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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
LINDBERG CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1391480
(State of Incorporation) (I.R.S. Employer Identification No.)
6133 North River Road, Suite 700, Rosemont, Illinois 60018
(Address of principal executive offices including zip code)
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act: Rights
to Purchase Common Shares
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On November 21, 1996, the Board of Directors of Lindberg Corporation (the
"Company") declared a dividend of one common share purchase right (a "Right")
for each outstanding share of common stock, par value $2.50 per share, of the
Company (the "Common Stock"). The dividend is payable on December 13, 1996
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one share of Common
Stock at a price of $40.00 per share of Common Stock (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement dated as of November 21, 1996, as may be amended from
time to time (the "Rights
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Agreement"), between the Company and Harris Trust and Savings Bank, as Rights
Agent (the "Rights Agent"). Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (with certain exceptions, an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the outstanding shares of
Common Stock or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any person or group
of affiliated persons becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 20% or more of the outstanding shares of Common Stock (the earlier
of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate together with a copy of a
Summary of Rights which is an exhibit to the Rights Agreement.
The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier expiration of
the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of the Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 21, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights is 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 Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for or purchase Common Stock at a price, or securities
convertible into Common Stock with a conversion price, less than the
then-current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Common Stock) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights is subject to adjustment in the event of
a stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions,
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consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right either (i)
upon payment of an amount equal to the Purchase Price multiplied by the number
of shares of Common Stock for which a Right was exercisable immediately prior
to such event, that number of shares of Common Stock having a market value
equal to two times such adjusted Purchase Price, or (ii) upon payment of the
then par value (at present $2.50) of a share of Common Stock per share of
Common Stock, a pro rata portion of the number of shares of Common Stock
available to be purchased from the Company, in the event that the number of
such available shares is less than the aggregate number of shares of Common
Stock that would be purchasable pursuant to the foregoing clause (i) upon
exercise of all exercisable Rights then outstanding.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise of a Right and payment
of the Purchase Price adjusted as described in clause (i) of the preceding
paragraph, that number of shares of common stock of the person with whom the
Company has engaged in the foregoing transaction (or its parent) that at the
time of such transaction have a market value of two times the adjusted Purchase
Price.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier to occur of one of the events described in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person which
will have become void) for shares of Common Stock at an exchange ratio equal to
one share of Common Stock per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued and in
lieu thereof an adjustment in cash will be made based on the current market
price of the Common Stock.
At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
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For so long as the Rights are then redeemable, the Company may, except
with respect to the redemption price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with
respect to the redemption price, amend the Rights Agreement in any manner that
does not adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in certain circumstances. Accordingly, the existence of the Rights may deter
certain acquirors from making takeover proposals or tender offers. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors of the Company since the Board of Directors may, at its
option, at any time prior to the time an Acquiring Person becomes such, redeem
all but not less than all the then outstanding Rights at the Redemption Price.
As of November 30, 1996, there were 4,778,791 shares of Common Stock
outstanding, 894,606 shares of Common Stock in the Company's treasury and
390,575 shares reserved for issuance upon the exercise of stock options. The
Company intends that at all times following the Record Date, so long as any
Rights are outstanding, there be reserved for issuance pursuant to the Rights
Agreement that number of shares of Common Stock (i.e., one share for each Right
prior to there becoming an Acquiring Person) sufficient to permit the exercise
of all outstanding Rights (without giving effect to certain adjustments
permitted under the Rights Agreement).
A copy of the Rights Agreement has been filed as an exhibit to this
Registration Statement. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
ITEM 2. EXHIBITS
1. Rights Agreement dated as of November 21, 1996, between Lindberg
Corporation and Harris Trust and Savings Bank, as Rights Agent, which includes
as exhibits, the form of Rights Certificate and the Summary of Rights to
Purchase Shares of Common Stock of Lindberg Corporation.
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SIGNATURES
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 hereunto duly authorized.
LINDBERG CORPORATION
/s/STEPHEN S. PENLEY
-------------------------
By: Stephen S. Penley
Senior Vice President
Date: December 6, 1996
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Exhibit 99.1
LINDBERG CORPORATION and HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
RIGHTS AGREEMENT
Dated as of November 21, 1996
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TABLE OF CONTENTS
<TABLE>
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Page
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Section 1. Certain Definitions................................................... 1
Section 2. Appointment of Rights Agent........................................... 6
Section 3. Issue of Right Certificates........................................... 6
Section 4. Form of Right Certificates............................................ 8
Section 5. Countersignature and Registration..................................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates............ 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights......... 10
Section 8. Cancellation and Destruction of Right Certificates.................... 11
Section 9. Availability of Shares of Common Stock................................ 11
Section 10. Common Stock Record Date............................................. 12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights ................................................................ 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........... 20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 20
Section 14. Fractional Rights and Fractional Shares.............................. 24
Section 15. Rights of Action..................................................... 25
Section 16. Agreement of Right Holders........................................... 26
Section 17. Right Certificate Holder Not Deemed a Stockholder.................... 26
Section 18. Concerning the Rights Agent.......................................... 26
Section 19. Merger or Consolidation or Change of Name of Rights Agent............ 27
Section 20. Duties of Rights Agent............................................... 28
Section 21. Change of Rights Agent............................................... 30
</TABLE>
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<TABLE>
<CAPTION>
Page
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Section 22. Issuance of New Right Certificates.................................... 31
Section 23. Redemption............................................................ 31
Section 24. Exchange.............................................................. 32
Section 25. Certificate of Incorporation.......................................... 32
Section 26. Notice of Certain Events.............................................. 33
Section 27. Notices............................................................... 33
Section 28. Supplements and Amendments............................................ 34
Section 29. Successors............................................................ 35
Section 30. Benefits of this Agreement............................................ 35
Section 31. Determinations and Actions by the Board of Directors.................. 35
Section 32. Severability.......................................................... 35
Section 33. Governing Law......................................................... 35
Section 34. Counterparts.......................................................... 35
Section 35. Descriptive Headings.................................................. 36
</TABLE>
Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights to Purchase Shares of Common Stock of
Lindberg Corporation
ii
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RIGHTS AGREEMENT
Rights Agreement, dated as of November 21, 1996 ("Agreement"), between
Lindberg Corporation, a Delaware corporation (the "Company"), and Harris Trust
and Savings Bank, an Illinois banking corporation, as Rights Agent (the "Rights
Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one common share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding as of the
Close of Business (as defined below) on December 13, 1996 (the "Record Date"),
each Right representing the right to purchase one share of Common Stock
(subject to adjustment) upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right
(subject to adjustment) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to shares of Common Stock that
shall become outstanding after the Distribution Date and prior to the
Expiration Date in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 20% or more of the shares of Common Stock
then outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined); provided, however, that (i) if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" became such inadvertently (including,
without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of Common Stock that would otherwise
cause such Person to be an "Acquiring Person" or (B) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the consequences of such Beneficial Ownership
under this Agreement) and without any intention of changing or
influencing control of the Company, and if such Person as promptly as
practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person," then such Person shall not be deemed to
be or to have become an "Acquiring Person" for any purposes of this
Agreement; (ii) if, as of the date hereof, any Person is the Beneficial
Owner of 20% or more of the shares of Common Stock outstanding, such
Person shall not be or become an "Acquiring Person" unless and until such
time as such Person shall become the
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Beneficial Owner of additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock in shares of Common Stock or pursuant to a split
or subdivision of the outstanding Common Stock), unless, upon becoming
the Beneficial Owner of such additional shares of Common Stock, such
Person is not then the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding; and (iii) no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of Common
Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares of Common Stock beneficially
owned by such Person to 20% or more of the shares of Common Stock then
outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and shall
thereafter become the Beneficial Owner of any additional shares of Common
Stock (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Stock in shares of Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), then
such Person shall be deemed to be an "Acquiring Person" unless upon
becoming the Beneficial Owner of such additional shares of Common Stock
such Person does not beneficially own 20% or more of the shares of Common
Stock then outstanding. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person
is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date hereof.
(c) "Available Number" shall have the meaning set forth in Section
11(a)(iii) hereof.
(d) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
directly or indirectly, within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act as
in effect on the date hereof;
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(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect
to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y)
securities which such Person has a right to acquire upon the
exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person or (z) securities
issuable upon the exercise of Rights from and after the time
that any Person becomes an Acquiring Person if such Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) or Section 11(n) with
respect to an adjustment to Original Rights; or (B) the
right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person and with respect to which
such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(d)(ii)(B) hereof) or disposing of such
securities of the Company; provided, however, that no Person
who is an officer, director or employee of an Exempt Person
shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have
"Beneficial
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Ownership" of or to "beneficially own" any securities that
are "beneficially owned" (as defined in this Section 1(d)),
including, without limitation, in a fiduciary capacity, by
an Exempt Person or by any other such officer, director or
employee of an Exempt Person.
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of Illinois or
the city in which the principal office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Chicago, Illinois time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Chicago, Illinois
time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall
mean the common stock, currently par value $2.50 per share, of the
Company. "Common Stock" when used with reference to any Person other
than the Company shall mean the common stock (or, in the case of an
unincorporated entity, the equivalent equity interest) with the greatest
voting power of such other Person or, if such other Person is a
subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(i) "Equivalent Common Shares" shall have the meaning set forth in
Section 11(b) hereof.
(j) "Exercisable Rights" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Exempt Person" shall mean the Company or any Subsidiary (as
such term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity or
trustee holding Common Stock for or pursuant to the terms of any such
plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any Subsidiary of
the Company.
(l) "Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
(m) "Expiration Date" shall have the meaning set forth in Section 7
hereof.
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(n) "Flip-In Event" shall have the meaning set forth in Section
11(a)(ii) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(p) "NASDAQ" shall mean The NASDAQ Stock Market.
(q) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(r) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) to such entity.
(s) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(t) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(u) "Redemption Price" shall have the meaning set forth in Section
23 hereof.
(v) "Right Certificate" shall have the meaning set forth in Section
3 hereof.
(w) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(x) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such, or such earlier date as a majority of the Board
of Directors shall become aware of the existence of an Acquiring Person.
(y) "Subsidiary" of any Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or
other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person, and any corporation or other
entity that is otherwise controlled by such Person.
(z) "Summary of Rights" shall have the meaning set forth in Section
3 hereof.
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(aa) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
be the holders of Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the tenth day
after the Stock Acquisition Date or (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or of
the first public announce-ment of the intention of such Person (other
than an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an Exempt
Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 20% or more of the Common Stock then outstanding (the earlier
of such dates being herein referred to as the "Distribution Date",
provided, however, that if either of such dates occurs after the date of
this Agreement and on or prior to the Record Date, then the Distribution
Date shall be the Record Date), (x) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common
Stock registered in the names of the holders thereof and not by separate
Right Certificates, and (y) the Rights will be transferable only in
connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person),
at the address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of
Common Stock, in substantially the form of Exhibit B hereto (the "Summary
of Rights"), by first-class, postage-prepaid mail, to each record holder
of Common Stock as of the Close of Business on the Record Date (other
than any Acquiring
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Person or any Associate or Affiliate of any Acquiring Person), at the
address of such holder shown on the records of the Company. With respect
to certificates for Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with the Summary
of Rights. Until the Distribution Date (or, if earlier, the Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the Summary of
Rights, shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or reissuance of Common
Stock out of authorized but unissued shares) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement
between Lindberg Corporation (the "Company") and Harris
Trust and Savings Bank, as Rights Agent, dated as of
November 21, 1996 as the same may be amended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights
owned by or transferred to any Person who is or becomes an
Acquiring Person (as defined in the Rights Agreement) and
certain transferees thereof will become null and void and
will no longer be transferable.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate, except as
otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.
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Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of
any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or interdealer quotation system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of shares of Common Stock as shall be set forth
therein at the price per whole share of Common Stock set forth therein (the
"Purchase Price"), but the number of such shares of Common Stock and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board, the President or any Vice President
of the Company, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof and shall be
attested by the Secretary or any Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
Person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purpose,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right
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Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii), 13 and 14
hereof, at any time after the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of shares of Common Stock
as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or agency of
the Rights Agent designated for such purpose. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any
time after the Distribution Date and prior to the Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to
the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to Section 11(a)(ii) hereof
and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office or agency of
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<PAGE> 13
the Rights Agent designated for such purpose, together with payment of
the aggregate Purchase Price with respect to the total number of shares
of Common Stock (or other securities, cash or other assets, as the case
may be) as to which the Rights are exercised, at any time which is both
after the Distribution Date and prior to the time (the "Expiration Date")
that is the earliest of (i) the Close of Business on November 21, 2006
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or
(iii) the time at which such Rights are exchanged as provided in Section
24 hereof.
(b) The Purchase Price shall be initially $40.00 for each whole
share of Common Stock purchasable upon the exercise of Rights. The
Purchase Price and the number of shares of Common Stock or other
securities or property to be acquired upon exercise of Rights shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the shares of Common Stock to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9(e) hereof, in cash or by
certified check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) requisition
from any transfer agent of the Common Stock certificates for the number
of shares of Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) promptly after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all of the
Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the exercisable Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.
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<PAGE> 14
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of
assignment or form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such transfer or exercise and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company.
Section 9. Availability of Shares of Common Stock.
(a) The Company covenants and agrees that, from and after such time
as the Rights become exercisable, the Company shall use its best efforts
to cause to be reserved and kept available out of its authorized and
unissued shares of Common Stock or any shares of Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock issuable upon the exercise
of Rights may be listed or admitted to trading on any national securities
exchange, or quoted on NASDAQ, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed or admitted to trading on
such exchange, or quoted on NASDAQ, upon official notice of issuance upon
such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the
issuance of shares of Common Stock upon the exercise of Rights, to
register and qualify such shares of Common Stock under the Securities Act
and any applicable state securities or "Blue Sky" laws (to the extent
exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible
after such filing and keep such registration and
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<PAGE> 15
qualifications effective until the earlier of the date as of which the
Rights are no longer exercisable for such securities and the Expiration
Date. The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall notify the
Rights Agent and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
notice to the Rights Agent and a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained and until a registration statement under the
Securities Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates therefor (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable
shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Common Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of
certificates for Common Stock in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates for Common Stock
upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by that holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for Common Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Common Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Common Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of
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<PAGE> 16
a Right Certificate shall not be entitled to any rights of a holder of Common
Stock for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights. The Purchase Price, the number of shares of Common Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare and pay a dividend on the Common Stock payable
in shares of Common Stock, (B) subdivide the outstanding Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares
of Common Stock or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company
were open, the holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination
or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Sections 24 and 25 of this Agreement, in the event
any Person becomes an Acquiring Person (the first occurrence of such
event being referred to hereinafter as the "Flip-In Event"), then (A) the
Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of shares
of Common Stock for which a Right was exercisable immediately prior to
such Flip-In Event, whether or not such Right was then exercisable, and
(B) each holder of a Right, except as otherwise provided in this Section
11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right
to receive, upon exercise thereof at a price equal to the Purchase Price
(as so adjusted), in accordance with the terms of this Agreement, such
number of shares of Common Stock as shall equal the result obtained by
dividing the Purchase Price (as so adjusted) by 50% of the current per
share market price of the Common Stock (determined pursuant to Section
11(d)
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<PAGE> 17
hereof) on the date of such Flip-In Event; provided, however, that the
Purchase Price (as so adjusted) and the number of shares of Common Stock
so receivable upon exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as appropriate in accordance with
Sections 11(a)(i), 11(b), 11(c), 11(h) and 11(m) hereof. Notwithstanding
anything in this Agreement to the contrary, however, from and after the
Flip-In Event, any Rights that are beneficially owned by (x) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person),
(y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Flip-In Event or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the Flip-In Event
pursuant to either (I) a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights
or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees of
such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) and Section 11(a)(iii) are complied
with, but shall have no liability to any holder of Right 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 hereunder. From and after the Flip-In Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be cancelled. From and after
the occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exercised pursuant to this Section
11(a)(ii) or Section 11(a)(iii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii) or
Section 11(a)(iii).
(iii) Subject to Sections 24 and 25 of this Agreement, upon the
occurrence of the Flip-In Event, if the number (the "Available Number")
of shares of Common Stock that, upon the occurrence of the Flip-In Event,
are authorized but unissued or held as treasury shares and not reserved,
subscribed for or otherwise committed to be issued (in each case, other
than pursuant to this Agreement), is less than the aggregate number of
shares of Common Stock receivable upon exercise of all then outstanding
and exercisable Rights (which shall not include Rights that become void
pursuant to the provisions of the second sentence of Section 11(a)(ii)
hereof) ("Exercisable Rights") pursuant to clause (B) of the first
sentence of Section 11(a)(ii) hereof, then, in lieu of the
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<PAGE> 18
adjustment and exercise right provided for in the first sentence of
Section 11(a)(ii) hereof, (A) the Purchase Price shall be adjusted to be
$2.50 (or such other amount as then constitutes the par value of a share
of Common Stock) per whole share of Common Stock, and (B) each holder of
an Exercisable Right shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted),
in accordance with the terms of this Agreement, such number of shares of
Common Stock as shall equal the result obtained by dividing the Available
Number by the number of Exercisable Rights outstanding upon the
occurrence of the Flip-In Event.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock (or shares having the same rights
and privileges as the Common Stock ("Equivalent Common Shares")) or
securities convertible into Common Stock or Equivalent Common Shares at a
price per share of Common Stock or Equivalent Common Shares (or having a
conversion price per share, if a security convertible into shares of
Common Stock or Equivalent Common Shares) less than the then current per
share market price of the Common Stock (determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock and
Equivalent Common Shares outstanding on such record date plus the number
of shares of Common Stock and Equivalent Common Shares which the
aggregate offering price of the total number of shares of Common Stock
and/or Equivalent Common Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of which
shall be the number of shares of Common Stock and Equivalent Common
Shares outstanding on such record date plus the number of additional
shares of Common Stock and/or Equivalent Common Shares to be offered for
subscription or purchase (or into which the convertible securities so to
be offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent.
Shares of Common Stock and Equivalent Common Shares owned by or held
for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights, options
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<PAGE> 19
or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Common Stock (determined pursuant to Section 11(d)
hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to one share of
Common Stock, and the denominator of which shall be such current per
share market price (determined pursuant to Section 11(d) hereof) of the
Common Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any
security (a "Security") for the purpose of this Section 11(d)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or reclassification
of such Security, and prior to the expiration of 30 Trading Days after
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case
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<PAGE> 20
as reported by the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Security, the "current per
share market price" of the Security shall mean the fair value thereof 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. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted
to trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange, a
Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one-hundredth of a share of Common Stock or other share or
security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
the Common Stock, thereafter the Purchase Price and the number of such
other shares so receivable upon exercise of a Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in this Section 11, and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
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<PAGE> 21
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of shares of Common Stock (calculated to the nearest
one-hundredth of a share of Common Stock) obtained by (i) multiplying (x)
the number of shares purchasable upon the exercise of a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust
the number of Rights, in substitution for any adjustment in the number of
shares of Common Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-hundredth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall
notify the Rights Agent and 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. Such record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
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<PAGE> 22
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Common Stock issuable upon the exercise of a
Right, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares of Common
Stock which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of
Common Stock or other shares of capital stock issuable upon exercise of a
Right, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common
Stock or other such shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event issuing to the holder of any Right exercised
after such record date the Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price,
in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Common
Stock, issuance wholly for cash of any shares of Common Stock at less
than the current market price, issuance wholly for cash of Common Stock
or securities which by their terms are convertible into or exchangeable
for Common Stock, dividends on Common Stock payable in shares of Common
Stock or issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of its Common
Stock shall not be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that at any time after the date of this Agreement and prior to
the
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Distribution Date, the Company shall (i) declare and pay any dividend on
the Common Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of a dividend payable in Common Stock) into a
greater or lesser number of shares of Common Stock, then, in each such
case, the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such
event.
(o) The Company agrees that, after the earlier of the Distribution
Date or the occurrence of the Flip-In Event, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will materially diminish or eliminate the
benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 26 hereof (if so required under
Section 26 hereof). The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate and shall not be responsible for calculating any
adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event, directly or indirectly, at any time after the
occurrence of the Flip-In Event (i) the Company shall consolidate with or
shall merge into any other Person, (ii) any Person shall merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or
part of the Common Stock shall be changed into or exchanged for stock or
other securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
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transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person (other than the
Company or one or more wholly-owned Subsidiaries of the Company), then,
upon the first occurrence of such event, proper provision shall be made
so that: (A) each holder of an Exercisable Right shall thereafter have
the right to receive, upon the exercise thereof at the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof), in
accordance with the terms of this Agreement and in lieu of shares of
Common Stock of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall equal the result obtained by dividing the
Purchase Price (as theretofore adjusted in accordance with Section
11(a)(ii) hereof) by 50% of the current per share market price of the
Common Stock of such Principal Party (determined pursuant to Section
11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, however, that the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the
number of shares of Common Stock of such Principal Party so receivable
upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any events
occurring in respect of the Common Stock of such Principal Party after
the occurrence of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such Principal
Party; and (D) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its shares of
Common Stock in accordance with Section 9 hereof) in connection with such
consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; provided that,
upon the subsequent occurrence of any consolidation, merger, sale or
transfer of assets or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as
provided in this Section 13(a), such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had
such holder, at the time of such transaction, owned the Common Stock of
the Principal Party receivable upon the exercise of a Right pursuant to
this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property.
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<PAGE> 25
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which the
shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer,
the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or
(B) if no securities are so issued, (x) the Person that is
the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the
Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger
(including the Company, if it survives) or (z) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence in Section 13(a) hereof, the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such
Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; provided,
however, that in any such case described in the foregoing
clause (b)(i) or (b)(ii), if the Common Stock of such Person
is not at such time, has not been continuously over the
preceding 12-month period or as result of such transaction
will not be, registered under Section 12 of the Exchange
Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is,
has been and will be so registered, the term "Principal
Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stock of all of which is, has been
and will be so registered, the term "Principal Party" shall
refer to whichever of such Persons is the issuer of Common
Stock having the greatest aggregate market value of shares
outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the
venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint
22
<PAGE> 26
venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) hereof unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale
or transfer of assets shall not result in a default by the Principal
Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and providing
that, as soon as practicable after executing such agreement pursuant to
this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on
the New York Stock Exchange or on another national
securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York
Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a
national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or on such other system
then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form
10 (or any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
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<PAGE> 27
(d) In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or by-laws
or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue (other
than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred
to in this Section 13, shares of Common Stock or Equivalent Common Shares
of such Principal Party at less than the then current market price per
share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock or Equivalent Common
Shares of such Principal Party at less than such then current market
price, or (ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then, in such
event, the Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been cancelled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of,
the consummation of the proposed transaction. The Rights Agent shall
have no duty to require the Principal Party to execute or deliver a
supplemental agreement as set forth in Section 13.
(e) The Company covenants and agrees that it shall not, at any time
after the Flip-In Event, enter into any transaction of the type described
in clauses (i) through (iii) of Section 13(a) hereof if (i) at the time
of or immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other instruments or
securities outstanding or agreements or charter or bylaw provisions in
effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of
Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights
(except prior to the Distribution Date in accordance with Section 11(n)
hereof). In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market
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<PAGE> 28
value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price
for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock upon the exercise or exchange of Rights. In lieu
of such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of a whole
share of Common Stock (as determined in accordance with Section 14(a)
hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the
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<PAGE> 29
Rights evidenced by such Right Certificate (or, prior to the Distribution Date,
such Common Stock) in the manner provided therein and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date,
the Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the Common Stock
certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common Stock or any other
securities of the Company which may at any time be issuable on the exercise or
exchange of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised or exchanged 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
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<PAGE> 30
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 or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom.
The indemnity provided for herein shall survive the expiration of the
Rights and the termination of this Agreement. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the
Company.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate trust powers of
the Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto;
provided, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
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<PAGE> 31
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name and in
all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions (and no implied duties or obligations shall be read into this
Agreement against the Rights Agent), by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter, including, without
limitation, the identity of an Acquiring Person and the determination of
the current market price of any Security (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 or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or
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<PAGE> 32
execution of any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights provided for in
Sections 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence
of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
receipt of a certificate furnished pursuant to Section 12 hereof,
describing such change or adjustment, or actual knowledge that the
exercised Rights are void pursuant to Section 11(a)(ii) hereof); 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 other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Common Stock or other
securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any person reasonably believed by the Rights Agent to be any one of the
Chairman of the Board, the President, any Vice President or the Secretary
of the Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions.
(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,
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<PAGE> 33
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has not been completed to certify
the holder is not an Acquiring Person (or an Affiliate or Associate
thereof), the Rights Agent shall not take any further action with respect
to such requested exercise or 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
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or the laws of any state
of the United States or the District of Columbia, in good standing, having an
office in the State of Illinois, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
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<PAGE> 34
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
forms as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and
prior to the Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
earlier of the Distribution Date or the occurrence of the Flip-In Event, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any time prior to
the Flip-In Event, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (the redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in cash, shares of
Common Stock, or such other form of consideration as the Board of
Directors shall determine.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to paragraph (a) of this Section 23
(or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and
without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive
the Redemption Price. The Company shall promptly give notice to the
Rights Agent and public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action
of the Board of Directors ordering the redemption of the Rights (or such
later time as the Board of Directors may establish for the effectiveness
of such redemption), the Company shall mail a notice of redemption to all
the holders of the then
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<PAGE> 35
outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the
Redemption Price will be made.
Section 24. Exchange.
(a) Subject to Section 25 of this Agreement, the Board of Directors
of the Company may, at its option, at any time after the occurrence of
the Flip-In Event and prior to the occurrence of an event described in
Section 13(a) hereof, exchange all or part of the then outstanding
Exercisable Rights for Common Stock at an exchange ratio equal to one
share of Common Stock for each Exercisable Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such amount per Right being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any
time after an Acquiring Person shall have become the Beneficial Owner of
shares of Common Stock aggregating 50% or more of the shares of Common
Stock then outstanding. The exchange of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of Rights so
exchanged multiplied by the Exchange Ratio. The Company shall promptly
give notice to the Rights Agent and public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Exercisable Rights held by each holder of Rights.
Section 25. Certificate of Incorporation. Anything in this Agreement to
the contrary notwithstanding, the rights and obligations of the Company and its
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<PAGE> 36
stockholders under this Agreement shall be subject to the provisions of the
Company's certificate of incorporation, including, without limitation, the
provisions of Article Eleventh thereof, as such certificate of incorporation
may be amended from time to time.
Section 26. Notice of Certain Events.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock of any class to the holders of its Common Stock
or to make any other distribution to the holders of its Common Stock
(other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision or combination of outstanding Common
Stock), (iv) to effect the liquidation, dissolution or winding up of the
Company, or (v) to effect a subdivision, combination or consolidation of
the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company shall
give to each holder of a Right Certificate, in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of rights
or warrants, or the date on which such liquidation, dissolution or
winding up is to take place and the date of participation therein by the
holders of the Common Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least 10 days prior to the record date for determining
holders of the Common Stock for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of the Common Stock, whichever shall be the earlier.
(b) In case any event described in Sections 11(a)(ii), 11(a)(iii) or
13 hereof shall occur then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate (or if occurring
prior to the Distribution Date, the holders of the Common Stock) in
accordance with Section 25 hereof, a notice of the occurrence of such
event, which notice shall describe such event and the consequences of
such event to holders of Rights.
Section 27. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
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<PAGE> 37
Lindberg Corporation
6133 River Road, Suite 700
Rosemont, Illinois 60018
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sent by
registered or certified mail (and shall be deemed given upon receipt thereof),
addressed (until another address is filed in writing with the Company) as
follows:
Harris Trust and Savings Bank
311 West Monroe Street, 14th Floor
Chicago, Illinois 60690
Attention: Tod Shafer
Vice President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 28. Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 28, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of the
Rights. At any time when the Rights are no longer redeemable, except as
provided in the penultimate sentence of this Section 28, the Company may, and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order to (i) cure
any ambiguity, (ii) correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision herein, (iii) shorten
or lengthen any time period hereunder, or (iv) change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable; provided that no such supplement or amendment shall adversely affect
the interests of the holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person) or the rights or duties of
the Rights Agent, and no such amendment may cause the Rights again to become
redeemable or cause the Agreement again to become amendable other than in
accordance with this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 28, the Rights Agent
shall execute such supplement or amendment.
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<PAGE> 38
Section 29. 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 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 31. Determinations and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights, as such, and all other parties, and (y) not subject
the Board of Directors to any liability to the holders of the Rights.
Section 32. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of 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 and
performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
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<PAGE> 39
Section 35. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
LINDBERG CORPORATION
By: /s/ Leo C. Thompson
-----------------------
Name: Leo C. Thompson
Title: President
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Tod Shafer
-----------------------
Name: Tod Shafer
Title: Vice President
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<PAGE> 40
Exhibit A
Form of Right Certificate
Certificate No. R-______ _______ Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2006 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL
NO LONGER BE TRANSFERABLE.
Right Certificate
LINDBERG CORPORATION
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 November 21, 1996, as the same may be amended
from time to time (the "Rights Agreement"), between Lindberg Corporation, a
Delaware corporation (the "Company"), and Harris Trust and Savings Bank, as
Rights Agent (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., Chicago, Illinois time, on November 21, 2006, at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one share of common stock, par value $2.50 per share
(the "Common Stock"), of the Company at a purchase price of $40.00 per whole
share of Common Stock (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Rights Certificate (and the number of
shares of Common Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of November 21, 1996, based on the Common Stock as constituted at such
date. As provided in the Rights Agreement, the Purchase Price, the number of
shares of Common Stock (or other securities or property) which may be purchased
upon the exercise of the Rights and the number of Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the happening
of certain events.
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<PAGE> 41
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Common Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged for shares of Common Stock.
No fractional shares of Common Stock will be issued upon the exercise or
exchange of any Right or Rights evidenced hereby but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Stock
or of any other securities of the Company which may at any time be issuable on
the exercise or exchange hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised or exchanged as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE> 42
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _________ __, 199_/200_.
ATTEST: LINDBERG CORPORATION
_______________________________ By:_____________________________
[Title] [Title]
Countersigned:
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By_____________________________
[Title]
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<PAGE> 43
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto
________________________________________________________________________________
________ (Please print name and address of transferee)
____________________________________________ Rights represented by this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________ Attorney, to
transfer said Rights on the books of the within-named Company, with full power
of substitution.
Dated: _____________________
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
___________________________________
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being assigned to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
___________________________________
Signature
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<PAGE> 44
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To LINDBERG CORPORATION:
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the shares of Common Stock
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such shares of Common Stock (or such other
securities) be issued in the name of:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated:________________________
_________________________________
Signature
(Signature must conform to holder
specified on Right Certificate)
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<PAGE> 45
Form of Reverse Side of Right Certificate - continued
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
________________________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by, and were not acquired by the undersigned from,
an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
__________________________________
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.
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<PAGE> 46
Exhibit B
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER
BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF COMMON STOCK OF
LINDBERG CORPORATION
On November 21, 1996, the Board of Directors of Lindberg Corporation (the
"Company") declared a dividend of one common share purchase right (a "Right")
for each outstanding share of common stock, par value $2.50 per share, of the
Company (the "Common Stock"). The dividend is payable on December 13, 1996
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one share of Common
Stock at a price of $40.00 per whole share of Common Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement dated as of November 21, 1996, as the same may
be amended from time to time (the "Rights Agreement"), between the Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (with certain
exceptions, an "Acquiring Person") has acquired beneficial ownership of 20% or
more of the outstanding shares of Common Stock or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 20% or more of the outstanding
shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuances of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the
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<PAGE> 47
Rights), the surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without such notation or a copy
of this Summary of Rights, will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 21, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights is 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 Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for or purchase Common Stock at a price, or securities
convertible into Common Stock with a conversion price, less than the
then-current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Common Stock) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights is subject to adjustment in the event of
a stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right either (i)
upon payment of an amount equal to the Purchase Price multiplied by the number
of shares of Common Stock for which a Right was exercisable immediately prior
to such event, that number of shares of Common Stock having a market value
equal to two times such adjusted Purchase Price, or (ii) upon payment of the
then par value (at present $2.50) of a share of Common Stock per whole share of
Common Stock, a pro rata portion of the number of shares of Common Stock
available to be purchased from the Company, in the event that the number of
such available shares is less than the aggregate number of shares of Common
Stock that would be purchasable pursuant to the foregoing clause (i) upon
exercise of all exercisable Rights then outstanding.
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<PAGE> 48
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise of a Right and payment
of the Purchase Price adjusted as described in clause (i) of the preceding
paragraph, that number of shares of common stock of the person with whom the
Company has engaged in the foregoing transaction (or its parent) that at the
time of such transaction have a market value of two times the adjusted Purchase
Price.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier to occur of one of the events described in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person, which
will have become void) for shares of Common Stock at an exchange ratio equal to
one share of Common Stock per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued and
in lieu thereof an adjustment in cash will be made based on the current market
price of the Common Stock.
At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the redemption price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with
respect to the redemption price, amend the Rights Agreement in any manner that
does not adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, 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.
45
<PAGE> 49
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 filed
in December, 1996. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
46
