to the Record Date, the close of business
on the tenth day following the Record Date) or (y) the Final
Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.005 per Right as such
amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"), provided, however, that if, following the
occurrence of a Share Acquisition Date but prior to any event
described in Section 13(a), either (x) in connection with any event
specified in Section 13(a) in which all holders of Common Stock are
treated alike and not involving (other than as a holder of Common
Stock being treated like all other such holders) an Acquiring Person
or an Affiliate or Associate of an Acquiring Person or any other
person in which such Acquiring Person, Affiliate or such Associate
has any interest, or any other Person acting directly or indirectly
on behalf of or in association with any such Acquiring Person,
Affiliate or Associate, or (y) following the occurrence of an event
set forth in, and the expiration of any period during which the
holders of Rights may exercise the Rights under, Section 11(a)(ii)
if each of the following shall have occurred and remain in effect:
(i) such Section 11(a)(ii) event shall be deemed inadvertent as
determined by the Board in its discretion taking into account all
such factors as the Board deems relevant; (ii) a Person who is an
Acquiring Person shall have transferred or otherwise dispose of a
number of shares of Common Stock in a transaction, or series of
transactions, which did not result in the occurrence of a Triggering
Event such that such Person is thereafter a Beneficial Owner of 10
percent or less of the outstanding shares of Common Stock of the
Company, (iii) there are no other Persons, immediately following the
occurrence of the event described in clause (ii) hereof, who is
Acquiring Persons, and (iv) the transfer or other disposition
described in clause (ii) hereof, above was other than pursuant to a
transaction, or series of transactions, which directly or indirectly
involved the Company or any of its Subsidiaries, then the right of
redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. Promptly after
the action of the Board of Directors ordering the redemption for the
Rights, the Company shall file with the Rights Agent evidence of
such action by the Board of Directors and shall give notice of such
redemption to the holders of the then outstanding Rights by mailing
such notice to each such holder at such holder's last addresses as
it appears upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock of the Company. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will
be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in
this Section 23, and other than in connection with the purchase of
Common Stock of the Company prior to the Distribution Date.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose at any time following
the Distribution Date: (i) to pay any dividend payable in stock of
any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend at a rate not in excess of 125 percent of the
rate of the last cash dividend theretofore paid); (ii) to offer to
the holders of 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 Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock); (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the
Company in a transaction or transactions that comply with Section
11(o) hereof); (v) to effect any sale or other transfer (or to
permit one or more of its subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50 percent of
the assets or earning power of the Company and its subsidiaries
(taken as a whole) to, any other Person (other than a Subsidiary of
the Company in a transaction or transactions that comply with
Section 11(o) hereof); or (vi) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, in
accordance with Section 25, a notice of such proposed action, which
shall specify the record date for, and the purposes of, such stock
dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the 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 twenty days prior to the record date for determining holders
of Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty days prior to the date of the
taking of such proposed action or the date of participation therein
by the holders of the Preferred Stock, whichever shall be earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
of this Agreement shall occur, then, in any such case; (i) the
Company shall, as soon as practicable thereafter, give to each
holder of a Rights Certificate, in accordance with Section 25 and to
the extent feasible, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii); and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed to thereafter
refer to Common Stock and/or other securities, as the case may be.
Section 25. Notices.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Kansas City Southern Industries, Inc.
Attn.: President
114 West 11th Street
Kansas City, Missouri 64105
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Rights 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:
Harris Trust & Savings Bank
Attn: K.W. Penn
311 West Monroe Street
Chicago, Illinois 60606
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights
Certificate 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 26. Supplements and Amendments.
Prior to the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of Rights
Certificates. From and after the Distribution Date and subject to
the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement, amend,
remove any provision of this Agreement without approval of any
holders of Rights in order: (i) to cure any ambiguity; (ii) to
correct or supplement any provision contained herein that may be
defective or inconsistent with any other provisions herein; (iii) to
shorten or lengthen any time period hereunder (which lengthening or
shortening, following the first occurrence of an event set forth in
clauses (i) and (ii) of the first proviso to Section 23(a) hereof,
shall be effective only if there are Independent Directors and shall
require the concurrence of a majority of such Independent Directors,
or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B)
any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company that states
that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such
supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would
adversely affect its interests under this Agreement.
Notwithstanding anything contained in this Agreement to the
Contrary, no supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase Price or
the number of 1/1,000ths of a share of Preferred Stock for which a
Right is exercisable. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock of the Company.
Section 27. 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 28. Determination and Actions by the Board of Directors,
etc.
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock of the Company outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
the Company of which any Person is the Beneficial Owner, shall be
made in accordance with the provisions of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (and, where specifically provided for
herein, the Independent Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Company
(or, as expressly provided, the Independent Directors), or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board (or, as provided for, by the
Independent Directors) in good faith, shall (i) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the
Rights Certificates and all other parties, and (ii) not subject to
the Board or the Independent Directors to any liability to the
holders of the Rights Certificates.
Section 29. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give any Person
other than the Company, the Rights Agent and the registered holders
of the Rights Certificates any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates.
Section 30. Severability.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right or
redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision requiring a
majority of the Board of Directors of the Company to be Continuing
Directors to act is held by any court of competent jurisdiction or
other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of Directors of the
Company in accordance with applicable law and the Company's
Certificate of Incorporation and By-Laws.
Section 31. Governing Law.
This Agreement, each Rights Certificate and each Right issued
hereunder shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to
contracts to be made a performed entirely within such State, except
for Sections 18, 19, 20 and 21 hereof and relating to the rights,
duties and obligations of the Rights Agent, which shall be governed
by the laws of the State of Illinois without reference to its choice
of law rules.
Section 32. Counterparts.
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but
one and the same instrument.
Section 33. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS HEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
[SEAL] KANSAS CITY SOUTHERN INDUSTRIES,
INC.
Attest:
By /s/ Richard P. Bruening By /s/ Landon H. Rowland
Name: Richard P. Bruening Name: Landon H. Rowland
Title: Vice President, Title: President and
Corporate Secretary and Chief Executive
General Counsel Officer
[SEAL]
Attest:
_________________________________
HARRIS TRUST & SAVINGS BANK
By /s/ Kenneth W. Penn By /s/ Donald W. Koslow
Name: Kenneth W. Penn Name: Donald W. Koslow
(please print) (please print)
Title: Assistant Secretary Title: Vice President
<PAGE>
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
KANSAS CITY SOUTHERN INDUSTRIES, INC.
SERIES A PREFERRED STOCK
Kansas City Southern Industries, Inc., a corporation organized
and existing under and by virtue of The General and Business
Corporation Law of Delaware, DOES HEREBY CERTIFY:
That at a meeting of the Board of Directors of Kansas City
Southern Industries, Inc. the following resolution was duly adopted
creating _________ shares of Preferred Stock, designated as Series
A Preferred Stock.
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation
in accordance with the provisions of the Articles of
Incorporation, as amended, a series of Series A Preferred
Stock of the Corporation be, and it hereby is created, and
the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and
other special rights of such series, and the
qualifications, limitations or restrictions thereof (in
addition to the provisions set forth in the Articles of
Incorporation, as amended, of the Corporation, which are
applicable to the Preferred Stock of all classes and
series) are as follows:
1. Designation and Amount. The shares of such series shall
be designated as "Series A Preferred Stock" and the number of shares
initially constituting such series shall be _______.
2. Dividends and Distributions.
(A) Subject to any prior and superior rights of the
holders of any series of Preferred Stock ranking prior and superior
to the shares of Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock shall be entitled
prior to the payment of any dividends on shares ranking junior to
the Series A Preferred Stock 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 last day of
March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 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, par value $0.01 per share, of the
Corporation (the "Common Stock") or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock, par value $.01 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time after October 12, 1995 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event. Such adjustment shall be made successively
whenever such a dividend or change in the Common Stock is
consummated.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided, that in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per
share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series A Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each 1/1,000th share of Series A Preferred Stock shall
entitle the holder thereof to one vote on all matters voted on at a
meeting of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common
Stock, or (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event. Such
adjustment shall be made successively whenever such a dividend or
change in the Common Stock is consummated.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all
matters voted on at a meeting of stockholders of the Corporation.
(C) Except as set forth herein, holders of Series A
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation ranking
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of capital stock of the Corporation
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any capital stock of the Corporation ranking
on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock; provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any
capital stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration
any shares of capital 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 Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made on any shares of capital stock of the
Corporation that rank junior (whether as to dividends or upon
liquidation, dissolution or winding up) to Series A Preferred unless
prior thereto the holders of Series A Preferred Shares shall have
received an amount equal to 1,000 times the aggregate amount to be
distributed per share to holders of the common stock.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
liquidation preference and the liquidation preferences of all other
series of preferred stock, if any, which rank on a parity with the
Series A Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted
by multiplying such Adjustment 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.
7. Merger; Consolidation, etc. In case the Corporation shall
enter into any merger, consolidation, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series A Preferred
Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of
stock, securities, cash and/or other property (payable in kind), as
the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then, in each such case, the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
9. Ranking. The Series A Preferred Stock shall rank on a
parity with all other series of the Corporation's Preferred Stock as
to the payment of dividends and other distribution of assets, unless
the terms of any such other series shall provide otherwise.
10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner that would
materially alter or change the powers, preferences, rights,
qualifications, limitations and restrictions of the Series A
Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Preferred Stock, voting separately as
a class.
11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share, which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Preferred
Stock.
IN WITNESS HEREOF, this Certificate of Designation is executed
on behalf of the Corporation by its President and attested by its
Secretary this _____ day of __________, 1995.
KANSAS CITY SOUTHERN INDUSTRIES, INC.
By: _____________________________________
President
ATTEST:
________________________
Secretary
<PAGE>
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
Before me, the undersigned Notary Public in and for said county
and state, this day personally appeared ________________, personally
known to me to be the President of KANSAS CITY SOUTHERN INDUSTRIES,
INC. and who executed the foregoing instrument as President of
Kansas City Southern Industries, Inc. and being first duly sworn,
acknowledged reading in full and fully understanding the foregoing,
acknowledged the facts therein stated to be true and correct, and
who further acknowledged the execution of the same as the voluntary
act of the Corporation.
Witness my hand and seal this ____ day of ___________, 1995.
____________________________________
Notary Public
My Commission Expires:
________________________
<PAGE>
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER _________________ OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $________ PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS PRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
This certifies that _______________________________________, or
registered assigns is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement
dated as of September 19, 1995 (the "Rights Agreement") between
Kansas City Southern Industries, a Delaware corporation (the
"Company"), and Harris Trust & Savings Bank, an Illinois banking
corporation (the "Rights Agent"), to purchase from the Company at
any time prior to 5:00 P.M. (Kansas City, Missouri time) on
______________ at the principal office or offices of the Rights
Agent designated for such purpose, or its successors as Rights
Agent, 1/1,000ths of a fully paid nonassessable share of the Series
A Preferred Stock (the "Preferred Stock"), of the Company, at a
purchase price of $_________ per 1/1,000ths of a share (the
"Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per
1/1,000ths share set forth above, are the number and Purchase Price
as of ______________, 1995, based on the Preferred Stock of the
Company as constituted at such date.
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE>
Upon the occurrence of a transaction listed in Section
11(a)(ii) (a "Section 11(a)(ii) Event"), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee
of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a
transferee of a person who after such transfer, became an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities
which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment
upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitation of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices the Rights
Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of 1/1,000ths of a share of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
options at a redemption price of $0.005 per Right.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of 1/1,000ths of a share of
Preferred Stock), but in lieu thereof a cash payment will be made,
as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or, to receive
notice of meetings or other action affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Right
evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of this ____ day of
______________________, 19___.
[SEAL] KANSAS CITY SOUTHERN INDUSTRIES, INC.
By______________________________
Title: President
ATTEST:
____________________________
Title: Secretary
Countersigned:
[RIGHTS AGENT]
By ____________________________
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificates.)
FOR VALUE RECEIVED ___________________________________ hereby
sells, assigns and transfers unto
_________________________________________________________
__________________________________________________________________
____________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
______________________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________________
________________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________________,
_____________________________________
Signature
Signature Guaranteed:
<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires
to exercise Rights represented
by the Rights Certificate)
To: _________________________________
The undersigned hereby irrevocably elects to exercise _____
Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered
to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ________________________, ____
_____________________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who is,
was or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _______________, 19___ ___________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
EXHIBIT C
DETAILED SUMMARY OF RIGHTS TO PURCHASE
SERIES A PREFERRED STOCK
On September 19, 1995, the Board of Directors of Kansas City
Southern Industries, Inc. (the "Company") declared a dividend
distribution of one Right for each outstanding share of the
Company's Common Stock, $0.01 par value per share (the "Common
Stock"), of the Company to the stockholders of record on October 12,
1995, (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company 1/1,000ths of a share of Series
A Preferred Stock (the "Preferred Stock") or in some circumstances,
Common Stock, other securities, cash or other assets as summarized
below at a price of $210.00 per share (the "Purchase Price"), (both
shares and price are subject to adjustment as described below). The
complete terms and conditions of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and
Harris Trust & Savings Bank, as Rights Agent, dated as of September
19, 1995, as may be amended from time to time. Capitalized terms
not defined herein are defined in the Rights Agreement.
Each share outstanding on the Record Date will receive one
Right. Until the Distribution Date (or the earlier redemption or
expiration of the Rights), shares of Common Stock issued (whether
newly issued or from treasury) will have the Rights automatically
attached. Following the Distribution Date, shares of Common Stock
issued will be accompanied by Rights only in certain instances.
In the event that a Person or group of affiliated or associated
persons (an "Acquiring Person") becomes the beneficial owner of or
announces a tender or exchange offer for 20 percent or more of the
outstanding shares of Common Stock of the Company (or 15 percent in
the case the Independent Directors determine such Person is an
"Adverse Person"), proper provision shall be made so that each
holder of a Right, other than of Rights that are or were
beneficially owned by the Acquiring Person (which will thereafter be
null and void), will thereafter have the right to receive upon
exercise that number of shares of the Preferred Stock (or in certain
circumstances, Common Stock or assets or other securities of the
Company) having a market value of two times the exercise price of
the Right. In the event that the Company were acquired in a merger
or other business combination transaction (other than pursuant to a
Permitted Offer) or more than 50 percent of the Company's (together
with its subsidiaries) its assets or earning power were sold, proper
provision shall be made so that each holder of a Right, other than
of Rights that are or were beneficially owned by an Acquiring Person
(which will thereafter be null and void) shall thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of the highest
priority voting securities of the acquiring company (or certain of
its affiliates) that at the time of such transaction would have a
market value of two times the exercise price of the Right. If the
Rights are exercised to acquire the Preferred Stock, then the Rights
will not be exercisable to acquire the securities of any Acquiring
Person.
Until ten calendar days following the earlier to occur of
(unless extended by the Board of Directors and subject to the
earlier redemption or expiration of the Rights): (i) the date of a
public announcement that an Acquiring Person acquired, or obtained
the right to acquire, beneficial ownership of 20 percent or more of
the outstanding shares of the Common Stock of the Company (or 15
percent in the case the Independent Directors determine such Person
is an "Adverse Person"), or (ii) the commencement or announcement of
an intention to make a tender offer or exchange offer (other than a
Permitted Offer) that would result in an Acquiring Person
beneficially owning 20 percent or more of such outstanding shares of
Common Stock of the Company (or 15 percent in the case the
Independent Directors determine such Person is an "Adverse
Person")(the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Company's Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate. The certificates for shares
of Common Stock issued after the Record Date, but prior to the
Distribution Date will have a notation referencing the Rights
Agreement. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with
the Company's Common Stock, and until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates
outstanding as of the Record Date, will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date
and such separate Rights Certificates alone will evidence the
Rights.
Permitted Offer is defined in the Rights Agreement as a tender
offer that is for all outstanding Common Stock of the Company at a
price and on terms determined to be adequate prior to the purchase
of shares under such tender or exchange offer, by at least a
majority of the Independent Directors, taking into account all
factors that such directors deem relevant including, without
limitation, prices that could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realize
maximum value and otherwise in the best interests of the Company and
its stockholders (other than the Person or any Affiliate or
Associate thereof for whose benefit the offer is being made).
An Independent Director means any member of the Board of
Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate and was a member of the
Board prior to the Share Acquisition Date, and any successor of an
Independent Director, while such successor is a member of the Board,
who is not an Acquiring Person, an Affiliate or Associate of an
Acquiring Person, or representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and who is recommended
or elected to succeed the Independent Director by a majority of the
remaining Independent Directors.
The Purchase Price payable, and the number of shares of
Preferred Stock (or Common Stock, other securities, cash or other
assets, as the case may be) 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 shares of the Preferred Stock or convertible
securities at less than the 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 out of earnings or retained earnings or
dividends payable in the Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1 percent in such Purchase Price. No fractional shares
will be issued (other than fractional shares which are integral
multiples of 1/1,000ths of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last Trading Date prior to the
date of exercise.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on October 12, 2005, unless earlier redeemed
by the Company as described below.
At any time prior to 5:00 p.m. Kansas City, Missouri time on
the tenth calendar day after the first date after the public
announcement that an Acquiring Person has acquired beneficial
ownership of 20 percent (or 15 percent in some instances) or more of
the outstanding shares of the Common Stock of the Company (the
"Share Acquisition Date"), the Company may redeem the Rights in
whole, but not in part, at a price of $0.005 per Right (the
"Redemption Price"). Following the Share Acquisition Date, but
prior to an event listed in Section 13(a) of the Rights Agreement
(i.e. a merger, consolidation or sale of more than 50 percent of the
assets or earnings power of the Company and its subsidiaries), the
Company may redeem the Rights in connection with any event specified
in Section 13(a) in which all stockholders are treated alike and
which does not include the Acquiring Person or its Affiliates or
Associates. In addition, the Company's right of redemption may be
reinstated following an inadvertent trigger of the Rights (as
determined by the Board) if an Acquiring Person reduces its
beneficial ownership to 10 percent or less of the outstanding shares
of Common Stock of the Company in a transaction or series of
transactions not involving the Company. Immediately upon the action
of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the
Redemption Price.
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. While the
distribution of the Rights will not be taxable to stockholders of
the Company, stockholders may, depending on the circumstances,
recognize taxable income in the event that the Rights become
exercisable for the Preferred Stock (or other securities, as the
case may be) of the Company.
Prior to the Distribution Date the Company may amend or
supplement any provision of the Rights Agreement without the consent
of the holders of the Rights. Following the Distribution Date, the
Company may amend the provisions of the Rights Agreement in order to
cure any ambiguity, to correct any defect or inconsistency, to make
changes deemed necessary or desirable so long as such changes do not
adversely affect the interests of the holders of the Rights
(excluding the interests of any Acquiring Person and its affiliates
and associates). In either case, however, the Company may not amend
or supplement the Rights Agreement to change or supplement the
Redemption Price, Final Expiration Date, the Purchase Price or the
number of 1/1,000ths of a share of Preferred Stock for which a Right
is exercisable.
The Rights may have the effect of impeding a change in control
of the Company without the prior consent of the Company's Board of
Directors, and the Rights could cause substantial dilution to a
person that attempts to acquire the Company without conditioning the
offer on redemption of the Rights by the Company's Board of
Directors or on the acquisition by such person of a substantial
number of Rights. The Rights will not interfere with any Permitted
Offer for all of the outstanding Common Stock that has the approval
of the Independent Directors.
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 ____________, 1995. A copy of the
Rights Agreement is available free of charge from the Company by
written request to Kansas City Southern Industries Inc., 114 West
11th Street, Kansas City, Missouri 64105. This summary description
of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference. In the event of a conflict
between this summary and the Rights Agreement, the Rights Agreement
will prevail.
