SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
Loctite Corporation
-------------------
(Name of Issuer)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
540137 10 6
--------------
(CUSIP Number)
Alan Appelbaum, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
----------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 14, 1994
--------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D, and
is filing this Schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the statement
[ ].
SCHEDULE 13D
CUSIP No. 540137 10 6
-------------
<PAGE>
<PAGE>
______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
HC Investments, Inc.
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |__|
(b) | x|
--
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS
AF, WC
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |__|
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
______________________________________________________________________________
7 SOLE VOTING POWER
10,485,560
NUMBER OF ____________________________________________________________
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY NONE
EACH ____________________________________________________________
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 10,485,560
____________________________________________________________
10 SHARED DISPOSITIVE POWER
NONE
______________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,485,560
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES | x|
CERTAIN SHARES --
______________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.6%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON
CO
______________________________________________________________________________
This Amendment No. 7 (this "Amendment") amends and supplements the
Schedule 13D filed on June 3, 1985, as previously amended (the "Schedule
13D"), of Henkel Corporation, with respect to the Common Stock, $.01 par value
("Common Stock"), of Loctite Corporation ("Loctite" or the "Company"). All
capitalized terms used in this Amendment and not otherwise defined herein have
the meanings ascribed to such terms in the Schedule 13D.
Item 2. Identity and Background.
-----------------------
The names, addresses, occupations and citizenship of the current
executive officers and members of the Board of Directors of HCI are set forth
on Schedule I hereto.
The principal executive offices of Henkel KGaA are located at 67
Henkelstrasse, 40191 Duesseldorf, Federal Republic of Germany. The names,
addresses, occupations and citizenship of the current executive officers,
directors and controlling persons of Henkel KGaA are set forth on Schedule II
hereto.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
HCI expended an aggregate of $1,264,979.60 in connection with its
acquisitions, since March 6, 1992, of 33,808 shares of Common Stock. The
source of such funds were capital contributions from Henkel Corporation from
its own working capital.
Item 4. Purpose of Transaction.
----------------------
On April 14, 1994, Henkel KGaA, Henkel Corporation and HCI (referred
to collectively as "Henkel") entered into an agreement with Loctite (the
"Agreement") to provide for certain aspects of the continuing relationships
among them. In connection with the Agreement, Loctite adopted a shareholder
rights plan and entered into a Rights Agreement dated as of April 14, 1994
with The First National Bank of Boston (the "Rights Agreement"). A copy of
each of the Agreement and the Rights Agreement is filed as an Exhibit hereto
and each is incorporated herein by this reference. The following description
of certain of the terms thereof is qualified in its entirety by reference to
the Agreement and the Rights Agreement.
Pursuant to the Agreement, the Investment Agreement previously
described in the Schedule 13D shall terminate on and as of April 25, 1994.
Certain aspects of the continuing relationship between Loctite and Henkel will
be governed by the Agreement, as supplemented by the provisions of the Rights
Agreement, which will terminate on April 14, 2004.
Under the Agreement, as long as Henkel owns at least 10% of the
outstanding Common Stock, Loctite is prohibited from (i) adopting any
shareholder rights plans or similar device that does not contain substantially
the same terms and conditions as those set forth in the Rights Agreement and
(ii) adopting, amending, modifying, waiving, terminating or invalidating any
provision of the Rights Agreement, any similar rights plan, Loctite's
certificate of incorporation or by-laws in any way which would adversely
affect the rights of Henkel under the Rights Agreement.
Under the Agreement, Loctite will (subject to certain exceptions)
give Henkel notice of, and a reasonable opportunity to present its views on,
(i) any proposed adoption, amendment, modification, waiver, termination or
invalidation by Loctite of any provision of the Rights Agreement, any similar
rights plan, Loctite's certificate of incorporation or by-laws not otherwise
prohibited by the Rights Agreement and (ii) any proposed issuance by Loctite
of additional shares of Common Stock (subject to certain exceptions).
Under the Agreement, Henkel shall not, directly or indirectly, seek
to (i) amend, modify, waive, terminate or invalidate any provision of the
Rights Agreement or similar rights plan or (ii) redeem or exchange the rights
under the Rights Agreement, in either case, unless a majority of the outside
Directors of Loctite consents to such action. Under the Agreement, Henkel
will (subject to certain exceptions) give Loctite notice of, and a reasonable
opportunity to present its views on, any proposed solicitation of proxies in
opposition to any proposal recommended by the Board of Directors of Loctite
(the "Board") or to remove any Director on the Board (each, a "Director").
Under the Agreement, the Board will be expanded from ten members to
twelve members, and Henkel will recommend one person to become one of the two
new Directors. Such recommendation shall be subject to the approval of a
majority of all of the Directors, which approval shall not be unreasonably
withheld. Under the Agreement, Loctite will not expand or reduce the size of
the Board without Henkel's prior written consent.
Under the Agreement, in connection with the annual election of
Directors, Henkel shall be entitled to recommend to serve as Directors three
persons at any time that it owns at least 25% of the outstanding Common Stock;
two persons at any time that it owns between 15% and 25% of the outstanding
Common Stock; and one person at any time that it owns between 10% and 15% of
the outstanding Common Stock. Henkel shall not be entitled to recommend
Directors pursuant to the Agreement at any time that it owns less than 10% of
the outstanding Common Stock. Such recommendations shall be subject to the
approval of a majority of all of the Directors, which approval shall not be
unreasonably withheld.
Under the Agreement, at least one Henkel recommended Director shall
be a member of any key committee of the Board that has up to four members, and
at least two Henkel recommended Directors shall be members of any key
committee of the Board that has five or more members. Loctite shall cause the
Shareholder Relations Committee of the Board to be dissolved effective as of
April 25, 1994.
The Rights Agreement generally imposes economic consequences against
any stockholder who owns in excess of 10% of the outstanding Common Stock,
subject to certain exceptions. Henkel is one of the stockholders
grandfathered under the Rights Agreement and is permitted to own in excess of
10% of the outstanding Common Stock without such consequences on the terms set
forth in the Rights Agreement. Henkel currently owns approximately 29.6% of
the outstanding Common Stock.
Under the Agreement and the Rights Agreement, Henkel may
beneficially own up to 35% of the outstanding Common Stock, such maximum
percentage being subject to adjustment under certain circumstances (the
"Henkel Percentage"). Henkel may acquire additional shares of Common Stock,
up to the Henkel Percentage, in open market transactions, privately negotiated
transactions, transactions pursuant to the right of first refusal from the
Sellers previously described in the Schedule 13D, or otherwise.
Under the Agreement, Henkel's right of first refusal pursuant to the
Stock Purchase Agreement, which expires on May 23, 1998, may be exercised by
Henkel so long as, following such exercise, Henkel owns less than the Henkel
Percentage. Under the Agreement, after Henkel has reached the Henkel
Percentage or if Henkel declines to exercise its right of first refusal,
Henkel will assign the right to exercise the right of first refusal on the
Common Stock being offered to Loctite. If neither Henkel nor Loctite
exercises the right of first refusal with respect to Common Stock being
offered in an amount equal to 3% or more of the outstanding Common Stock,
Henkel and Loctite would use their respective reasonable best efforts to cause
the Common Stock being offered to be distributed as widely as practicable.
Under the Rights Agreement, a person generally is permitted to own
more than 10%, and Henkel is permitted to own more than the Henkel Percentage,
of outstanding Common Stock without economic consequence only pursuant to a
tender or exchange offer for all outstanding Common Stock which (i) is at a
price and on terms determined by at least a majority of the disinterested
Directors and a majority of all of the members of the Board to be adequate and
otherwise in the best interests of Loctite or (ii) remains open for a period
of at least 60 days after the tender or exchange offer has commenced and the
consummation of which results in the offeror becoming the beneficial owner of
more than 50% of the outstanding Common Stock.
Except as described herein, Henkel is not restricted or prohibited
from transferring shares of Common Stock held by it. Under the Agreement and
the Rights Agreement, Henkel may transfer a portion or all of the Common Stock
held by it to any person who, as a result of such transfer, would own more
than 10% of the outstanding Common Stock only if (i) a majority of the
unaffiliated Directors in their business judgment has not determined that
beneficial ownership by such person of 10% or more of the outstanding Common
Stock would be reasonably likely to materially adversely affect Loctite or its
stockholders and (ii) such person does not beneficially own, after giving
effect to such transfer, a percentage of the then outstanding Common Stock in
excess of the lesser of (A) the Henkel Percentage in effect immediately
prior to such proposed transfer and (B) the sum of 0.3% of the then
outstanding Common Stock and the percentage of the then outstanding Common
Stock to be transferred by Henkel to such person in such proposed transfer.
No transferee of any shares of Common Stock from Henkel shall have any
rights under the Agreement.
Under the Rights Agreement, the Henkel Percentage shall be reduced
by the percentage of Common Stock transferred by Henkel upon any transfer,
unless such transfer is effected by means of a "Distribution Transaction." A
Distribution Transaction is defined generally as a public offering or sale
pursuant to Rule 144 under the Securities Act of 1933, as amended (the "1933
Act"), in which the shares transferred are widely distributed and no
transferee acquires more than 1% of the outstanding Common Stock and no more
than three transferees acquire more than 0.5% of the outstanding Common Stock.
In the event of Distribution Transactions pursuant to which Henkel transfers,
in the aggregate, in excess of 10% of the outstanding Common Stock, the Henkel
Percentage is also reduced by the aggregate percentage of Common Stock
transferred in such Distribution Transactions.
Under the Agreement and subject to certain exceptions, Loctite
will prepare and file, on at least two occasions at the request of Henkel
Corporation, a registration statement on any available form under the 1933
Act, covering any equity securities of Loctite then owned by Henkel, at the
expense of Henkel. Any equity securities of Loctite owned by Henkel shall, at
Henkel Corporation's request, be included in any other registration statement
covering Loctite equity securities. Loctite will use its best efforts so that
Henkel may sell its Loctite equity securities pursuant to Rule 144.
Under the Agreement, Common Stock held by associates ("Associates"),
as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended,
of Henkel are not deemed to be beneficially owned by Henkel. If at any time
Henkel or Loctite becomes aware of the fact that the aggregate Common Stock
held by Henkel and its affiliates and Associates exceeds the Henkel Percentage
then in effect, Henkel must vote the excess Common Stock on any matter in the
same proportion as all outstanding Common Stock not held by Henkel and its
affiliates and Associates is voted. Henkel must also tender into any tender
or exchange offer (or otherwise sell to the person making such tender or
exchange offer) that is not opposed by a majority of those outside Directors
who are also Disinterested Directors (as defined in the Rights Agreement) or
that is for all outstanding shares of Common Stock and is held open for a
period of at least 60 days the excess Common Stock in the same proportion as
all outstanding Common Stock not held by Henkel and its affiliates and
Associates is tendered in such tender or exchange offer.
On April 14, 1994, Henkel KGaA issued a press release concerning the
Agreement and the Rights Agreement. A copy of the press release is filed as
Exhibit 10 hereto and is incorporated herein by this reference.
Henkel intends to review its investment in Common Stock from time to
time, including, among other things, the financial performance of Loctite, the
market for and price of Common Stock, and other general market and investment
conditions, and may, based on such review, purchase or sell shares of Common
Stock as permitted under the Agreement and the Rights Agreement.
Except as set forth herein, Henkel has no current plans or proposals
that relate to or would result in any of the actions or events enumerated in
clauses (a) through (j) of Item 4 of Schedule 13D, as promulgated by the
Securities and Exchange Commission.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) - (b) At the date hereof, HCI beneficially owns 10,485,560
shares of Common Stock, representing approximately 29.6% of the 35,377,625
shares of Common Stock outstanding on March 11, 1994 as reported in Loctite's
Form 10-K for the fiscal year ended December 31, 1993. Subject to the
limitations of the Agreement and the Rights Agreement, HCI has sole power to
vote and to dispose of the shares of Common Stock beneficially owned by it.
As set forth in Item 4 above and subject to the limitations
described therein, HCI has a right of first refusal with respect to shares of
Common Stock representing approximately 10% of the outstanding Common Stock.
Henkel disclaims beneficial ownership with respect to all shares of Common
Stock subject to the right of first refusal.
At the date hereof, Dr. Roman Dohr (a former member of the Board of
Management of Henkel KGaA and a director of Loctite) is the beneficial owner
(with sole voting and dispositive power) of 700 shares of Common Stock. At
the date hereof, Dr. Juergen Manchot (the Vice Chairman of the Shareholders'
Committee of Henkel KGaA and a director of Loctite) is the beneficial owner
(with sole voting and dispositive power) of 2,700 shares of Common Stock.
HCI, Henkel Corporation, Henkel of America, Inc. and Henkel KGaA disclaim
beneficial ownership of all shares of stock described in this paragraph, which
shares of Common Stock, in the aggregate, constitute less than 0.1% of the
number of outstanding shares of Common Stock.
At the date hereof, except as stated herein, neither HCI nor, to the
best of its knowledge, Henkel KGaA, Henkel of America, Inc., Henkel
Corporation or any of the other persons listed on Schedules I and II
beneficially owns any shares of Common Stock (other than shares of Common
Stock beneficially owned by HCI of which one or more of such other persons may
be deemed to have beneficial ownership pursuant to Rule 13d-3 of the
Securities Exchange Act of 1934, as amended).
(c) Certain information with respect to each transaction in the
Common Stock since March 6, 1992 (the date of Amendment No. 6 to the Schedule
13D) is set forth in Exhibit 11 hereto. Except as set forth herein, no
transactions in shares of Common Stock were effected during the past 60 days
by HCI, or, to the best of its knowledge, by Henkel KGaA, Henkel of America,
Inc., Henkel Corporation or any of the other persons listed on Schedules I and
II hereto.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
------------------------------------------------------
Except for the Agreement and the Rights Agreement described herein,
and the Stock Purchase Agreement previously described in the Schedule 13D,
neither HCI nor, to the best of its knowledge, Henkel KGaA, Henkel of America,
Inc., Henkel Corporation or any of the other persons listed on Schedules I and
II hereto has any contract, arrangement, understanding or relationship with
any person with respect to any Loctite securities.
Item 7. Material to be filed as Exhibits.
--------------------------------
Exhibit 8. Agreement, dated as of April 14, 1994, among Henkel
--------- KGaA, Henkel Corporation, HCI and Loctite.
Exhibit 9. Rights Agreement, dated as of April 14, 1994, between
--------- Loctite and The First National Bank of Boston.
Exhibit 10. Press Release issued by Henkel KGaA on April 14, 1994.
----------
Exhibit 11. Purchases of Common Stock from March 6, 1992 through
---------- April 14, 1994.
Signature
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 15, 1994
HC Investments, Inc.
By: /s/ Ernest G. Szoke
----------------------------
Ernest G. Szoke, Secretary
SCHEDULE I
----------
Officers and Directors of HC Investments, Inc.
---------------------------------------------
The following table sets forth the name, business address, position
with HC Investments, Inc. ("HCI") and present principal occupation of each
director and executive officer of HCI. Each individual listed below is a
citizen of the United States, except for Dr. Karl Grueter, who is a citizen of
the Federal Republic of Germany.
Position with HCI and Present
Name and Address Principal Occupation or Employment
- ---------------- ----------------------------------
Dr. Karl Grueter General Counsel of Henkel KGaA;
Henkel KGaA Chairman of the Board of Directors
Henkelstrasse 67 of HCI
40191 Duesseldorf
Federal Republic of Germany
Mr. John E. Knudson Vice President - Finance and Chief
Henkel Corporation Financial Officer of Henkel
2200 Renaissance Boulevard Corporation; Director and President
Gulph Mills, PA 19406 of HCI
Mr. Ernest G. Szoke Vice President and Chief Legal
Henkel Corporation Officer of Henkel Corporation;
2200 Renaissance Boulevard Director and Secretary of HCI
Gulph Mills, PA 19406
Mr. John R. Fulton, III Tax Director of Henkel Corporation;
Henkel Corporation Director and Assistant Secretary
2200 Renaissance Boulevard of HCI
Gulph Mills, PA 19406
Mr. James E. Ripka Treasurer of Henkel Corporation;
Henkel Corporation Director and Treasurer of HCI
2200 Renaissance Boulevard
Gulph Mills, PA 19406
Mr. Lloyd Overton Martin Assistant Vice President,
Wilmington Trust Company Corporate, Financial Services
Rodney Square North Department, Wilmington Trust
Wilmington, DE 19890 Company; Director and Assistant
Treasurer of HCI
Ms. Patricia A. Mosesso Administrative Manager, Law
Henkel Corporation Department; Assistant Secretary
2200 Renaissance Boulevard of HCI
Gulph Mills, PA 19406
SCHEDULE II
Officers and Directors of Henkel KGaA
The following table sets forth the name, business address (except as
noted), position with Henkel KGaA and present principal occupation of each
director, executive officer and controlling person of Henkel KGaA. Each
individual listed below is a citizen of the Federal Republic of Germany,
except Mr. de Keersmaecker, who is a citizen of Belgium, and Dr. Morwind, who
is a citizen of the Republic of Austria.
Present Principal
Name and Address Occupation or Employment
- ---------------- ------------------------
Supervisory Board:
- -----------------
Mr. Albrecht Woeste Chairman of the Supervisory
Henkelstrasse 67 Board of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Mr. Gottfried Neuen Chairman of the Works Council
c/o Henkel KGaA and Deputy Chairman of the
Henkelstrasse 67 Supervisory Board of Henkel
40191 Duesseldorf KGaA
Federal Republic of Germany
Dr. Ulrich Cartellieri Member of the Board of
c/o Deutsche Bank AG Management of Deutsche Bank AG
Koenigsalles 45/51
40191 Duesseldorf
Federal Republic of Germany
Mrs. Ursula Fairchild Photographer
6126 Avenida Cresta
La Jolla, California 92307
United States
(residence)
Dr. Klaus Dieter Leister Member of the Board of Management
c/o Westdeutsche Landesbank of Westdeutsche Landesbank
- - Gironzentrale -
40199 Duesseldorf
Federal Republic of Germany
Mr. Johann-Christoph Frey Entrepreneur
Kuehlwetterstrasse 49
40239 Duesseldorf
Federal Republic of Germany
Mr. Hans Mehnert Member of the Works Council
c/o Henkel KGaA of Henkel KGaA
Henkelstrasse 67
40191 Duesseldorf
Federal Republic of Germany
Mr. Herbert Puderbach Physicist employed by Henkel
c/o Henkel KGaA KGaA
Henkelstrasse 67
40191 Duesseldorf
Federal Republic of Germany
Mr. Juergen Sarrazin Member of the Board of Dresdner
c/o Dresdner Bank Bank AG
Juergen-Ponto-Platz 1
60301 Frankfurt/Main
Federal Republic of Germany
Mr. Erich Ruch Officer of IG Chemie-Papier-
c/o IG Chemie-Papier-Keramik Keramik
Friedrich-Ebert-Allee 34-38 (Industrial union of employees
40210 Duesseldorf in the chemical industry)
Federal Republic of Germany
Mrs. Klaere Spaas Assistant Manager Distribution
c/o Thera Cosmetic GmbH Thera Cosmetic GmbH
Werk Duelken
Lange Strasse 130
41751 Viersen
Federal Republic of Germany
Mr. Hans Vonderhagen Member of the Works Council
c/o Henkel KGaA of Henkel KGaA
Henkelstrasse 67
40191 Duesseldorf
Federal Republic of Germany
Mr. Benedikt-Joachim Freiherr Farmer
von Herman
Obere Dorfstrasse 1
88489 Wain
Federal Republic of Germany
Mr. Juergen Walter Officer of IG Chemie-Papier-
c/o IG Chemie-Papier-Keramik Keramik
Koenigsworther Platz 6 (Industrial union of employees
31535 Hannover in the chemical industry)
Federal Republic of Germany
Mr. Dieter Wendelstadt Chairman of the Management
c/o Colonia-Versicherung AG Board of Colonia-Versicherung AG
Colonia-Allee 10-20 and Colonia Lebensversicherung
51058 Koeln (insurance company)
Federal Republic of Germany
Mr. Hans Zander Member of the Works Council of
c/o Henkel KGaA Henkel KGaA
Henkelstrasse 67
40191 Duesseldorf
Federal Republic of Germany
Board of Management:
- -------------------
Dr. Hans-Dietrich Winkhaus Chairman of the Board of
Henkelstrasse 67 Management of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Dr. Jens Conrad Executive Vice President-Chemical
Henkelstrasse 67 Products of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Mr. Guido de Keersmaecker Executive Vice President-
Henkelstrasse 67 Adhesives of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Dr. Jochen Krautter Executive Vice President-
Henkelstrasse 67 Metal Chemicals
40191 Duesseldorf
Federal Republic of Germany
Dr. Wilfried Umbach Executive Vice President-
Henkelstrasse 67 Research and Technology of
40191 Duesseldorf Henkel KGaA
Federal Republic of Germany
Dr. Hans-Guenter Gruenewald Executive Vice President-
Henkelstrasse 67 Finance of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Dr. Klaus Morwind Executive Vice President-
Henkelstrasse 67 Detergents/Cleaning Products
40191 Duesseldorf of Henkel KGaA
Federal Republic of Germany
Dr. Roland Schulz Executive Vice President-
Henkelstrasse 67 Human Resources of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Dr. Uwe Specht Executive Vice President-
Henkelstrasse 67 Toiletries of Henkel KGaA
40191 Duesseldorf
Federal Republic of Germany
Exhibit Index
-------------
Exhibit Number Page Number
- -------------- -----------
Exhibit 1 Stock Purchase Agreement *
between Henkel of America,
Inc. and certain stockholders
of Loctite dated as of May 23, 1985
Exhibit 2 Investment Agreement between *
Henkel of America, Inc. and
Loctite dated May 23, 1985
Exhibit 3 Amendment to Stock Purchase *
Agreement between Henkel
Corporation and certain
stockholders of Loctite
dated as of October 11, 1985
Exhibit 4 Press Release issued by **
Henkel KGaA on March 19, 1991
Exhibit 5 Press Release issued by ***
Henkel KGaA on May 6, 1991
Exhibit 6 Agreement among Frederick B. ****
Krieble, Theta and Henkel
Corporation dated as of
January 31, 1992
Exhibit 7 Acknowledgement of Loctite ****
dated February 4, 1992
Exhibit 8 Agreement, dated as of April
14, 1994, among Henkel KGaA,
Henkel Corporation, HCI and
Loctite
Exhibit 9 Rights Agreement, dated as of
April 14, 1994, between
Loctite and The First
National Bank of Boston
Exhibit 10 Press Release issued by
Henkel KGaA on April 14, 1994
Exhibit 11 Purchases of Common Stock
from March 6, 1992 through
April 14, 1994
* Previously filed as an Exhibit to the Schedule 13D on
November 6, 1985.
** Previously filed as an Exhibit to Amendment No. 3 to
the Schedule 13D on March 20, 1991.
*** Previously filed as an Exhibit to Amendment No. 4 to
the Schedule 13D on May 8, 1991.
**** Previously filed as an Exhibit to Amendment No. 5 to
the Schedule 13D on March 2, 1992.
Agreement made as of this 14th day of April,
1994 (this "Agreement") among Loctite Corporation, a
Delaware corporation ("Loctite"), Henkel KGaA, a
Kommanditgesellschaft auf Aktien organized under the
laws of the Federal Republic of Germany ("Henkel
Germany"), Henkel Corporation, a Delaware corporation
and an indirect wholly-owned subsidiary of Henkel
Germany ("Henkel America"), and HC Investments, Inc., a
Delaware corporation and a direct wholly-owned
subsidiary of Henkel America ("Henkel Subsidiary").
Henkel Germany, Henkel America and Henkel Subsidiary
are sometimes collectively referred to herein as the
"Henkel Entities" and individually as a "Henkel
Entity".
WITNESSETH:
WHEREAS, pursuant to a Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated
May 23, 1985, Henkel of America, Inc., the direct
parent of Henkel America ("Henkel Parent"), agreed to
acquire from the sellers listed on Schedule A thereto
(collectively, the "Selling Stockholders") certain
shares of common stock, no par value, of Loctite (the
"Common Stock");
WHEREAS, in connection with the Stock
Purchase Agreement, Henkel Parent and Loctite entered
into an agreement, dated May 23, 1985 (the "Standstill
Agreement"), setting forth certain arrangements with
respect to the relationships between them;
WHEREAS, Henkel Parent assigned to Henkel
America all of its rights and obligations under the
Stock Purchase Agreement and the Standstill Agreement
and Henkel America acquired from the Selling
Stockholders all of the shares of Common Stock sold by
them pursuant to the Stock Purchase Agreement;
WHEREAS, Henkel America contributed all of
its shares of Common Stock to the capital of Henkel
Subsidiary and has designated Henkel Subsidiary to
receive all shares of Common Stock purchased by Henkel
America under Section 7(b) of the Stock Purchase
Agreement; and
WHEREAS, Henkel America and Loctite desire to
terminate the Standstill Agreement, and the Henkel
Entities and Loctite desire to enter into an agreement
for the purpose of governing certain aspects of the
relationships among them.
NOW, THEREFORE, in consideration of the
promises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be
legally bound hereby, each of the parties hereto agrees
as follows:
1. Termination of the Standstill Agreement.
Loctite and Henkel America agree that the Standstill
Agreement shall terminate effective as of the Record
Date (as defined below). Effective as of the Record
Date, the provisions of the Standstill Agreement shall
be of no further force and effect, and there shall be
no liability on the part of any party to the Standstill
Agreement with respect to any of the provisions thereof
with the sole exception that nothing contained in this
Agreement shall in any way relieve any party from
liability for any breach of the provisions of the
Standstill Agreement for the period commencing on the
date of this Agreement and ending on the Record Date.
The "Record Date" shall mean that certain date set
forth in the Rights Agreement referred to in Section
2.1 hereof on which the authorized and declared
dividend of one Right (as defined in the Rights
Agreement) is issued in respect of each share of Common
Stock outstanding as of such date.
2. Shareholder Rights Agreement.
2.1 Adoption. Simultaneously with the
execution of this Agreement, Loctite is entering into a
Rights Agreement with a bank or trust company acting as
rights agent, substantially in the form of Exhibit A
hereto (the Rights Agreement, as hereafter amended from
time to time, shall be referred to as the "Rights
Agreement").
2.2 Prohibited Actions.
2.2.1 Loctite. (a) So long as
this Agreement is in effect, (i) Loctite shall not
adopt any shareholder rights plan or similar device
that does not contain substantially the same terms and
conditions as those set forth in the Rights Agreement
(a "Substantially Similar Rights Plan") and
(ii) Loctite shall not amend, modify, waive, terminate
or invalidate any provision of the Rights Agreement or
any Substantially Similar Rights Plan or adopt, amend,
modify, waive, terminate or invalidate any provision of
its certificate of incorporation or by-laws in any way
which would adversely affect the rights of any of the
Henkel Entities under the Rights Agreement or any
Substantially Similar Rights Plan.
(b) In the event of any Proposed
Loctite Action (as defined below), Loctite will give
the Henkel Entities notice of such Proposed Loctite
Action within a reasonable period of time prior to
Loctite's taking of such Proposed Loctite Action and a
reasonable opportunity to present to Loctite and the
Board (as defined below) the Henkel Entities' views on
the merits of such Proposed Loctite Action; provided,
however, that if, in the Board's business judgment, the
giving of such notice and reasonable opportunity to
make such presentation would adversely affect the
Board's ability to carry out its fiduciary
responsibilities and such Proposed Loctite Action is,
in the business judgment of the Board, in the best
interests of Loctite and its stockholders, Loctite
shall have the absolute right to effect such proposed
Loctite Action without regard to this Section 2.2.1(b)
(including, without limitation, not providing the
Henkel Entities with any notice of any such Proposed
Loctite Action and the opportunity to make a
presentation with respect thereto). As used herein,
the term "Proposed Loctite Action" shall mean (i) any
proposed adoption, amendment, modification, waiver,
termination or invalidation by Loctite of any provision
of the Rights Agreement, a Substantially Similar Rights
Plan, its certificate of incorporation or its bylaws
that is not prohibited by Section 2.2.1(a) hereof or
(ii) any proposed issuance by Loctite of additional
shares of Common Stock (other than pursuant to (1) the
exercise of any outstanding stock option, warrant,
convertible security or other right to purchase shares
of Common Stock, (2) any benefit plan or other similar
employee or director arrangement, (3) any stock split,
stock dividend or similar distribution made available
to the holders of Common Stock generally or (4) any
issuance which alone, or together with any prior
issuance of additional shares of Common Stock covered
by this clause (4), would not exceed, in the aggregate,
2.5% of the shares of Common Stock outstanding on the
date of this Agreement).
2.2.2 Henkel Entities. (a) So
long as this Agreement is in effect, the Henkel
Entities shall not, and shall cause each of their
respective Affiliates (as such term is defined in Rule
12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange
Act")) and any Director (as defined below) nominated
by, or which is a representative of, any Henkel Entity
or any of their respective Affiliates not to, directly
or indirectly, seek to (i) amend, modify, waive,
terminate or invalidate, or cause the amendment,
modification, waiver, termination or invalidation of
any provision of the Rights Agreement or any
Substantially Similar Rights Plan in any manner
(including, without limitation, by proxy contest,
shareholder consent, or otherwise) or (ii) redeem or
exchange the Rights (as defined in the Rights
Agreement) or any rights issued under any Substantially
Similar Rights Plan, in either case, unless a majority
of the duly and validly elected directors of Loctite
(each a "Director") who are neither nominees or
representatives of any Henkel Entity or any of their
respective Affiliates nor officers or employees of
Loctite (each an "Outside Director") consent to such
action in writing or at a duly called meeting of the
board of Directors of Loctite (the "Board"); it being
understood that the consent of the Outside Directors
may only be obtained if there is at least one Director
that is an Outside Director.
(b) In the event of any Proposed Henkel
Action (as defined below) by any Henkel Entities or any
of their respective Affiliates (the "Henkel
Affiliates"), the Henkel Entities will give Loctite
notice of such Proposed Henkel Action within a
reasonable period of time prior to the taking of such
Proposed Henkel Action by such Henkel Entity or such
Henkel Affiliate (as the case may be) and a reasonable
opportunity to present to the Henkel Entities its views
on the merits of such Proposed Henkel Action; provided,
however, that if, in the reasonable judgment of the
Henkel Entities, the giving of such notice and
reasonable opportunity to make such presentation would
adversely affect the ability of such Henkel Entity or
such Henkel Affiliate (as the case may be) to effect
such Proposed Henkel Action, such Henkel Entity or such
Henkel Affiliates (as the case may be) shall have the
absolute right to effect such Proposed Henkel Action
without regard to this Section 2.2.2(b) (including,
without limitation, not providing Loctite with any
notice of such Proposed Henkel Action and the
opportunity to make a presentation with respect
thereto). As used herein, the term "Proposed Henkel
Action" shall mean any proposed action by any Henkel
Entity or any Henkel Affiliate regarding the
"solicitation" of "proxies" (as such terms are defined
or used in Regulation 14A of the Exchange Act) or
becoming of a "participant" in any "election contest"
(as such terms are defined or used in Rule 14a-11 of
the Exchange Act), in each case, either (i) in
opposition to any proposal to the holders of shares of
Common Stock recommended by the Board or (ii) to remove
any Directors.
(c) Loctite acknowledges that, except
for the provisions of Section 2.2.2(b) hereof, nothing
in this Agreement shall be construed as prohibiting any
Henkel Entity or any Henkel Affiliates from making, or
in any way participating in, any "solicitation" of
"proxies" (as such terms are defined or used in
Regulation 14A of the Exchange Act), or becoming a
"participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 of the Exchange
Act), in each case, for the election or removal of any
of the Directors; provided, however, any Director
nominated by any Henkel Entity or any Henkel Affiliates
shall be subject to the restrictions contained in
Section 2.2.2(a) hereof.
3. Corporate Governance.
3.1 Board of Directors. (a) As
promptly as practicable after the date hereof, but in
no event later than November 15, 1994, the Outside
Directors and the Henkel Entities shall each recommend
one person to become a Director (each, an "Initial
Recommended Person") to fill the two newly-created
directorships that will result upon the expansion of
the Board from ten members to twelve members in
accordance with this Section 3.1. Subject to the
second sentence of Section 3.1(c)(iii) hereof, each
Initial Recommended Person shall be subject to the
approval of a majority of all of the Directors, which
approval shall not be unreasonably withheld; the
parties hereto acknowledge that it is currently
anticipated that such consent by the Directors would
not be withheld in the case of an Initial Recommended
Person selected by the Henkel Entities unless such
person is the Executive Vice President-Adhesives (or
otherwise is an executive within the Adhesives
division) of Henkel Germany (or another division or
subdivision of Henkel Germany or its subsidiaries that
may in the future engage in substantially the same
activities as the Adhesives division of Henkel Germany
engages in on the date hereof) or whose membership on
the Board would be a violation of law. If an Initial
Recommended Person is not approved as provided herein,
then the Outside Directors or the Henkel Entities, as
the case may be, that recommended such person shall
promptly recommend a substitute or substitutes until
approval is obtained in accordance with the terms of
this Section 3.1(a). Loctite shall cause the Board to
be expanded from ten to twelve members as soon as
practicable after the Initial Recommended Persons are
so approved (each Initial Recommended Person which is
so approved, shall be referred to as an "Initial
Approved Person"), and Loctite and the Henkel Entities
shall cause the Initial Approved Persons to be duly and
validly elected as Directors to fill the new board
seats resulting from such expansion.
(b) From and after the expansion of the
Board to twelve members pursuant to Section 3.1(a)
hereof, Loctite agrees not to expand or reduce the size
of the Board without the prior written consent of the
Henkel Entities.
(c) From and after the election of the
Initial Approved Persons pursuant to Section 3.1(a)
hereof:
(i) Subject to Section 3.4 hereof,
the Henkel Entities shall be entitled to recommend the
number of persons to serve as Directors (each such
person hereinafter referred to as a "Henkel Recommended
Person") set forth in the immediately succeeding
sentence. At any time that the Henkel Entities,
together with the Henkel Affiliates, own, in the
aggregate, 25% or more of the outstanding shares of
Common Stock, the Henkel Entities shall be entitled to
recommend three Henkel Recommended Persons; at any time
that the Henkel Entities, together with the Henkel
Affiliates, own, in the aggregate, less than 25% of the
outstanding shares of Common Stock, but 15% or more of
the outstanding shares of Common Stock, the Henkel
Entities shall be entitled to recommend two Henkel
Recommended Persons; and at any time that the Henkel
Entities, together with the Henkel Affiliates, own, in
the aggregate, less than 15% of the outstanding shares
of Common Stock, but 10% or more of the outstanding
shares of Common Stock, the Henkel Entities shall be
entitled to recommend one Henkel Recommended Person.
(ii) The Secretary of Loctite shall
deliver written notice (the "Secretary Notice") to
Henkel America no later than 30 days prior to any
meeting of the Board at which the election of Directors
is scheduled on the agenda for action by the Board,
setting forth the date of such meeting. With respect
to any Secretary Notice, Henkel America must deliver
written notice to Loctite setting forth the Henkel
Recommended Persons no later than 15 days after its
receipt of such Secretary Notice.
(iii) Each Henkel Recommended
Person shall be subject to the approval of a majority
of all of the Directors, which approval shall not be
unreasonably withheld; the parties hereto acknowledge
that it is currently anticipated that such consent by
the Directors would not be withheld unless such person
is the Executive Vice President-Adhesives (or otherwise
is an executive within the Adhesives division) of
Henkel Germany (or another division or subdivision of
Henkel Germany or its subsidiaries that may in the
future engage in substantially the same activities as
the Adhesives division of Henkel Germany engages in on
the date hereof) or whose membership on the Board would
be a violation of law. Notwithstanding anything herein
to the contrary, nothing in this Agreement shall be
construed as limiting in any manner the Directors from
exercising, in their business judgment, their fiduciary
duties as Directors under applicable law in connection
with their making a determination whether to approve an
Initial Recommended Person selected by the Henkel
Entities or any Henkel Recommended Person pursuant to
Section 3.1(a) hereof or Section 3.1(c)(iii) hereof, as
the case may be. If a Henkel Recommended Person is not
approved as provided herein, then the Henkel Entities
shall promptly recommend a substitute or substitutes
until approval is obtained in accordance with the terms
of this Section 3.1(c). Loctite shall include any
Henkel Recommended Person that has been approved by a
majority of all of the Directors in the slate of
nominees recommended by the Board to Loctite's
stockholders for election as Directors. Each Henkel
Recommended Person who is duly and validly elected by
the stockholders of Loctite to serve as a Director
shall be referred to as a "Henkel Nominee."
(d) From and after the election of the
Initial Approved Persons pursuant to Section 3.1(a)
hereof:
(i) So long as there are any Henkel
Nominees, the Outside Directors shall recommend the
remaining persons (other than the Henkel Nominees) to
serve as Directors (each such person shall be referred
to as an "Outside Director Recommended Person").
(ii) Each Outside Director
Recommended Person shall be subject to the approval of
a majority of all of the Directors, which approval
shall not be unreasonably withheld. If an Outside
Director Recommended Person is not approved as provided
herein, then the Outside Directors shall promptly
recommend a substitute or substitutes until approval is
obtained in accordance with the terms of this
Section 3.1(d). Loctite shall include any Outside
Director Recommended Person that has been approved by a
majority of all of the Directors in the slate of
nominees recommended by the Board to stockholders for
election as Directors. Loctite shall ensure that at
least one Outside Director Recommended Person so
included in such slate shall be neither a nominee or
representative of any Henkel Entity or any Henkel
Affiliate nor an officer or employee of Loctite. Each
Outside Director Recommended Person who is duly and
validly elected by the stockholders of Loctite to serve
as a Director shall be referred to as a "Non-Henkel
Nominee."
(e) Each Henkel Nominee and Non-Henkel
Nominee shall hold his office until his death,
retirement or resignation or until his successor shall
have been duly elected and qualified. If any Henkel
Nominee or Non-Henkel Nominee shall cease to serve as a
Director, the vacancy resulting thereby shall be filled
by another person recommended by the Henkel Entities or
the Outside Directors, respectively, and approved in
accordance with Section 3.1(c) or 3.1(d), respectively.
3.2 Committees. Subject to Sections 3.3
and 3.4 hereof, (a) at least one Henkel Nominee shall
be a member of any key committee of the Board that has
up to four members on such key committee and (b) at
least two Henkel Nominees shall be members of any key
committee of the Board that has five or more members on
such key committee.
3.3 Dissolution of Shareholder Relations
Committee. Loctite shall cause the Shareholder
Relations Committee of the Board to be dissolved
effective as of the Record Date; provided, however,
that Loctite retains the right to reconstitute a
committee of Disinterested Directors (as defined below)
or the Outside Directors, if in the opinion of the
Disinterested Directors or Outside Directors, as
applicable, a need for such a committee arises. The
term "Disinterested Directors" means Directors who are
neither officers or employees of Loctite nor any person
proposing or attempting to effect a business
combination or similar transaction with Loctite
(including, without limitation, a merger, tender offer
or exchange offer, sale of substantially all of
Loctite's assets, or liquidation of Loctite's assets),
any Affiliate or Associate (as defined in Rule 12b-2
under the Exchange Act) of such person or any other
person acting directly or indirectly on behalf of, or
as a representative of, or in concert with, any such
person, Affiliate or Associate.
3.4 Applicability. Notwithstanding
anything in this Agreement to the contrary, Loctite
shall have no obligations, and the Henkel Entities
shall have no rights (including, without limitation,
the right of the Henkel Entities to recommend any
person to serve as a Director), under Section 2.2.1(a)
and this Section 3 from and after the time that the
Henkel Entities, together with their respective
Affiliates, own, in the aggregate, less than 10% of the
outstanding shares of Common Stock.
4. Right of First Refusal. (a)(i) Upon
receipt by Henkel America of a Seller's Notice (as
defined in the Stock Purchase Agreement), Henkel
America shall deliver to Loctite within three days of
its receipt thereof: (A) a copy of such Seller's
Notice and (B) written notice (a "Notice of
Opportunity") setting forth (I) the date that Henkel
America received the Seller's Notice (the "Receipt
Date") and (II) the number of shares of Common Stock
offered for sale pursuant to the Seller's Notice (the
"Offered Shares"); provided, however, that Henkel
America need not deliver a Notice of Opportunity if it
is permitted under Section 4(a)(ii) hereof to acquire
all of the Offered Shares related to such Seller's
Notice and, within such three day period, Henkel
America shall have delivered a Henkel's Notice (as
defined in the Stock Purchase Agreement) exercising in
full its right to acquire those Offered Shares under
Section 7(b) of the Stock Purchase Agreement. Unless
the Offered Shares have been purchased in accordance
with the proviso to the immediately preceding sentence,
Henkel America shall deliver to Loctite within fifteen
days of the Receipt Date (the "Henkel Time Period")
written notice (a "Notice of Decision") setting forth
whether Henkel America intends to exercise its right
under Section 7(b) of the Stock Purchase Agreement to
acquire the Offered Shares related to such Seller's
Notice and, if so, subject to Section 4(a)(ii) hereof,
the number of shares of Common Stock which Henkel
America shall purchase pursuant to Section 7(b) of the
Stock Purchase Agreement (the "Henkel Purchased
Shares"). In connection with any Seller's Notice, if
Henkel America fails to provide Loctite with a Notice
of Decision within the Henkel Time Period or the Notice
of Decision fails to set forth the Henkel Purchased
Shares, the Henkel Purchased Shares shall be deemed to
be zero. In connection with any Notice of Decision,
Henkel America shall purchase, or cause Henkel
Subsidiary to purchase, the Henkel Purchased Shares
subject to such Notice of Decision in accordance with
the terms and conditions set forth in Section 7(b) of
the Stock Purchase Agreement.
(ii) Each of Henkel America and
Henkel Subsidiary may only purchase shares of Common
Stock pursuant to Section 7(b) of the Stock Purchase
Agreement if, after giving effect to such purchase, no
Henkel Entity is an Acquiring Person (as defined in the
Rights Agreement).
(iii) In connection with any
Seller's Notice, Henkel America hereby assigns to
Loctite all of Henkel America's rights under
Section 7(b) of the Stock Purchase Agreement with
respect to the Loctite Purchasable Shares (as defined
below) related to such Seller's Notice, effective as of
the earlier of the (A) delivery to Loctite of the
Notice of Decision related to such Seller's Notice and
(B) if Henkel America fails to deliver such Notice of
Decision, the expiration of the Henkel Time Period
applicable to such Seller's Notice. In connection with
any Seller's Notice, the term "Loctite Purchasable
Shares" shall mean that number of shares equal to the
difference, if any, between (A) the Offered Shares
related to such Seller's Notice and (B) the Henkel
Purchased Shares related to such Seller's Notice.
(b) In connection with any Seller's
Notice, Loctite shall have the right, but not the
obligation, to purchase any or all of the Loctite
Purchasable Shares related to such Seller's Notice by
delivering written notice (the "Loctite Notice") to
Henkel America and to the proposed seller of the
Offered Shares to which such Seller's Notice relates no
later than 30 days after the Receipt Date related to
such Seller's Notice (the number of shares which
Loctite agrees to purchase, as set forth in the Loctite
Notice, shall hereinafter be referred to as the
"Loctite Purchased Shares"), and Loctite shall purchase
those Loctite Purchased Shares in accordance with the
terms and conditions of Section 7(b) of the Stock
Purchase Agreement.
(c) In connection with any Seller's
Notice, if the number of shares equal to the
difference, if any, between (i) the Offered Shares
related to such Seller's Notice and (ii) the sum of
(A) the Henkel Purchased Shares related to such
Seller's Notice and (B) the Loctite Purchased Shares
related to such Seller's Notice is equal to 3% or more
of the then outstanding shares of Common Stock, each of
the Henkel Entities and Loctite shall use their
respective reasonable best efforts to cause those
shares to be distributed as widely as practicable (it
being understood that none of the parties hereto shall
have any obligation to purchase those shares);
provided, however, that no Henkel Entity shall have any
obligation to take any action pursuant to this
Section 4(c) if such Henkel Entity reasonably
determines that such action could require it to make
any payment under Section 16(b) of the Exchange Act if
a suit for recovery were duly instituted against such
Henkel Entity.
(d)(i) The Henkel Entities represent and
warrant to Loctite that (A) except as set forth in
Section 4(a) hereof, Henkel America has not granted,
assigned, pledged or otherwise disposed of any rights
under Section 7(b) of the Stock Purchase Agreement to
any person or entity other than Henkel Subsidiary as
set forth in the fourth recital of this Agreement and
(B) a true, correct and complete copy of the Stock
Purchase Agreement, as in effect on the date hereof,
without amendment or modification, has been previously
filed as an exhibit to the Schedule 13D of Henkel
Subsidiary filed with the Securities and Exchange
Commission under the Exchange Act.
(ii) Except as provided in
Section 4(a) hereof, Henkel America shall not assign,
pledge or otherwise dispose of any of its rights under
Section 7(b) of the Stock Purchase Agreement and any
attempted or purported assignment, pledge or other
disposition in violation of this provision shall be
void and of no effect.
(iii) Henkel America agrees not to
amend, modify, waive, terminate or invalidate any
provision of, or take any action or fail to take any
action which would adversely affect its rights under,
Section 7(b) of the Stock Purchase Agreement.
5. Registration Rights. On at least two
occasions at the request of Henkel America, Loctite
will prepare and file, and use its best efforts to have
made effective within six months from the receipt of
such request, a registration statement on any available
form under the Securities Act of 1933, as amended (the
"1933 Act"), covering any equity securities of Loctite
then owned by the Henkel Entities, at the expense of
the Henkel Entities. In addition, any equity
securities of Loctite owned by the Henkel Entities
shall, at Henkel America's request, be included in any
other registration statement covering Loctite equity
securities (other than registration statements relating
to an exchange offer, merger or consolidation by
Loctite or any equity-based benefit or dividend
reinvestment plan for directors, officers or employees
of Loctite or its subsidiaries), the Henkel Entities to
pay only any incremental expenses resulting from such
inclusion. This Section 5 will not be operative if, in
the opinion of counsel for Loctite with which counsel
for Henkel America concurs, the Henkel Entities may
dispose of their Loctite equity securities in the
manner and to the person, persons or class of persons
contemplated by them without registration under the
1933 Act, including, without limitation, under Rule 144
promulgated pursuant to the 1933 Act. In addition,
Loctite will use its best efforts so that the Henkel
Entities may sell their Loctite equity securities
pursuant to Rule 144 promulgated pursuant to the 1933
Act. In connection with any registration pursuant to
this Section 5, Loctite and the Henkel Entities will
enter into customary agreements relating to
indemnification and other matters.
6. Henkel Transferees.
6.1 Permitted Transfers. (a) In
connection with any proposed Permitted Transfer (as
defined in the Rights Agreement) by Henkel America,
Henkel America shall deliver to Loctite no later than
30 days prior to the Transfer Date (as defined below)
for such proposed Permitted Transfer (i) written notice
of such proposed Permitted Transfer (the "Transfer
Notice"), setting forth (A) the number of shares of
Common Stock proposed to be transferred, (B) the
identity of the proposed transferee (the "Proposed
Transferee"), including the beneficial owners thereof
to the extent known or reasonably determinable by
Henkel America, and (C) the date on which the proposed
Permitted Transfer is to be consummated (the "Transfer
Date") and (ii) an agreement substantially in the form
of Exhibit A-1 to the Rights Agreement, duly and
validly executed on behalf of the Proposed Transferee
(the "Transferee Agreement"). Upon receipt by Loctite
of the Transferee Agreement duly executed and delivered
by the Proposed Transferee, Loctite shall duly execute
and deliver the Transferee Agreement.
(b) As soon as practicable after receipt
of the Transfer Notice, the Outside Directors shall
evaluate whether the Proposed Transferee is an Adverse
Person (as defined in the Rights Agreement). Henkel
America shall provide the Outside Directors with any
information within its control requested by
them to facilitate their evaluation, as soon as practicable
after any request for information is made.
(c) Subject to Section 6.1(d) hereof, a
proposed Permitted Transfer may be consummated on the
Transfer Date as set forth in the Transfer Notice and
the Transferee Agreement related to such proposed
Permitted Transfer unless the Outside Directors shall
have determined that the Proposed Transferee related to
such proposed Permitted Transfer is an Adverse Person
no later than five days prior to the Transfer Date for
such proposed Permitted Transfer; provided, that Henkel
America complies with its obligations in
Sections 6.1(a) and (b) hereof.
(d) With respect to any proposed Permitted
Transfer, the Proposed Transferee shall be deemed to be
an Adverse Person for purposes of the Rights Agreement
unless there is at least one Director that is an
Outside Director during the period from and including
the date Loctite receives a Transfer Notice in respect
of such proposed Permitted Transfer to and including
the Transfer Date for such proposed Permitted Transfer.
Except as required by applicable law or order of any
court or other governmental authority, Loctite
covenants and agrees that it will not take any action
to cause there to be fewer than one Outside Director on
the Board at any time.
6.2 Transferability. Notwithstanding
anything in this Agreement to the contrary, no
transferee of any shares of Common Stock from any
Henkel Entity shall have any rights under this
Agreement.
6.3 Distribution Transaction. In
connection with any Distribution Transaction (as
defined in the Rights Agreement), Henkel shall use its
best efforts to cause the shares of Common Stock
subject to such Distribution Transaction to be
distributed as widely as practicable.
7. Associates of Henkel Entities. (a) In
the event that from time to time any of the Henkel
Entities or Loctite becomes aware of the fact that the
Henkel Entities, together with their respective
Affiliates and Associates, beneficially own (as such
term is used in the Rights Agreement without giving
effect to the proviso to the definition of the term
"Associate" in the Rights Agreement) a percentage of
outstanding shares of Common Stock in excess of the
Henkel Percentage (as defined in the Rights Agreement)
then in effect, the Henkel Entities (if any of them
becomes aware of such fact) shall promptly deliver to
Loctite, or Loctite (if it becomes aware of such fact)
shall promptly deliver to the Henkel Entities, written
notice (an "Associate Notice") of such fact, setting
forth (i) the amount by which such party is aware that
the percentage of outstanding shares of Common Stock
beneficially owned by the Henkel Entities, together
with their respective Affiliates and Associates,
exceeds the Henkel Percentage and (ii) the date that
such party became aware of such fact. As used herein,
(A) the term "Excess Percentage" shall mean the amount
of the percentage of outstanding shares of Common Stock
by which the aggregate percentage of outstanding shares
of Common Stock beneficially owned by the Henkel
Entities, together with their respective Affiliates and
Associates (if and to the extent that any Henkel Entity
has become aware of such ownership directly or pursuant
to an Associate Notice delivered to the Henkel Entities
by Loctite), exceeds the Henkel Percentage then in
effect and (B) the term "Discovery Date" shall mean the
date that any Henkel Entity becomes aware of the
existence of an Excess Percentage or if Loctite first
became aware of the existence of an Excess Percentage,
the date that the Henkel Entities receive an Associate
Notice from Loctite in connection therewith.
(b) From and after a Discovery Date and
so long as the amount of the Excess Percentage is
greater than zero, the Henkel Entities shall, and shall
cause their respective Affiliates to, (i) vote with
respect to any matter that percentage of outstanding
shares of Common Stock beneficially owned by the Henkel
Entities and their respective Affiliates equal to the
Excess Percentage in the same proportion as all
outstanding shares of Common Stock not beneficially
owned by the Henkel Entities and their respective
Affiliates and Associates are voted on such matter and
(ii) tender into any tender or exchange offer (or
otherwise sell to the person making such tender or
exchange offer) for the shares of Common Stock that is
not opposed by a majority of those Outside Directors
who are also Disinterested Directors (as defined in the
Rights Agreement) or is for all outstanding shares of
Common Stock and is held open for a period of at least
60 days from its commencement, that percentage of
outstanding shares of Common Stock beneficially owned
by the Henkel Entities and their respective Affiliates
equal to the Excess Percentage in the same proportion
as all outstanding shares of Common Stock not
beneficially owned by the Henkel Entities and their
respective Affiliates and Associates are tendered in
such tender or exchange offer.
8. Representations and Warranties. Each
party hereto represents and warrants to each other
party hereto that:
(a) it has the requisite corporate power
and authority to execute and deliver this Agreement, to
carry out its obligations hereunder and to consummate
each of the transactions contemplated hereby;
(b) the execution, delivery and
performance of this Agreement and the consummation of
each of the transactions contemplated hereby have been
duly authorized by its Board of Directors (or other
relevant corporate body), and no other corporate
proceedings on its part are necessary to authorize this
Agreement or to consummate the transactions so
contemplated;
(c) this Agreement has been duly
executed and delivered by it and, assuming this
Agreement constitutes a valid and binding obligation of
each other party hereto, constitutes a valid
and binding obligation of it, enforceable against it in
accordance with its respective terms, except to the
extent such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to the enforcement of
creditors' rights generally and is subject to the
general principles of equity; and
(d) neither the execution, delivery and
performance of this Agreement nor the consummation by
it of the transactions contemplated hereby nor
compliance by it with any of the provisions hereof will
(i) conflict with or result in any breach or violation
of any provisions of its governing organizational
documents, (ii) require on its part any filing with,
notification to, or permit, authorization, consent or
approval of, any governmental body or authority or any
other entity (other than filings by Henkel Entities
with the Securities and Exchange Commission under the
Exchange Act) or (iii) constitute (with or without
notice or lapse of time or both) a breach, violation or
default, create a lien or other encumbrance or give
rise to any right of renegotiation or termination,
amendment, cancellation, acceleration or prepayment
under (A) any material agreement or instrument to which
it is a party or by which any of its material
properties or assets may be bound or subject or (B) any
order, writ, injunction, decree, statute, rule or
regulation, governmental permit or license applicable
to it or any of its material properties or assets.
8.1 Loctite Share Ownership. The Henkel
Entities represent and warrant to Loctite that as of
the date hereof, the Henkel Entities and the Henkel
Affiliates own, in the aggregate, 10,488,960 shares of
Common Stock.
9. Miscellaneous.
9.1 Entire Agreement. This Agreement
embodies the entire agreement and all understandings
between the parties hereto and supersedes all prior
agreements and understandings relating to the subject
matter hereof.
9.2
Binding Effect; Benefits; Assignment;
Survival. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their
respective legal representatives, successors and
assigns. Neither this Agreement nor any of the rights
hereunder may be assigned by (i) Loctite, without the
prior written consent of Henkel America, or (ii) any
Henkel Entity, unless there is at least one Outside
Director and a majority of the Outside Directors
consents to such assignment in writing or at a duly
called meeting of the Board. Any attempted or
purported assignment in violation of the previous
sentence shall be void and of no effect. The
representations and warranties of the parties hereto
set forth herein shall survive without limitation as to
time.
9.3 Amendments and Waivers. No
modification, amendment, termination or waiver of any
provision of this Agreement, nor consent to any
departure therefrom, shall in any event be effective
unless (i) there is at least one Outside Director and
(ii) the same shall be (a) in writing, (b) signed by
each of the parties hereto and (c) approved by a
majority of the Outside Directors, and then such waiver
or consent shall be effective only in the specific
instance and for the purpose for which given.
9.4 Governing Law. This Agreement shall
be construed in accordance with and governed by the
laws of the State of Delaware applicable to agreements
made and to be performed wholly within such
jurisdiction, without giving effect to the choice of
law provisions thereof. Each of the parties hereto
hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of
the State of Delaware for any litigation arising out
of, or relating to, this Agreement and the transactions
contemplated hereby (and agrees not to commence any
litigation relating thereto except in such courts).
Henkel Germany hereby irrevocably appoints Henkel
America as its agent to receive, on its behalf, service
of any process, summons, notice or other document.
Each Henkel Entity agrees that service of any process,
summons, notice or document by U.S. registered mail to
its respective address set forth in Section 9.5 hereof
shall be effective service of process for any
litigation brought against it in any such court. Each
of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of
venue of any litigation arising out of this Agreement
or the transactions contemplated hereby in the courts
of the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such
litigation brought in any such court has been brought
in an inconvenient forum.
9.5 Notices. All notices, requests,
demands, applications, services of process, and other
communications which are required to be or may be given
under this Agreement shall be deemed to have been duly
given if sent by telex, telecopy or facsimile
transmission or delivered or mailed, certified first
class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
To Loctite:
Loctite Corporation
10 Columbus Boulevard
Hartford, Connecticut 06106
Attention: General Counsel
With copies to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Arthur Fleischer, Jr., P.C.
To any Henkel Entity:
Henkel Corporation
2200 Renaissance Boulevard
Gulph Mills, Pennsylvania 19406
Attention: Ernest G. Szoke, Esq.
With copies to:
Henkel KGaA
67 Henkelstrasse
40191 Dusseldorf-1
Germany
Attention: Dr. Karl Gruter
and to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Alan Appelbaum;
or to such other address as any party shall furnish to
the other by notice given in accordance with this
Section 9.5. All such notices, requests, demands and
other communications shall be deemed to have been duly
given: at the time delivered by hand, if personally
delivered; three business days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business
day, if timely delivered (with charges prepaid) to a
recognized national air courier guaranteeing overnight
delivery.
9.6 Further Assurances. Each party
hereto shall do and perform or cause to be done and
performed all such further acts and things and shall
execute and deliver all such other agreements,
certificates, instruments and documents as any other
party may reasonably request in order to carry out the
intent and accomplish the purpose of this Agreement and
the consummation of the transactions contemplated
hereby.
9.7 Specific Performance. The parties
hereto hereby acknowledge that each party hereto would
suffer irreparable injury and would not have an
adequate remedy at law for money damages if the
provisions of this Agreement were not performed in
accordance with their terms. Each party hereto agrees
that the other parties hereto shall be entitled to
specific enforcement of the terms of this Agreement in
addition to any other remedy to which they are
entitled, at law or in equity. Furthermore, if any
action or proceeding shall be instituted to enforce the
provisions hereof, any party against whom such action
or proceeding is brought hereby waives the claim or
defense therein that there is an adequate remedy at
law, and agrees not to urge in any such action or
proceeding the claim or defense that such remedy at law
exists.
9.8 Joint and Several Liability.
Notwithstanding anything to the contrary in this
Agreement, it is expressly understood and agreed that
the obligations, covenants, agreements and duties of
each Henkel Entity under this Agreement shall be joint
and several and shall not be affected, modified or
impaired by the compromise, settlement, waiver, change,
modification, amendment (whether material or otherwise)
or termination of any or all of the obligations,
covenants, agreements or duties of any other Henkel
Entity under this Agreement or by the taking of, or the
failure to take, or any delay on the part of Loctite in
taking, any action against any Henkel Entity to
enforce, assert or exercise any right, power or remedy
conferred on Loctite by this Agreement or otherwise.
9.9 Termination. This Agreement shall
terminate and be of no further force and effect on
April 14, 2004, and upon the termination of this
Agreement, there shall be no liability on the part of
any party to this Agreement with respect to any of the
provisions hereof, with the sole exception that nothing
contained in this Agreement shall in any way relieve
any party hereto from liability for any breach of the
provisions of this Agreement for the period prior to
its termination.
9.10 Rights of Action. (a) Except as
set forth in this Section 9.10, nothing in this
Agreement shall be construed to give any person or
corporation (other than Loctite and the Henkel
Entities) any legal or equitable right, remedy or claim
under this Agreement. The parties agree that, at any
time (but only at such time) that there are no Outside
Directors, the rights of action by Loctite in respect
of this Agreement shall be vested in the respective
holders of shares of Common Stock; and any holder of
shares of Common Stock, without the consent of any
other holder of shares of Common Stock, may, on his own
behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding
against any party to this Agreement to enforce any
provision of this Agreement. Without limiting the
foregoing or any remedies available to the holders of
shares of Common Stock, it is specifically acknowledged
that the holders of shares of Common Stock 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 party subject to, this Agreement.
(b) Each of the Henkel Entities hereby
agrees that in connection with any action by Loctite to
enforce any provision of this Agreement against any of
the Henkel Entities, none of the Henkel Entities will
take any action that would directly or indirectly
prevent Loctite from making the necessary funds and
personnel available to appropriately pursue such
action.
9.11 Counterparts. This Agreement may be
executed in one or more counterparts, each of which
shall for all purposes be deemed an original and all of
which shall constitute the same instrument.
IN WITNESS WHEREOF, each of the parties
hereto has caused this Agreement to be duly executed on
its behalf as of the date first above written.
LOCTITE CORPORATION
By:___________________________
Name:
Title:
HENKEL KOMMANDITGESELLSCHAFT
AUF AKTIEN
By:___________________________
Name:
Title:
HENKEL CORPORATION
By:____________________________
Name:
Title:
HC INVESTMENTS, INC.
By:____________________________
Name:
Title:
<PAGE>
_______________________________________________________
AGREEMENT
among
LOCTITE CORPORATION
and
HENKEL KGaA, HENKEL CORPORATION
and HC INVESTMENTS, INC.
Dated as of April 14, 1994
_______________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Termination of the Standstill Agreement 2
Section 2. Shareholder Rights Agreement 2
2.1 Adoption 2
2.2 Prohibited Actions 2
2.2.1 Loctite 2
2.2.2 Henkel Entities 3
Section 3. Corporate Governance 4
3.1 Board of Directors 4
3.2 Committees 7
3.3 Dissolution of Shareholder Relations
Committee 7
3.4 Applicability 7
Section 4. Right of First Refusal 7
Section 5. Registration Rights 9
Section 6. Henkel Transferees 10
6.1 Permitted Transfers 10
6.2 Transferability 11
6.3 Distribution Transaction 11
Section 7. Associates of Henkel Entities 11
Section 8. Representations and Warranties 12
8.1 Loctite Share Ownership 13
Section 9. Miscellaneous 13
9.1 Entire Agreement 13
9.2 Binding Effect; Benefits; Assignment;
Survival 13
9.3 Amendments and Waivers 14
9.4 Governing Law 14
9.5 Notices 14
9.6 Further Assurances 15
9.7 Specific Performance 15
9.8 Joint and Several Liability 16
9.9 Termination 16
9.10 Rights of Action 16
9.11 Counterparts 17
Signatures 17
RIGHTS AGREEMENT
- ----------------
RIGHTS AGREEMENT, dated as of April 14,
1994 (the "Agreement"), between Loctite
Corporation, a Delaware corporation (the
"Corporation"), and The First National Bank of
Boston, a national banking association (the
"Rights Agent").
The Board of Directors of the Corporation
has authorized and declared a dividend of one right
(a "Right") for each Common Share (as hereinafter
defined) of the Corporation outstanding at the
close of business on April 25, 1994 (the
"Record Date"), each Right representing the right
to purchase one Common Share, upon the terms and
subject to the conditions herein set forth, and has
further authorized and directed the issuance of one
Right with respect to each Common Share that shall
become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date (as such terms
are hereinafter defined); provided, however, that
Rights may be issued with respect to Common Shares
that shall become outstanding after the
Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date in
accordance with the provisions of Section 22 of
this Agreement.
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 meanings indicated:
(a) "Acquiring Person" shall mean
any Person who or which, together with all
Affiliates and Associates of such Person, shall be
the Beneficial Owner of 10% or more of the then
outstanding Common Shares (other than as a result
of a Permitted Offer (as hereinafter defined)) or
was such a Beneficial Owner at any time after the
date hereof, whether or not such person continues
to be the Beneficial Owner of 10% or more of the
then outstanding Common Shares. Notwithstanding
the foregoing, (A) the term "Acquiring Person"
shall not include (i) the Corporation, (ii) any
Subsidiary of the Corporation, (iii) any employee
benefit plan of the Corporation or of any
Subsidiary of the Corporation, (iv) any Person or
entity organized, appointed or established by the
Corporation for or pursuant to the terms of any
such plan, or (v) any Grandfathered Stockholder and
(B) no Person (including, without limitation, any
Grandfathered Stockholder) shall become an
"Acquiring Person" (and no Grandfathered
Stockholder shall cease to be a Grandfathered
Stockholder):
(i) as a result of the
acquisition of Common Shares by the
Corporation which, by reducing the number of
Common Shares outstanding, increases the
proportional number of shares beneficially
owned by such Person together with all
Affiliates and Associates of such Person;
provided that if (1) a Person (including,
without limitation, any Grandfathered
Stockholder) would become an Acquiring Person
(but for the operation of this subclause (i))
as a result of the acquisition of Common
Shares by the Corporation, and (2) after such
share acquisition by the Corporation, such
Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any
additional Common Shares, then such Person
shall be deemed an Acquiring Person; or
(ii) if (1) within five
Business Days after such Person would
otherwise have become an Acquiring Person (but
for the operation of this subclause (ii)),
such Person notifies the Board of Directors
that such Person did so inadvertently, and
(2) within two Business Days after such
notification, such Person divests itself of a
sufficient number of Common Shares so that
such Person is the Beneficial Owner of such
number of Common Shares that such Person no
longer would be an Acquiring Person.
(b) "Act" shall mean the Securities
Act of 1933, as amended and as in effect on the
date of this Agreement.
(c) "Adverse Person" shall mean any
Person declared to be an Adverse Person by a
majority of the Unaffiliated Directors of the Board
of Directors of the Corporation after having
determined in its business judgment that beneficial
ownership by such Person of 10% or more of the
outstanding Common Shares would be reasonably
likely to materially adversely affect the
Corporation or its stockholders. In the event that
in reliance upon the representations and warranties
of any Person set forth in the Transferee Agreement
for such Person, the Transfer Certificate for such
Person and any other instrument or document
delivered to Loctite by such Person, the
Unaffiliated Directors determined that such Person
was not an Adverse Person, the Unaffiliated
Directors may at any time thereafter declare such
Person to be an Adverse Person as of the date of
such declaration if the Unaffiliated Directors
should at any time determine that any
representation and warranty made by such Person in
its Transferee Agreement, its Transferee
Certificate or any such other document or
instrument delivered to Loctite by such Person was
incorrect at the time that it was made, and upon
such declaration by the Unaffiliated Directors,
such Person shall no longer be deemed to be a
Permitted Transferee for any purpose under this
Agreement (including, without limitation, the
definition of Grandfathered Stockholder).
(d) "Affiliate" shall have the
meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Securities
Exchange Act of 1934, as amended and in effect on
the date of this Agreement (the "Exchange Act").
(e) "Associate" shall have the
meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange
Act; provided, however, that notwithstanding
anything herein to the contrary, no Person shall be
deemed an Associate of Henkel for any purpose
hereof or at any time hereunder.
(f) A Person shall be deemed the
"Beneficial Owner" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of
such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any
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, or upon the
exercise of conversion rights, exchange
rights, rights (other than the Rights),
warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own,
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 or exchange; 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 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 (or any Affiliate or Associate thereof)
with which such Person (or any of such
Person's Affiliates or Associates) has any
agreement, arrangement or understanding (other
than an agreement by Henkel to Transfer to a
proposed Permitted Transferee those Common
Shares subject to such proposed Permitted
Transfer and customary agreements with and
between underwriters and selling group members
with respect to a bona fide public offering of
securities) relating to the acquisition,
holding, voting (except to the extent
contemplated by the proviso to Section
l(f)(ii)(B)) or disposing of any securities of
the Corporation.
Notwithstanding anything in this
definition of Beneficial Ownership to the contrary,
(A) Henkel shall not be deemed the Beneficial Owner
of, or to beneficially own, any Common Shares held
by any member of the Krieble Family Group as a
result of the right of first refusal over such
Common Shares held by Henkel until and to the
extent that Henkel has exercised its right of first
refusal and purchased such Common Shares; (B) the
phrase "then outstanding", when used with reference
to a Person's Beneficial Ownership of securities of
the Corporation, shall mean the number of such
securities then issued and outstanding together
with the number of such securities not then
actually issued and outstanding which such Person
would be deemed to own beneficially hereunder; and
(C) the Corporation shall not be deemed the
Beneficial Owner of, or to beneficially own, any
Common Shares held by any member of the Krieble
Family Group as a result of the right of first
refusal over such Common Shares that may from time
to time be held by the Corporation and such Common
Shares shall be deemed issued and outstanding for
all purposes hereunder, in each case, until and to
the extent that the Corporation has exercised its
right of first refusal and purchased such Common
Shares.
(g) "Business Day" shall mean any
day other than a Saturday, Sunday or federal
holiday.
(h) "Close of business" on any given
date shall mean 5:00 P.M., Boston time, on such
date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time,
on the next succeeding Business Day.
(i) "Common Shares" when used with
reference to the Corporation shall mean the shares
of Common Stock, par value $0.01 per share, of the
Corporation or, in the event of a subdivision,
combination or consolidation with respect to such
shares of Common Stock, the shares of Common Stock
resulting from such subdivision, combination or
consolidation. "Common Shares" when used with
reference to any Person other than the Corporation
shall mean the capital stock (or 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.
(j) "Disinterested Director" means
any director of the Board of Directors of the
Corporation who is neither an officer or employee
of the Corporation nor any Person proposing or
attempting to effect a business combination or
similar transaction with the Corporation
(including, without limitation, a merger, tender
offer or exchange offer, sale of substantially all
of the Corporation's assets, or liquidation of the
Corporation's assets), any Affiliate or Associate
of such Person or any other Person acting directly
or indirectly on behalf of, or as a representative
of, or in concert with, any such Person, Affiliate
or Associate.
(k) "Distribution Date" shall have
the meaning set forth in Section 3 hereof.
(l) "Distribution Transaction" means
any Transfer of Common Shares by Henkel (i)
pursuant to a public offering of those Common
Shares registered under Section 5 of the Securities
Act of 1933, as amended (the "Securities Act"), in
connection with which, each of the underwriters for
such public offering certifies to the Corporation
that such Common Shares were widely distributed in
connection with such public offering and that, to
the best of such underwriter's knowledge, (A) no
transferee of such Common Shares in such public
offering beneficially owns, together with the
Affiliates and Associates of such transferee and
after giving effect to the sale of such Common
Shares in such public offering, more than 1.0% of
the then outstanding Common Shares and (B) no more
than three transferees of such Common Shares in
such public offering beneficially own, in each case
together with the Affiliates and Associates of such
transferee and after giving effect to the sale of
such Common Shares in such public offering, more
than 0.5% of the then outstanding Common Shares; or
(ii) pursuant to a broker's transaction made in
compliance with the requirements of Rule 144
promulgated under the Securities Act and in
connection with which, the broker who effects such
broker's transaction certifies to the Corporation
that such Common Shares were widely distributed in
connection with such broker's transaction and, to
the best of such broker's knowledge, (A) no
transferee of such Common Shares in such broker's
transaction beneficially owns, together with the
Affiliates and Associates of such transferee and
after giving effect to the sale of such Common
Shares in such broker's transaction, more than 1.0%
of the then outstanding Common Shares and (B) no
more than three transferees of such Common Shares
in such broker's transaction beneficially own, in
each case together with the Affiliates and
Associates of such transferee and after giving
effect to the sale of such Common Shares in such
broker's transaction, more than 0.5% of the then
outstanding Common Shares.
(m) "Final Expiration Date" shall
have the meaning set forth in Section 7 hereof.
(n) "Grandfathered Stockholder"
shall mean (i) Henkel, (ii) Mr. Robert H. Krieble,
Ms. Nancy B. Krieble, Mr. Frederick B. Krieble, Ms.
Collette C. Krieble, Mr. James P. Fusscas, Ms.
Helen K. Fusscas, Mr. Martin Wolman, Management I,
Limited and Management II, Limited, as a "group"
(as such term is defined or used under Rule 13d-
5(b) of the General Rules and Regulations under the
Exchange Act) (collectively as such group, the
"Krieble Family Group") and (iii) any Permitted
Transferee; provided, however, that, except as
provided in Section 1(a)(B) hereof, (A) Henkel
shall cease to be a Grandfathered Stockholder at
the time after the date hereof, Henkel, together
with all Affiliates of Henkel, beneficially owns a
percentage of the outstanding Common Shares in
excess of the Henkel Percentage then in effect
(other than as a result of a Permitted Offer),
(B) the Krieble Family Group shall cease to be a
Grandfathered Stockholder at the time after the
date hereof any member of the Krieble Family Group,
or an Affiliate or Associate of any such member of
the Krieble Family Group, beneficially owns any
additional Common Shares (other than as a result of
a stock dividend, a stock split, a grant by the
Corporation pursuant to a directors benefit plan
established by the Corporation of Common Shares or
options to purchase Common Shares (and the exercise
thereof) or a Permitted Offer), and (C) any
Permitted Transferee shall cease to be a
Grandfathered Stockholder at the time such
Permitted Transferee, or an Affiliate or Associate
of such Permitted Transferee, beneficially owns any
additional Common Shares (other than as a result of
a stock dividend, a stock split or a Permitted
Offer).
(o) "Henkel" shall mean Henkel
Corporation, a Delaware corporation.
(p) "Henkel Percentage" shall mean
35% on the date hereof. From and after the date
hereof, the Henkel Percentage shall be subject to
adjustment, as follows: (i) in the event of any
Transfer of Common Shares by Henkel or any of its
Affiliates (other than to an Affiliate of Henkel)
by any means other than a Distribution Transaction,
the Henkel Percentage then in effect shall be
reduced by the Transfer Percentage in respect of
such Transfer, (ii) in the event of Transfers of
Common Shares aggregating more than 10% of the
outstanding Common Shares by Henkel or any of its
Affiliates by means of Distribution Transactions,
the Henkel Percentage then in effect shall be
reduced by the aggregate Transfer Percentages in
respect of such Transfers aggregating more than 10%
of the outstanding Common Shares and (iii) in the
event the Corporation acquires any Common Shares,
the Henkel Percentage immediately following such
acquisition shall be equal to the greater of
(A) the Henkel Percentage immediately prior to such
acquisition and (B) the percentage of the
outstanding Common Shares beneficially owned by
Henkel immediately following such acquisition.
(q) "Interested Stockholder" shall
mean any Acquiring Person or any Affiliate or
Associate of an Acquiring Person or any other
Person in which any such Acquiring Person,
Affiliate or Associate has an interest, or any
other Person acting directly or indirectly on
behalf of or in concert with any such Acquiring
Person, Affiliate or Associate.
(r) "Permitted Offer" shall mean a
tender or exchange offer for all outstanding Common
Shares (A) which is at a price and on terms
determined, prior to the purchase of shares under
such tender or exchange offer, by at least (i) a
majority of the Disinterested Directors and (ii) a
majority of all of the members of the Board of
Directors, to be adequate (taking into account all
factors that such directors deem relevant) and
otherwise in the best interests of the Corporation,
its stockholders and its other relevant
constituencies (other than the Person or any
Affiliate or Associate thereof on whose basis the
offer is being made) taking into account all
factors that such directors may deem relevant or
(B) (i) which remains open for a period of at least
60 days after the tender or exchange offer has
commenced and (ii) the consummation of which
results in the Person on whose basis the tender or
exchange offer is made becoming the Beneficial
Owner of more than 50% of the outstanding Common
Shares.
(s) "Permitted Transfer" means any
Transfer of Common Shares by Henkel, by the Krieble
Family Group as a whole, or by any Permitted
Transferee (i) to any Person that (A) has not been
declared an Adverse Person by the Unaffiliated
Directors, (B) does not beneficially own, after
giving effect to such Transfer, (1) in the case of
a Transfer from the Krieble Family Group or any
Permitted Transferee, any Common Shares other than
the Common Shares transferred by the Krieble Family
Group or such Permitted Transferee, as applicable,
to such Person in such Transfer, or (2) in the case
of a Transfer from Henkel, a percentage of the then
outstanding Common Shares in excess of the lesser
of (I) the Henkel Percentage in effect immediately
prior to such proposed Permitted Transfer and (II)
the sum of 0.3% of the then outstanding Common
Shares and the percentage of the then outstanding
Common Shares to be transferred by Henkel to such
Person in such proposed Permitted Transfer, (C) at
least 30 days prior to the consummation of such
Transfer, executes and delivers to the Corporation
an agreement, substantially in the form of Exhibit
A-1 attached hereto (a "Transferee Agreement") and
(D) immediately prior to the consummation of such
Transfer, executes and delivers to the Corporation
an executive officer's certificate, substantially
in the form of Exhibit A-2 attached hereto (a
"Transferee Certificate") and (ii) that is
consummated on the "Closing Date" referred to in
the Transferee Agreement for such proposed
Permitted Transfer and pursuant to the terms and
conditions set forth in the "Acquisition Agreement"
referred to in such Transferee Agreement.
(t) "Permitted Transferee" means any
transferee of Common Shares pursuant to a Permitted
Transfer.
(u) "Person" shall mean any
individual, firm, partnership, corporation, trust,
association, joint venture or other entity, and
shall include any successor (by merger or
otherwise) of such entity.
(v) "Redemption Date" shall have the
meaning set forth in Section 7 hereof.
(w) "Section 11(a)(ii) Event" shall
mean any event described in Section 11(a)(ii)
hereof.
(x) "Section 13 Event" shall mean
any event described in clause (x), (y) or (z) of
Section 13(a) hereof.
(y) "Shares 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 the
Exchange Act) by the Corporation or an Acquiring
Person that an Acquiring Person has become such.
(z) "Subsidiary" of any Person shall
mean any corporation or other Person of which a
majority of the voting power of the voting equity
securities or equity interest is owned, directly or
indirectly, by such Person.
(aa) "Transfer" shall mean any sale,
assignment, transfer or other disposition.
(bb) "Transfer Percentage" means with
respect to any Transfer of Common Shares, the
percentage of the then outstanding Common Shares
subject to such Transfer.
(cc) "Triggering Event" shall mean
any Section 11(a)(ii) Event or any Section 13
Event.
<PAGE>
(dd) "Unaffiliated Director" means,
with respect to any proposed Permitted Transfer,
any director of the Board of Directors of the
Corporation who is neither a nominee or
representative of the proposed transferor in
respect of such Proposed Transfer, or any Affiliate
or Associate of such proposed transferor, nor an
officer or employee of the Corporation.
Section 2. Appointment of Rights Agent.
The Corporation hereby appoints the Rights Agent to
act as agent for the Corporation and the holders of
the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also
be the holders of Common Shares) in accordance with
the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The
Corporation 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 earlier of (i) the Shares
Acquisition Date or (ii) the close of business on
the tenth day (or such later date as may be
determined by action of the Corporation's Board of
Directors) after the date of the commencement by
any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit
plan of the Corporation or of any Subsidiary of the
Corporation or any Person or entity organized,
appointed or established by the Corporation for or
pursuant to the terms of any such plan) of, or of
the first public announcement of the intention of
any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit
plan of the Corporation or of any Subsidiary of the
Corporation or any Person or entity organized,
appointed or established by the Corporation for or
pursuant to the terms of any such plan) to commence
(which intention to commence remains in effect for
five Business Days after such announcement), a
tender or exchange offer the consummation of which
would result in any Person becoming an Acquiring
Person (including, in the case of both (i) and
(ii), any such date which is after the date of this
Agreement and prior to the issuance of the Rights),
the earlier of such dates being herein referred to
as the "Distribution Date", (x) the Rights will be
evidenced (subject to the provisions of Section
3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof
(which certificates shall also be deemed to be
Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right
Certificates will be transferable only in
connection with the transfer of the underlying
Common Shares (including a transfer to the
Corporation); provided, however, that if a tender
offer prior to the occurrence of a Distribution
Date is terminated, then no Distribution Date shall
occur as a result of such tender offer. As soon as
practicable after the Distribution Date, the
Corporation will prepare and execute, the Rights
Agent will countersign, and the Corporation will
send or cause to be sent by first-class, postage-
prepaid mail, to each record holder of Common
Shares as of the close of business on the
Distribution Date, at the address of such holder
shown on the records of the Corporation, a Right
Certificate, substantially in the form of Exhibit B
hereto (a "Right Certificate"), evidencing one
Right for each Common Share so held. As of and
after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable
following the Record Date, the Corporation will
send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record
holder of Common Shares as of the close of business
on the Record Date, at the address of such holder
shown on the records of the Corporation. With
respect to certificates for Common Shares
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 a copy of the Summary
of Rights attached thereto. Until the Distribution
Date (or the earlier of the Redemption Date or the
Final Expiration Date), the surrender for transfer
of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated
with such Common Shares.
(c) Certificates for Common Shares
which become outstanding (including, without
limitation, reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the
Distribution Date, and the Redemption Date or the
Final Expiration Date shall be deemed also to be
certificates for Rights, and shall bear the
following legend:
This certificate also evidences and
entitles the holder hereof to certain
rights as set forth in a Rights Agreement
between Loctite Corporation and The First
National Bank of Boston, dated as of April
14, 1994 (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 Loctite Corporation. 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.
Loctite Corporation 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 set forth in the Rights
Agreement, Rights issued to, or
held by, any Person who is, was or becomes
an Acquiring Person or an Affiliate or
Associate thereof (as defined in the
Rights Agreement) and certain related
persons, whether currently held by or on
behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares
represented by such certificates shall be evidenced
by such certificates alone, and the surrender for
transfer of any such certificate shall also
constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the
event that the Corporation purchases or acquires
any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled
and retired so that the Corporation shall not be
entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificate.
(a) The Right Certificates (and the forms of
election to purchase and of assignment to be
printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or
designation and such legends, summaries or
endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be
required to comply with any applicable law or with
any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange
on which the Rights may from time to time be
listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the
Right Certificates shall entitle the holders
thereof to purchase such number of Common Shares as
shall be set forth therein at the price per Common
Share set forth therein (the "Purchase Price"), but
the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued
pursuant to Section 3(a) or Section 22 hereof that
represents Rights which are null and void pursuant
to Section 7(e) of this Agreement and any Right
Certificate issued pursuant to Section 6 or Section
11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred
to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an
Acquiring Person (as such terms are
defined in the Rights Agreement).
Accordingly, this Right Certificate and
the Rights represented hereby are null and
void.
Provisions of Section 7(e) of this Rights Agreement
shall be operative whether or not the foregoing
legend is contained on any such Right Certificate.
Section 5.
Countersignature and Registration. The Right
Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice
Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the
Corporation's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant
Secretary of the Corporation, either manually or by
facsimile signature. The Right Certificates shall
be countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned.
In case any officer of the Corporation who shall
have signed any of the Right Certificates shall
cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance
and delivery by the Corporation, such Right
Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the
Corporation with the same force and effect as
though the person who signed such Right
Certificates had not ceased to be such officer of
the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any person
who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the
Corporation to sign such Right Certificate,
although at the date of the execution of this
Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
office designated as the appropriate place for
surrender of such Right Certificate or transfer,
books for registration and transfer of the Right
Certificates issued hereunder. Such books shall
show the names and addresses of the respective
holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right
Certificates and the certificate number and the
date of each of the Right Certificates.
Section 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated, Destroye
d, Lost or Stolen Right Certificate. Subject to
the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like
number of Common Shares as the Right Certificate or
Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any 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 of the Rights Agent
designated for such purpose. Neither the Rights
Agent nor the Corporation shall be obligated to
take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate
until the registered holder shall have completed
and signed the certificate contained in the form of
assignment on the reverse side of such Right
Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or
Associates thereof as the Corporation shall
reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so
requested. The Corporation 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.
Upon receipt by the Corporation 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 Corporation's
request, reimbursement to the Corporation 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 Corporation will make and deliver a new Right
Certificate of like tenor to the Rights Agent for
countersignature and 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) Subject to Section
7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with
the form of election to purchase and the
certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated
for such purpose, together with payment of the
aggregate Purchase Price for the total number of
Common Shares (or other securities, as the case may
be) as to which such surrendered Rights are
exercised, at or prior to the earliest of (i) the
close of business on April 14, 2004 (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
consummation of a transaction contemplated by
Section 13(d) hereof.
(b) The Purchase Price for each
Common Share pursuant to the exercise of a Right
shall initially be $175.00, shall be subject to
adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable
in accordance with paragraph (c) below.
(c) Upon receipt of a Right
Certificate representing exercisable Rights, with
the form of election to purchase and the
certificate duly executed, accompanied by payment
of the Purchase Price for the Common Shares (or
other securities, as the case may be) 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 6
hereof by certified check, cashier's check or money
order payable to the order of the Corporation, the
Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common
Shares certificates for the number of Common Shares
to be purchased and the Corporation hereby
irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Corporation,
in its sole discretion, shall have elected to
deposit the Common Shares issuable upon exercise of
the Rights hereunder into a depositary, requisition
from the depositary agent depositary receipts
representing such number of Common Shares as are to
be purchased (in which case certificates for the
Common Shares represented by such receipts shall be
deposited by the transfer agent with the depositary
agent) and the Corporation will direct the
depositary agent to comply with such requests, (ii)
when appropriate, requisition from the Corporation
the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered
to or upon the order of the registered holder of
such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv)
when appropriate, after receipt thereof, deliver
such cash to or upon the order of the registered
holder of such Right Certificate. In the event
that the Corporation is obligated to issue other
securities of the Corporation pursuant to Section
11(a) hereof, the Corporation will make all
arrangements necessary so that such other
securities are available for distribution by the
Rights Agent, if and when appropriate.
In addition, in the case of an exercise of
the Rights by a holder pursuant to Section
11(a)(ii), the Rights Agent shall return such Right
Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating
thereon that the rights represented by such Right
Certificate no longer include the rights provided
by Section 11(a)(ii) of the Rights Agreement and if
less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent
shall indicate on the Right Certificate the number
of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii).
(d) In case the registered holder of
any Right Certificate shall exercise less than all
the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the
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, or
the Rights Agent shall place an appropriate
notation on the Right Certificate with respect to
those Rights exercised.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a
transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of
any Affiliate or Associate thereof) who becomes a
transferee prior to or concurrently with the
Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring
Person has a continuing agreement, arrangement or
understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the
Corporation has determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this
Section 7(e), shall become null and void without
any further action and no holder of such Rights
shall have any rights whatsoever with respect to
such Rights, whether under any provision of this
Agreement or otherwise. The Corporation shall use
all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no
liability to any holder of 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.
(f) Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent
nor the Corporation shall be obligated to undertake
any action with respect to a registered holder upon
the occurrence of any purported exercise as set
forth in this Section 7 unless such registered
holder shall have (i) completed and signed the
certificate contained in the form of election to
purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the
identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates
thereof as the Corporation 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 Corporation
or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The
Corporation 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
Corporation otherwise than upon the exercise
thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Corporation, or
shall, at the written request of the Corporation,
destroy such canceled Right Certificates, and in
such case shall deliver a certificate of
destruction thereof to the Corporation.
Section 9.
Reservation and Availability of Common Shares. The
Corporation covenants and agrees that at all times
prior to the occurrence of a Section 11(a)(ii)
Event it will cause to be reserved and kept
available out of its authorized and unissued Common
Shares, or any authorized and issued Common Shares
held in its treasury, the number of Common Shares
that will be sufficient to permit the exercise in
full of all outstanding Rights and, after the
occurrence of a Section 11(a)(ii) Event, shall, to
the extent reasonably practicable, so reserve and
keep available a sufficient number of Common Shares
(and/or other securities) which may be required to
permit the exercise in full of the Rights pursuant
to this Agreement.
So long as the Common Shares (or other
securities, as the case may be) issuable upon the
exercise of the Rights may be listed on any
national securities exchange, the Corporation
shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such
exercise.
The Corporation covenants and agrees that
it will take all such action as may be necessary to
ensure that all Common Shares (or other securities,
as the case may be) delivered upon exercise of
Rights shall, at the time of delivery of the
certificates for such shares or other securities
(subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid
and non-assessable shares or securities.
The Corporation further covenants and
agrees that it will pay when due and payable any
and all U.S. 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 Common Shares (or other securities, as the
case may be) upon the exercise of Rights. The
Corporation shall not, however, be required to pay
any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of
certificates or depositary receipts for the Common
Shares (or other securities, as the case may be) in
a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered
for exercise, or to issue or to deliver any
certificates or depositary receipts for Common
Shares (or other securities, as the case may be)
upon the exercise of any Rights, until any such tax
shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of
surrender) or until it has been established to the
Corporation's reasonable satisfaction that no such
tax is due.
The Corporation shall use its best efforts
to (i) file, as soon as practicable following the
Shares Acquisition Date (or, if required by law, at
such earlier time following the Distribution Date
as so required), a registration statement under the
Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become
effective as soon as practicable after such filing,
and (iii) cause such registration statement to
remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules
and regulations thereunder) until the date of the
expiration of the rights provided by Section
11(a)(ii). The Corporation will also take such
action as may be appropriate under the blue sky
laws of the various states.
Section 10. Common Shares Record Date.
Each person in whose name any certificate for
Common Shares (or other securities, as the case may
be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of
record of the Common Shares (or other securities,
as the case may be) represented thereby on, and
such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such
surrender and payment is a date upon which the
Common Shares (or other securities, as the case may
be) transfer books of the Corporation 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 Shares (or other
securities, as the case may be) transfer books of
the Corporation are open.
Section 11.
Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase
Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided
in this Section 11.
(a)(i) In the event the Corporation
shall at any time after the date of this Agreement
(A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding
Common Shares, (C) combine the outstanding Common
Shares into a smaller number of Common Shares or
(D) issue any shares of its capital stock in a
reclassification of the Common Shares (including
any such reclassification in connection with a
consolidation or merger in which the Corporation is
the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and
Section 7(e) hereof, 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 Shares transfer
books of the Corporation were open, such 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 Corporation issuable
upon exercise of one Right. If an event occurs
which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall
be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event any Person,
alone or together with its Affiliates and
Associates, shall become an Acquiring Person, then
proper provision shall be made so that each holder
of a Right (except as provided below and in Section
7(e) hereof) shall, for a period of 60 days after
the later of the occurrence of any such event or
the effective date of an appropriate registration
statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise
thereof at a price equal to the then current
Purchase Price, in accordance with the terms of
this Agreement, such number of Common Shares as
shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number
of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and dividing that product
by (y) 50% of the then current per share market
price of the Corporation's Common Shares
(determined pursuant to Section 11(d) hereof) on
the date of such first occurrence (such number of
shares being referred to as the
"Adjustment Shares"); provided, however, that if
the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there
shall not be sufficient treasury shares or
authorized but unissued (and unreserved) Common
Shares to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii)
and the Rights become so exercisable,
notwithstanding any other provision of this
Agreement, to the extent necessary and permitted by
applicable law, each Right shall thereafter
represent the right to receive, upon exercise
thereof at the then current Purchase Price in
accordance with the terms of this Agreement, (x) a
number of (or fractions of) Common Shares (up to
the maximum number of Common Shares which may
permissibly be issued) and (y) a number of (or
fractions of) other equity securities of the
Corporation (or, in the discretion of the Board of
Directors of the Corporation, debt) which the Board
of Directors of the Corporation has determined to
have the same aggregate current market value
(determined pursuant to Section 11(d)(i) and (ii)
hereof, to the extent applicable) as one Common
Share (such number of (or fractions of) Common
Shares (or other equity securities or debt of the
Corporation) being referred to as a "capital stock
equivalent"), equal in the aggregate to the number
of Adjustment Shares; provided, however, if
sufficient Common Shares and/or capital stock
equivalents are unavailable, then the Corporation
shall, to the extent permitted by applicable
law, take all such action as may be necessary to
authorize additional Common Shares or capital stock
equivalents for issuance upon exercise of the
Rights, including the calling of a meeting of
stockholders; and provided, further, that if the
Corporation is unable to cause sufficient Common
Shares and/or capital stock equivalents to be
available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent
the right to receive the Adjusted Number of Shares
upon exercise at the Adjusted Purchase Price (as
such terms are hereinafter defined). As used
herein, the term "Adjusted Number of Shares" shall
be equal to that number of (or fractions of) Common
Shares (and/or capital stock equivalents) equal to
the product of (x) the number of Adjustment Shares
and (y) a fraction, the numerator of which is the
number of Common Shares (and/or capital stock
equivalents) available for issuance upon exercise
of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise
issuable upon exercise in full of all Rights
(assuming there were a sufficient number of Common
Shares available) (such fraction being referred to
as the "Proration Factor"). The
"Adjusted Purchase Price" shall mean the product of
the Purchase Price and the Proration Factor. The
Board of Directors of the Corporation may, but
shall not be required to, establish procedures to
allocate the right to receive Common Shares and
capital stock equivalents upon exercise of the
Rights among holders of Rights.
(b) In case the Corporation shall
fix a record date for the issuance of rights (other
than the Rights), options or warrants to all
holders of Common Shares entitling them (for a
period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common
Shares (or shares having the same rights and
privileges as the Common Shares
("equivalent common shares")) or securities
convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent
common share (or having a conversion price per
share, if a security convertible into Common Shares
or equivalent common shares) less than the then
current per share market price of the Common Shares
(as 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 Common Shares outstanding on such record
date plus the number of Common Shares which the
aggregate offering price of the total number of
Common Shares 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 per share
market price, and the denominator of which shall be
the number of Common Shares outstanding on such
record date plus the number of additional Common
Shares 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 Corporation 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 determined in good faith by
the Board of Directors of the Corporation, whose
determination shall be described in a statement
filed with the Rights Agent and shall be binding on
the Rights Agent. Common Shares owned by or held
for the account of the Corporation shall not be
deemed outstanding for the purpose of any such
computation. Such adjustment shall be made
successively whenever such a record date is fixed;
and in the event that such rights, options or
warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not
been fixed.
(c) In case the Corporation shall
fix a record date for the making of a distribution
to all holders of the Common Shares (including any
such distribution made in connection with a
consolidation or merger in which the Corporation 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 Shares) 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 (as determined
pursuant to Section 11(d) hereof) of the Common
Shares on such record date, less the fair market
value (as determined in good faith by the Board of
Directors of the Corporation, whose determination
shall be described in a statement filed with the
Rights Agent and shall be binding on 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
Common Share and the denominator of which shall be
such current per share market price of the Common
Shares; 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 Corporation to
be issued upon exercise of one Right. Such
adjustments shall be made successively whenever
such a record date is fixed; and in the event that
such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record
date had not been fixed.
(d)(i) For the purpose of any
computation hereunder, the
"current per share market price" of any security (a
"Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of
such Security for the thirty (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 thirty
(30) Trading Days after the ex-dividend date for
such dividend or distribution, or the record date
for such subdivision, combination or
reclassification, then, and in each such case, the
current per share market price shall be
appropriately adjusted to reflect the current
market price per share equivalent of such Security.
The closing price for each day shall be the last
sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing
bid and asked prices, regular way, in either case
as reported 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 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 the National Association of Securities
Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if
on any such date the 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
Corporation. If on any such date no such market
maker is making a market in the Security, the fair
value of the Security on such date as determined in
good faith by the Board of Directors of the
Corporation shall be used. 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.
(ii) For the purpose of any
computation hereunder, the
"current per share market price" of the Common
Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the
Common Shares are not publicly traded, the "current
per share market price" of the Common Shares shall
mean the fair value per share as determined in good
faith by the Board of Directors of the Corporation,
whose determination shall be described in a
statement filed with the Rights Agent and shall be
binding on the Rights Agent.
(e) Notwithstanding anything herein
to the contrary, no adjustment in the Purchase
Price shall be required unless such adjustment
would require an increase or decrease of at least
1% 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 hundred thousandth of a Common Share or
thousandth of any 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 (3) years from the date of the
transaction which mandates such adjustment or
(ii) the Final Expiration Date.
(f) If as a result of an adjustment
made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter
exercised shall become entitled to receive any
shares of capital stock of the Corporation other
than Common Shares, thereafter the number of other
shares so receivable upon exercise of any 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 Shares contained in Section 11(a) through
(c), inclusive, and the provisions of Sections 7,
9, 10, 13 and 14 with respect to the Common Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by
the Corporation subsequent to any adjustment made
to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price,
the number of Common Shares purchasable from time
to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Corporation shall
have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of Common
Shares (calculated to the nearest thousandth of a
Common Share) obtained by (i) multiplying (x) the
number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in
effect immediately after such adjustment of the
Purchase Price.
(i) The Corporation may elect on or
after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in lieu of
any adjustment in the number of Common Shares
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 Common Shares 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 thousandth)
obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The
Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be
made. This record date may be the date on which
the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have
been issued, shall be at least ten (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 Corporation 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 Corporation,
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 Corporation, new Right
Certificates evidencing all the Rights to which
such holders shall be entitled after such
adjustment. Right Certificates so to be
distributed shall be issued, executed and
countersigned in the manner provided for herein and
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
Common Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and
thereafter issued may continue to express the
Purchase Price and the number of Common Shares
which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that
would cause an adjustment reducing the Purchase
Price below the then par value, if any, of the
number of Common Shares or other securities
issuable upon exercise of the Rights, the
Corporation shall take any corporate action which
may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally
issue such number of fully paid and non-assessable
Common Shares or other securities 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 Corporation may
elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised
after such record date the Common Shares or other
securities of the Corporation, if any, issuable
upon such exercise over and above the Common Shares
or other securities of the Corporation, if any,
issuable upon exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided,
however, that the Corporation 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) Notwithstanding anything in this
Section 11 to the contrary, the Corporation shall
be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent
that it in its sole discretion shall determine to
be advisable in order that (i) any consolidation or
subdivision of the Common Shares, (ii) issuance
wholly for cash of Common Shares at less than the
current market price, (iii) issuance wholly for
cash of Common Shares or securities which by their
terms are convertible into or exchangeable for
Common Shares, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this
Section 11, hereafter made by the Corporation to
holders of its Common Shares shall not be taxable
to such stockholders.
(n) The Corporation covenants and
agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Corporation
in a transaction which does not violate
Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the
Corporation in a transaction which does not violate
Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in
one transaction, or a series of related
transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the
Corporation and/or any of its Subsidiaries in one
or more transactions each of which does not violate
Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale
or transfer there are any charter or by-law
provisions or any rights, warrants or other
instruments or securities outstanding or agreements
in effect or other actions taken, which would
materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or
would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned
by such Person or any of its Affiliates and
Associates. The Corporation shall not consummate
any such consolidation, merger, sale or transfer
unless prior thereto the Corporation and such other
Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).
(o) The Corporation covenants and
agrees that, after the Distribution Date, it will
not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary
to take) any action the purpose of which is to, or
if at the time such action is taken it is
reasonably foreseeable that the effect of such
action is to, materially diminish or otherwise
eliminate the benefits intended to be afforded by
the Rights.
(p) Notwithstanding anything in this
Agreement to the contrary, in the event that at any
time after the date of this Agreement and prior to
the Distribution Date, the Corporation shall (i)
declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares) into
a greater or lesser number of Common Shares, then
in any such case, the number of Rights associated
with each Common Share then outstanding, or issued
or delivered thereafter but prior to the
Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter
associated with each Common Share following any
such event shall equal the result obtained by
multiplying the number of Rights associated with
each Common Share immediately prior to such event
by a fraction the numerator of which shall be the
total number of Common Shares outstanding
immediately prior to the occurrence of the event
and the denominator of which shall be the total
number of Common Shares outstanding immediately
following the occurrence of such event. The
adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend
is declared or paid or such a subdivision,
combination or consolidation is effected.
(q) The exercise of Rights under
Section 11(a)(ii) shall only result in the loss of
rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights
represented by the Rights under this Rights
Agreement, including the rights represented by
Section 13.
Section 12. Certificate of Adjusted
Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 or 13
hereof, the Corporation 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 Shares 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. 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 such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale
or Transfer of Assets or Earning Power. (a) In
the event that, on or following the Shares
Acquisition Date, directly or indirectly, (x) the
Corporation shall consolidate with, or merge with
and into, any Interested Stockholder, or if in such
merger or consolidation all holders of Common
Shares are not treated alike, any other Person,
(y) the Corporation shall consolidate with, or
merge with, any Interested Stockholder, or if in
such merger or consolidation all holders of Common
Shares are not treated alike, any other Person, and
the Corporation shall be the continuing or
surviving corporation of such consolidation or
merger (other than, in a case of any transaction
described in (x) or (y), a merger or consolidation
which would result in all of the securities
generally entitled to vote in the election of
directors ("voting securities") of the Corporation
outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by
being converted into securities of the surviving
entity) all of the voting securities of the
Corporation or such surviving entity outstanding
immediately after such merger or consolidation and
the holders of such securities not having changed
as a result of such merger or consolidation), or
(z) the Corporation shall sell or otherwise
transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or
a series of related transactions, assets or earning
power aggregating more than 50% of the assets or
earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders or if in such
transaction all holders of Common Shares are not
treated alike, any other Person (other than the
Corporation or any Subsidiary of the Corporation in
one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each
such case (except as provided in Section 13(d)
hereof), proper provision shall be made so that
(i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at a
price equal to the then current Purchase Price, in
accordance with the terms of this Agreement and in
lieu of Common Shares, such number of freely
tradeable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other
adverse claims, as shall equal the result obtained
by (A) multiplying the then current Purchase Price
by the number of Common Shares for which a Right is
then exercisable (without taking into account any
adjustment previously made pursuant to
Section 11(a)(ii)) and dividing that product by
(B) 50% of the then current per share market price
of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on
the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of
the Corporation pursuant to this Agreement;
(iii) the term "Corporation" shall thereafter be
deemed to refer to such Principal Party, it being
specifically intended that the provisions of
Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a
Section 13 Event; and (iv) such Principal Party
shall take such steps (including, but not limited
to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation
of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any
transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the
Person that is the issuer of any securities
into which Common Shares of the Corporation
are converted in such merger or consolidation,
and if no securities are so issued, the Person
that is the other party to such merger or
consolidation (including, if applicable, the
Corporation if it is the surviving
corporation); and
(ii) in the case of any
transaction described in clause (z) of the
first sentence of Section 13(a), the Person
that is the party receiving the greatest
portion of the assets or earning power
transferred pursuant to such transaction or
transactions; provided, however, that in any of the foregoing
cases, (1) if the Common Shares of such Person are
not at such time and have not been continuously
over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary
of another Person the Common Shares of which are
and have been so registered, "Principal Party"
shall refer to such other Person; (2) in case such
Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or
more of which are and have been so registered,
"Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having
the greatest aggregate market value; and (3) in
case such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the
same Person, the rules set forth in (1) and (2)
above shall apply to each of the chains of
ownership having an interest in such joint venture
as if such party were a "Subsidiary" of both or all
of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to
the total of such interests.
(c) The Corporation shall not
consummate any such consolidation, merger, sale or
transfer unless the Principal Party shall have a
sufficient number of its authorized Common Shares
which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior
thereto the Corporation and such Principal Party
shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as
practicable after the date of any consolidation,
merger, sale or transfer mentioned in paragraph (a)
of this Section 13, the Principal Party at its own
expense shall:
(i) prepare and file a
registration statement under the Act with
respect to the Rights and the securities
purchasable upon exercise of the Rights on an
appropriate form, and use its best efforts to
cause such registration statement to
(A) become effective as soon as practicable
after such filing and (B) remain effective
(with a prospectus at all times meeting the
requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to
qualify or register the Rights and the
securities purchasable upon exercise of the
Rights under the blue sky laws of such
jurisdictions as may be necessary or
appropriate; and
(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 under the Exchange Act.
The provisions of this Section 13 shall
similarly apply to successive mergers or
consolidations or sales or other transfers. The
rights under this Section 13 shall be in addition
to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any
exercise thereof.
(d) Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if:
(i) such transaction is consummated with a Person
or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly owned Subsidiary of
any such Person or Persons); (ii) the price per
Common Share offered in such transaction is not
less than the price per Common Share paid to all
holders of Common Shares whose shares were
purchased pursuant to such Permitted Offer; and
(iii) the form of consideration offered in such
transaction is the same as the form of
consideration paid pursuant to such Permitted
Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights
hereunder shall expire.
Section 14.
Fractional Rights and Fractional Shares. (a) The
Corporation shall not be required to issue
fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid
to the registered holders of the Right Certificates
with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a
whole Right. For the purposes of this
Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on
which such fractional Rights would have been
otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the
average of the closing bid and asked prices,
regular way, in either case as reported in the
principal consolidated transaction reporting system
with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the
principal consolidated transaction reporting system
with respect to securities listed on the principal
national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any
national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are
not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a
professional market maker making a market in the
Rights selected by the Board of Directors of the
Corporation. 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
Corporation shall be used.
(b) The Corporation shall not be
required to issue fractions of Common Shares upon
exercise of the Rights or to distribute
certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the
Corporation shall pay to the registered holders of
Right Certificates at the time such Rights are
exercised as herein provided an amount in cash
equal to the same fraction of the current market
value of one Common Share. For the purposes of
this Section 14(b), the current market value of a
Common Share shall be the closing price of a Common
Share (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the
acceptance of the Right expressly waives his right
to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided
above).
Section 15. Rights of Action. All rights
of action in respect of this Agreement, excepting
the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the
respective registered holders of the Right
Certificates (and, prior to the Distribution Date,
the registered holders of the Common Shares); and
any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common
Shares), 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
Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain
any suit, action or proceeding against the
Corporation to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in
such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies
available to the holders of Rights, it is
specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled
to specific performance of the obligations under,
and injunctive relief against actual or threatened
violations of the obligations of any Person subject
to, this Agreement.
Section 16. Agreement of Right Holders.
Every holder of a Right, by accepting the same,
consents and agrees with the Corporation 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 Shares;
(b) after the Distribution Date, the
Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights
Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and
with the appropriate form fully executed;
(c) subject to Section 6 and
Section 7(f) hereof, the Corporation and the Rights
Agent may deem and treat the person in whose name
the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or
writing on the Right Certificate or the associated
Common Shares certificate made by anyone other than
the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation
nor the Rights Agent, subject to the last sentence
of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) Notwithstanding anything in this
Agreement to the contrary, neither the Corporation
nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a
Right or other Person as a result of its inability
to perform any of its obligations under this
Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise
restraining performance of such obligation;
provided, however, the Corporation must use its
best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as
possible.
Section 17.
Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed
for any purpose the holder of the Common Shares or
any other securities of the Corporation which may
at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be
construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a
stockholder of the Corporation or any right to vote
for the election of directors or upon any matter
submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate
action, or to receive notice of meetings or other
actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or
other distributions or to exercise any preemptive
or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in
the administration and execution of this Agreement
and the exercise and performance of its duties
hereunder. The Corporation also agrees to
indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in
connection with the acceptance and administration
of this Agreement, including the costs and expenses
of defending against any claim of liability in the
premises. The indemnity provided for herein shall
survive the expiration of the Rights and the
termination of this Agreement.
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 Common Shares or for other
securities of the Corporation, instrument of
assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or
Change of Name of Rights Agent. 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
all or substantially all of the corporate trust
business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or
filing of any paper or any further act on the part
of any of the parties hereto, provided that such
corporation would be eligible for appointment as a
successor Rights Agent under the provisions of
Section 21 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 a 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 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.
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 only those duties and
obligations imposed by this Agreement upon the
following terms and conditions, by all of which the
Corporation and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult
with legal counsel (who may be legal counsel for
the Corporation), 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 (including, without limitation, the
identity of an Acquiring Person and the
determination of the current market price of any
Security) be proved or established by the
Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved
and established by a certificate signed by any one
of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the
Treasurer or the Secretary of the Corporation and
delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be
liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature
on such Right Certificates) or be required to
verify the same, but all such statements and
recitals are and shall be deemed to have been made
by the Corporation only.
(e) The Rights Agent shall not be
under any responsibility in respect of the validity
of this Agreement or the execution and delivery
hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be
responsible for any breach by the Corporation of
any covenant or condition contained in this
Agreement or in any Rights Certificate; nor shall
it be responsible for any change in the
exercisability of the Rights (including the Rights
becoming void pursuant to Section 7(e) hereof) or
any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for
the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that
would require any such adjustment (except with
respect to the exercise of Rights evidenced by
Right Certificates after receipt of the certificate
described in Section 12 hereof); nor shall it by
any act hereunder be deemed to make any
representation or warranty as to the authorization
or reservation of any Common Shares to be issued
pursuant to this Agreement or any Right Certificate
or as to whether any Common Shares will, when
issued, be validly authorized and issued, fully
paid and non-assessable.
(f) The Corporation agrees that it
will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and
delivered all such further and other acts,
instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions
of this Agreement.
(g) The Rights Agent is hereby
authorized and directed to accept instructions with
respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for
advice or instructions in connection with its
duties, and shall not be liable for any action
taken or suffered by it in good faith or lack of
action in accordance with instructions of any such
officer or for any delay in acting while waiting
for those instructions. Any application by the
Rights Agent for written instructions from the
Corporation may, at the option of the Rights Agent,
set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this
Rights Agreement and the date on or after which
such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any
such application on or after the date specified in
such application (which date shall not be less than
five Business Days after the date any officer of
the Corporation actually receives such application,
unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case
of an omission), the Rights Agent shall have
received written instruction in response to such
application specifying the action to be taken or
omitted.
(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 Corporation or
become pecuniarily interested in any transaction in
which the Corporation may be interested, or
contract with or lend money to the Corporation 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 Corporation 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
Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement
shall require the Rights Agent to expend or risk
its own funds or otherwise incur any financial
liability in the performance of any of its duties
hereunder or in the exercise of its rights if there
shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification
against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights
Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to
the form of assignment or form of election to
purchase, as the case may be, has not been
completed, the Rights Agent shall not take any
further action with respect to such requested
exercise of transfer without first consulting with
the Corporation.
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 thirty (30) days' notice in writing
mailed to the Corporation and to the transfer agent
of the Common Shares by registered or certified
mail, and to the holders of the Right Certificates
by first-class mail. The Corporation may remove
the Rights Agent or any successor Rights Agent upon
sixty (60) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case
may be, and to the transfer agent of the Common
Shares by registered or certified mail, and to
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 Corporation shall appoint a successor
to the Rights Agent. If the Corporation shall fail
to make such appointment within a period of sixty
(60) 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
Corporation), 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 Corporation or by such a court,
shall be a corporation organized and doing business
under the laws of the United States or of the State
of New York (or of any other state of the United
States so long as such corporation is authorized to
do business as a banking institution in the State
of New York), in good standing, having an office in
the State of New York, 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
$100,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had
been originally named as Rights Agent without
further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it
hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of
any such appointment the Corporation shall file
notice thereof in writing with the predecessor
Rights Agent and the transfer agent of the Common
Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates.
Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall
not affect the legality or validity of the
resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the
case may be.
Section 22.
Issuance of New Right Certificates.
Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Right
Certificates evidencing Rights in such form as may
be approved by its Board of Directors of the
Corporation 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 Shares following the
Distribution Date and prior to the earliest of the
Redemption Date, the Final Expiration Date and the
consummation of a transaction contemplated by
Section 13(d) hereof, the Corporation (a) shall
with respect to Common Shares so issued or sold
pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities,
notes or debentures issued by the Corporation, and
(b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the
Corporation, issue Right Certificates representing
the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i)
the Corporation shall not be obligated to issue any
such Right Certificates if, and to the extent that,
the Corporation shall be advised by counsel that
such issuance would create a significant risk of
material adverse tax consequences to the
Corporation or the Person to whom such Right
Certificate would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a)(i) Subject to Section 23(a)(iii), the Board of
Directors of the Corporation may, at its option,
redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01
per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date
hereof (such redemption price being hereinafter
referred to as the "Redemption Price"), at any time
prior to the earlier of (x) the time that any
Person becomes an Acquiring Person, or (y) the
Final Expiration Date. The Corporation may, at its
option, pay the Redemption Price either in Common
Shares (based on the "current per share market
price," as defined in Section 11(d) hereof, of the
Common Shares at the time of redemption) or cash;
provided that if the Corporation elects to pay the
Redemption Price in Common Shares, the Corporation
shall not be required to issue any fractional
Common Shares and the number of Common Shares
issuable to each holder of Rights shall be rounded
down to the next whole share.
(ii) In addition, subject to
Section 23(a)(iii), the Board of Directors of the
Corporation may, at its option, at any time
following a Shares Acquisition Date but prior to
any Section 13 Event redeem all but not less than
all of the then outstanding Rights at the
Redemption Price in connection with any Section 13
Event in which all holders of Common Shares are
treated alike and not involving (other than as a
holder of Common Shares being treated like all
other such holders) an Interested Stockholder.
(iii) The Board of Directors of
the Corporation may only redeem Rights pursuant to
Section 23(a)(i) or 23(a)(ii) hereof if (A) a
majority of the Disinterested Directors, and (B) a
majority of all of the directors of the Corporation
authorize such redemption. Notwithstanding
anything in this Agreement to the contrary, the
Rights may not be redeemed pursuant to this Section
23 unless there is at least one member of the Board
of Directors of the Corporation that is a
Disinterested Director at the time of such
redemption.
(b) In the case of a redemption
permitted under Section 23(a)(i), immediately upon
the date for redemption set forth (or determined in
the manner specified in) in a resolution of the
Board of Directors of the Corporation ordering the
redemption of the Rights, evidence of which shall
have been filed with the Rights Agent, 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 for each
Right so held. In the case of a redemption
permitted only under Section 23(a)(ii), evidence of
which shall have been filed with the Rights Agent,
the right to exercise the Rights will terminate and
represent only the right to receive the Redemption
Price upon the later of ten Business Days following
the giving of such notice or the expiration of any
period during which the rights under Section
11(a)(ii) may be exercised. The Corporation shall
promptly give 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 ten (10) days
after such date for redemption set forth in a
resolution of the Board of Directors of the
Corporation ordering the redemption of the Rights,
the Corporation shall mail a notice of redemption
to all the holders of the then 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 Shares. Any notice
which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will
state the method by which the payment of the
Redemption Price will be made. Neither the
Corporation nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any
Rights at any time in any manner other than that
specifically set forth in this Section 23 and other
than in connection with the purchase of Common
Shares prior to the Distribution Date.
(c) The Corporation may, at its
option, discharge all of its obligations with
respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the
Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the
registered holders of the Rights at their last
addresses as they appear on the registry books of
the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent
of the Common Shares, and upon such action, all
outstanding Rights and Right Certificates shall be
null and void without any further action by the
Corporation.
Section 24. Exchange. (a) Subject to
Section 24(d), the Board of Directors of the
Corporation may, at its option, at any time after
the time that any Person becomes an Acquiring
Person, exchange after all or part of the then
outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to
the provisions of Section 7(e) and Section
11(a)(ii) hereof) for Common Shares of the
Corporation at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar
transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors of the Corporation shall not
be empowered to effect such exchange at any time
after any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit
plan of the Corporation or any such Subsidiary, any
entity holding Common Shares for or pursuant to the
terms of any such plan or any trustee,
administrator or fiduciary of such a plan),
together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more
of the Common Shares then outstanding.
(b) Immediately upon the action of
the Board of Directors of the Corporation ordering
the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further
action and without any notice, the right to
exercise such rights shall terminate and the only
right thereafter of a holder of such Rights shall
be to receive that number of Common Shares equal to
the number of such rights held by such holder
multiplied by the Exchange Ratio. The Corporation
shall promptly give public notice of any such
exchange; provided, however, that the failure to
give, or any defect in, such notice shall not
affect the validity of such exchange. The
Corporation promptly shall mail a notice of any
such exchange to all of the holders of such Rights
at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice
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
Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of
Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the
number of Rights (other than Rights which have
become void pursuant to the provisions of Section
7(e) and Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In the event that there shall
not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in
accordance with this Section 24, the Corporation
shall take all such action as may be necessary to
authorize additional Common Shares for issuance
upon exchange of the Rights.
(d) The Board of Directors may only
exchange Rights pursuant to Section 24(a) hereof if
(i) a majority of the Disinterested Directors, and
(ii) a majority of all of the directors of the
Corporation authorize such exchange.
Notwithstanding anything in this Agreement to the
contrary, the Rights may not be exchanged pursuant
to this Section 24 unless there is at least one
member of the Board of Directors of the Corporation
that is a Disinterested Director at the time of
such exchange.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to
pay any dividend payable in stock of any class to
the holders of its Common Shares or to make any
other distribution to the holders of its Common
Shares (other than a regularly quarterly cash
dividend), (ii) to offer to the holders of its
Common Shares rights or warrants to subscribe for
or to purchase any additional Common Shares or
shares of stock of any class or any
other securities, rights or options, (iii) to
effect any reclassification of its Common Shares
(other than a reclassification involving only the
subdivision of outstanding Common Shares), (iv) to
effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the
Corporation in a transaction which does not violate
Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer)
in one or more transactions, of 50% or more of the
assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Corporation and/or any
of its Subsidiaries in one or more transactions
each of which does not violate Section 11(o)
hereof), or (v) to effect the liquidation,
dissolution or winding up of the Corporation, then,
in each such case, the Corporation shall give to
each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of such proposed
action to the extent feasible and file a
certificate with the Rights Agent to that effect,
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
reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up
is to take place and the date of participation
therein by the holders of the Common Shares, if any
such date is to be fixed, and such notice shall be
so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of
the Common Shares for purposes of such action, and
in the case of any such other action, at least
twenty (20) days prior to the date of the taking of
such proposed action or the date of participation
therein by the holders of the Common Shares,
whichever shall be the earlier.
(b) In case of a Section 11(a)(ii)
Event, then (i) the Corporation shall as soon as
practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event,
which notice shall describe such event and the
consequences of such event to holders of Rights
under Section 11(a)(ii) hereof and (ii) all
references in the preceding paragraph (a) to Common
Shares shall be deemed thereafter to refer also, if
appropriate, to capital stock equivalents, as
provided for in Section 11(a)(iii).
Section 26. Notices. Notices or demands
authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right
Certificate to or on the Corporation 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:
Loctite Corporation
10 Columbus Boulevard
Hartford, CT 06106
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be
given or made by the Corporation or by the holder
of any Right Certificate to or on
the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until
another address is filed in writing with the
Corporation) as follows:
The First National Bank of Boston
Mail Stop 45-02-16
P.O. Box 1865
Boston, MA 02105-1865
Attention: Shareholder Services Division
(Loctite Corporation 1994 Rights
Agreement)
Notices or demands authorized by this Agreement to
be given or made by the Corporation or the Rights
Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of
certificates representing Common Shares 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 Corporation.
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, subject to
Section 27(b) hereof, the Corporation and the
Rights Agent shall, if the Corporation so directs,
supplement or amend any provision of this Agreement
without the approval of any holders of certificates
representing Common Shares. From and after the
Distribution Date, subject to Section 27(b) hereof,
the Corporation and the Rights Agent shall, if the
Corporation so directs, supplement or amend this
Agreement without the approval of any holders of
Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective
or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period
hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the
Corporation may deem necessary or desirable and
which shall not adversely affect the interests of
the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this
Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose
of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights.
Upon the delivery of a certificate from an
appropriate officer of the Corporation which states
that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or
amendment, provided that such supplement or
amendment does not adversely affect the rights or
obligations of the Rights Agent under Section 18 or
Section 20 of this Agreement. Prior to the
Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the
interests of the holders of Common Shares.
(b) The Corporation shall not
supplement or amend any provision of this Agreement
unless (i) a majority of the Disinterested
Directors and (ii) a majority of all of the
directors of the Corporation authorizes such
supplement or amendment. Notwithstanding anything
in this Agreement to the contrary, this Agreement
may not be supplemented or amended pursuant to this
Section 27 unless there is at least one member of
the Board of Directors of the Corporation that is a
Disinterested Director at the time of such
supplement or amendment.
Section 28. Determination and Actions by
the Board of Directors of the Corporation, etc.
Subject to Sections 1(c), 1(r), 23(a)(iii), 24(d)
and 27(b) hereof, the Board of Directors of the
Corporation shall have the exclusive power and
authority to administer this Agreement and to
exercise all rights and powers specifically granted
to the Board, or the Corporation, 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 the Agreement and
whether any proposed amendment adversely affects
the interests of the holders of Right
Certificates). For all purposes of this Agreement,
any calculation of the number of Common Shares or
other securities outstanding at any particular
time, including for purposes of determining the
particular percentage of such outstanding Common
Shares or any other securities 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 Exchange Act as in effect on the date of
this Agreement. All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final,
conclusive and binding on the Corporation, the
Rights Agent, the holders of the Right Certificates
and all other parties, and (y) not subject the
Board to any liability to the holders of the Right
Certificates.
Section 29. Successors. All the
covenants and provisions of this Agreement by or
for the benefit of the Corporation 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 or corporation other than the
Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Corporation, the
Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution
Date, the Common Shares).
Section 31. 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 32. Governing Law. This
Agreement, each Right 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 33. Counterparts. This Agreement
may be executed in any number of counterparts and
each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts
shall together constitute but one and the same
instrument.
Section 34. 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 and
attested, all as of the date and year first above
written.
LOCTITE CORPORATION
By:
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By:
Name:
Title:
<PAGE>
LOCTITE CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON, as
Rights Agent
Rights Agreement
Dated as of April 14, 1994
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 9
Section 3. Issue of Right Certificates 9
Section 4. Form of Right Certificate 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split-Up, Combination and 12
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificate
Section 7. Exercise of Rights; Purchase Price; 13
Expiration Date of Rights
Section 8. Cancellation and Destruction of 16
Right Certificates
Section 9. Reservation and Availability of 16
Common Shares
Section 10. Common Shares Record Date 17
Section 11. Adjustment of Purchase Price, Number 18
and Kind of Shares or Number of
Rights
Section 12. Certificate of Adjusted Purchase Price 27
or Number of Shares
Section 13. Consolidation, Merger or Sale or Transfer 27
of Assets or Earning Power
Section 14. Fractional Rights and Fractional Shares 30
Section 15. Rights of Action 31
Section 16. Agreement of Right Holders 32
Section 17. Right Certificate Holder Not Deemed a 32
Stockholder
Section 18. Concerning the Rights Agent 33
Section 19. Merger or Consolidation or Change of 33
Name of Rights Agent
Section 20. Duties of Rights Agent 34
Section 21. Change of Rights Agent 37
Section 22. Issuance of New Right Certificates 38
Section 23. Redemption and Termination 38
Section 24. Exchange 40
Section 25. Notice of Certain Events 41
Section 26. Notices 42
Section 27. Supplements and Amendments 43
Section 28. Determination and Actions by the Board 44
of Directors of the Corporation, etc.
Section 29. Successors 44
Section 30. Benefits of this Agreement 44
Section 31. Severability 45
Section 32. Governing Law 45
Section 33. Counterparts 45
Section 34. Descriptive Headings 45
Signatures 46
Exhibit A-1 - Form of Transferee Agreement
Exhibit A-2 - Form of Transferee Executive Officer's Certificate
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Common Shares
Defined Term Cross Reference Sheet
Acquiring Person. . . . . . . . . . . . . . . Section 1(a)
Act . . . . . . . . . . . . . . . . . . . . . Section 1(b)
Adjustment Shares . . . . . . . . . . . . . . Section 11(a)(ii)
Adjusted Number of Shares . . . . . . . . . . Section 11(a)(iii)
Adjusted Purchase Price . . . . . . . . . . . Section 11(a)(iii)
Adverse Person. . . . . . . . . . . . . . . . Section 1(c)
Affiliate . . . . . . . . . . . . . . . . . . Section 1(d)
Agreement . . . . . . . . . . . . . . . . . . Preface
Associate . . . . . . . . . . . . . . . . . . Section 1(e)
Beneficial Owner. . . . . . . . . . . . . . . Section 1(f)
beneficially own. . . . . . . . . . . . . . . Section 1(f)
Business Day. . . . . . . . . . . . . . . . . Section 1(g)
capital stock equivalent. . . . . . . . . . . Section 11(a)(iii)
Close of business . . . . . . . . . . . . . . Section 1(h)
Common Shares . . . . . . . . . . . . . . . . Section 1(i)
Corporation . . . . . . . . . . . . . . . . . Preface
current per share market price. . . . . . . . Section 11(d)(i)
Disinterested Director. . . . . . . . . . . . Section 1(j)
Distribution Date . . . . . . . . . . . . . . Section 1(k)
Distribution Transaction. . . . . . . . . . . Section 1(l)
equivalent common shares. . . . . . . . . . . Section 11(b)
Exchange Act. . . . . . . . . . . . . . . . . Section 1(d)
Exchange Ratio. . . . . . . . . . . . . . . . Section 24(a)
Final Expiration Date . . . . . . . . . . . . Section 7(a)
Grandfathered Stockholder . . . . . . . . . . Section 1(n)
Henkel. . . . . . . . . . . . . . . . . . . . Section 1(o)
Henkel Percentage . . . . . . . . . . . . . . Section 1(p)
Interested Stockholder. . . . . . . . . . . . Section 1(q)
Krieble Family Group. . . . . . . . . . . . . Section 1(n)
Permitted Offer . . . . . . . . . . . . . . . Section 1(r)
Permitted Transfer. . . . . . . . . . . . . . Section 1(s)
Permitted Transferee. . . . . . . . . . . . . Section 1(t)
Person. . . . . . . . . . . . . . . . . . . . Section 1(u)
Principal Party . . . . . . . . . . . . . . . Section 13(b)
Proration Factor. . . . . . . . . . . . . . . Section 11(a)(iii)
Purchase Price. . . . . . . . . . . . . . . . Section 4(a)
Record Date . . . . . . . . . . . . . . . . . Preface
Redemption Date . . . . . . . . . . . . . . . Section 7(a)
Redemption Price. . . . . . . . . . . . . . . Section 23(a)(i)
Right . . . . . . . . . . . . . . . . . . . . Preface
Right Certificate . . . . . . . . . . . . . . Section 3(a)
Rights Agents . . . . . . . . . . . . . . . . Preface
Rights Agreement. . . . . . . . . . . . . . . Section 3(c)
Section 11(a)(ii) Event . . . . . . . . . . . Section 1(w)
Section 13 Event. . . . . . . . . . . . . . . Section 1(x)
Security. . . . . . . . . . . . . . . . . . . Section 11(d)
Shares Acquisition Date . . . . . . . . . . . Section 1(y)
Subsidiary. . . . . . . . . . . . . . . . . . Section 1(z)
Summary of Rights . . . . . . . . . . . . . . Section 3(b)
then outstanding. . . . . . . . . . . . . . . Section 1(f)(iii)
Trading Day . . . . . . . . . . . . . . . . . Section 11(d)(i)
Transfer. . . . . . . . . . . . . . . . . . . Section 1(aa)
Transferee Agreement. . . . . . . . . . . . . Section 1(c)
Transferee Certificate. . . . . . . . . . . . Section 1(c)
Transfer Percentage . . . . . . . . . . . . . Section 1(bb)
Triggering Event. . . . . . . . . . . . . . . Section 1(cc)
Unaffiliated Director . . . . . . . . . . . . Section 1(dd)
voting securities . . . . . . . . . . . . . . Section 13(a)
<PAGE>
Exhibit A-1
FORM OF TRANSFEREE AGREEMENT
- ----------------------------
THIS AGREEMENT (this "Agreement"), dated as of
[___________], between [Insert Name of Transferee]
(the "Transferee") and Loctite Corporation ("Loctite").
Capitalized terms used herein which are otherwise not
defined herein shall have the respective meanings
ascribed to them in the Rights Agreement, dated as of
April 14, 1994, between Loctite and The First National
Bank of Boston (the "Rights Agreement").
WITNESSETH:
WHEREAS, pursuant to the acquisition
agreement, dated as of [_________________] (the
"Acquisition Agreement"), between [Insert Name of
Transferor] (the "Transferor") and the Transferee, the
Transferor has agreed to sell on [_______________] (the
"Closing Date") to the Transferee [________________]
Common Shares pursuant to the terms and conditions
thereof (the "Proposed Sale Transaction");
WHEREAS, under the Rights Agreement, in order
for the Transferee to be deemed to be a Permitted
Transferee, (i) the Transferee may not have been
declared an Adverse Person, (ii) [in the case of a
Transfer from the Krieble Family Group or a Permitted
Transferee to the Transferee, the Transferee may not
beneficially own, after giving effect to the Proposed
Sale Transaction contemplated by the Acquisition
Agreement, any Common Shares other than the Common
Shares transferred by the Transferor to the Transferee
in the Proposed Sale Transaction] [in the case of a
Transfer from Henkel to the Transferee, the Transferee
may not beneficially own, after giving effect to the
Proposed Sale Transaction contemplated by the
Acquisition Agreement, a percentage of the then
outstanding Common Shares in excess of the lesser of
(1) the Henkel Percentage in effect immediately prior
to the Proposed Sale Transaction and (2) the sum of
0.3% of the then outstanding Common Shares and the
percentage of the then outstanding Common Shares to be
transferred by Henkel to the Transferee in the Proposed
Sale Transaction] (iii) at least 30 days prior to
consummation of the Proposed Sale Transaction, the
Transferee is required to execute and deliver to
Loctite this Agreement, which is substantially in the
form of Exhibit A-1 attached to the Rights Agreement,
and (iv) immediately prior to the consummation of the
Proposed Sale Transaction, the Transferee is required
to execute and deliver to Loctite an executive
officer's certificate substantially in the form of
Exhibit A-2 to the Rights Agreement; and
WHEREAS, the Transferee desires that, after
giving effect to the Proposed Sale Transaction
contemplated by the Acquisition Agreement, the
Transferee will be a Permitted Transferee under the
Rights Agreement and in consideration thereof has
entered into this Agreement.
NOW, THEREFORE, in consideration of the
promises herein contained and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be
legally bound hereby, each of the parties hereto agrees
as follows:
1. Prohibited Actions. (a) So long as this
Agreement is in effect, (i) Loctite shall not adopt any
shareholder rights plan or similar device that does not
contain substantially the same terms and conditions as
those set forth in the Rights Agreement (a
"Substantially Similar Rights Plan") and (ii) Loctite
shall not amend, modify, waive, terminate or invalidate
any provision of the Rights Agreement or any
Substantially Similar Rights Plan or adopt, amend,
modify, waive, terminate or invalidate any provision of
its certificate of incorporation or by-laws in any way
which would adversely affect the rights of the
Transferee under the Rights Agreement or any
Substantially Similar Rights Plan.
(b) So long as this Agreement is in
effect, the Transferee shall not, and shall cause each
of its Affiliates and Associates and any duly and
validly elected directors of Loctite (each a
"Director") designated by, or which is a representative
of, the Transferee or any of its Affiliates or
Associates not to, directly or indirectly, seek to (i)
amend, modify, waive, terminate or invalidate, or cause
the amendment, modification, waiver, termination or
invalidation of any provision of the Rights Agreement
or any Substantially Similar Rights Plan in any manner
(including, without limitation, by proxy contest,
shareholder consent, or otherwise) or (ii) redeem or
exchange the Rights or any rights issued under any
Substantially Similar Rights Plan, in either case,
unless a majority of the Directors who are neither
nominees or representatives of the Transferee or any
Affiliate or Associate of the Transferee nor officers
or employees of Loctite (each an "Outside Director")
consent to such action in writing or at a duly called
meeting of the Board of Directors of Loctite (the
"Board"); it being understood that the consent of the
Outside Directors may only be obtained if there is at
least one Director that is an Outside Director.
(c) Loctite acknowledges that nothing in
this Agreement shall be construed as prohibiting the
Transferee, or its Affiliates or Associates, from
making, or in any way participating in, any
"solicitation" of "proxies" (as such terms are defined
below), or becoming a "participant" in any "election
contest" (as such terms are defined below), in each
case, for the election or removal of any of the
Directors; provided, however, that any Director
designated by the Transferee, or any Affiliate
or Associate of the Transferee, shall be subject to the
restrictions contained in Section 1(b) hereof.
2. Permitted Transfers. (a) In connection
with any proposed Permitted Transfer by the Transferee,
the Transferee shall deliver to Loctite no later than
30 days prior to the Transfer Date (as defined below)
(i) written notice of such proposed Permitted Transfer
(the "Transfer Notice") for such proposed Permitted
Transfer setting forth (A) the number of Common Shares
proposed to be transferred, (B) the identity of the
proposed transferee (the "Proposed Transferee"),
including the Beneficial Owners thereof to the extent
known or reasonably determinable by the Transferee, and
(C) the date on which the proposed Permitted Transfer
is to be consummated (the "Transfer Date") and (ii) an
agreement substantially in the form of Exhibit A-1 to
the Rights Agreement, duly and validly executed on
behalf of the Proposed Transferee (the "Transferee
Agreement"). Upon receipt by Loctite of the Transferee
Agreement duly executed and delivered by the Proposed
Transferee, Loctite shall duly execute and deliver the
Transferee Agreement.
(b) As soon as practicable after receipt
of the Transfer Notice, the Directors who are neither
nominees or representatives of the Transferor or any
Affiliate or Associate of the Transferor nor officers
or employees of Loctite (each an "Unaffiliated
Director") shall evaluate whether the Proposed
Transferee is an Adverse Person. The Transferee shall
provide the Unaffiliated Directors with any information
within its control requested by them to facilitate
their evaluation, as soon as practicable after any
request for information is made.
(c) Subject to Section 2(d) hereof, a
proposed Permitted Transfer may be consummated on the
Transfer Date as set forth in the Transfer Notice and
the Transferee Agreement related to such proposed
Permitted Transfer unless the Unaffiliated Directors
shall have determined that the Proposed Transferee is
an Adverse Person no later than five days prior to the
Transfer Date for such proposed Permitted Transfer
provided that the Transferee complies with its
obligations in Sections 2(a) and (b) hereof.
(d) With respect to any proposed
Permitted Transfer, the Proposed Transferee shall be
deemed to be an Adverse Person for purposes of the
Rights Agreement, unless there is at least one Director
that is an Unaffiliated Director during the period from
and including the date Loctite receives a Transfer
Notice in respect of such proposed Permitted Transfer
to and including the Transfer Date for such proposed
Permitted Transfer. Except as required by applicable
law, Loctite covenants and agrees that it will not take
any action to cause there to be fewer than one
Unaffiliated Director on the Board at any time.
(e) Notwithstanding anything in this
Agreement to the contrary, no transferee of any Common
Shares from the Transferee shall have any rights under
this Agreement.
3. Representations and Warranties of
Transferee. The Transferee represents and warrants to
Loctite that:
(a) it has the requisite power and
authority (corporate or otherwise) to execute and
deliver this Agreement, to carry out its obligations
hereunder and to consummate each of the transactions
contemplated hereby;
(b) the execution, delivery and
performance of this Agreement and the consummation of
each of the transactions contemplated hereby have been
duly authorized by its Board of Directors (or other
relevant corporate body), and no other corporate
proceedings on its part are necessary to authorize this
Agreement or to consummate the transactions so
contemplated;
(c) this Agreement has been duly
executed and delivered by it and constitutes a valid
and binding obligation of it, enforceable against it in
accordance with its respective terms, except to the
extent such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to the enforcement of
creditors' rights generally and is subject to the
general principles of equity;
(d) neither the execution, delivery and
performance of this Agreement nor the consummation by
it of the transactions contemplated hereby nor
compliance by it with any of the provisions hereof will
(i) conflict with or result in any breach or violation
of any provisions of its governing organizational
documents, (ii) require on its part any filing with,
notification to, or permit, authorization, consent or
approval of, any governmental body or authority or any
other entity (other than filings by the Transferee with
the Securities and Exchange Commission under the
Exchange Act) or (iii) constitute (with or without
notice or lapse of time or both) a breach, violation or
default, create a lien or other encumbrance or give
rise to any right of renegotiation or termination,
amendment, cancellation, acceleration or prepayment
under (A) any material agreement or instrument to which
it is a party or by which any of its material
properties or assets may be bound or subject or (B) any
order, writ, injunction, decree, statute, rule or
regulation, governmental permit or license applicable
to it or any of its material properties or assets;
(e) A true, and complete copy of the
Acquisition Agreement, without amendment or
modification, is attached hereto as Exhibit A; and
(f) after giving effect to the Proposed
Sale Transaction pursuant to the Acquisition Agreement,
(i) the Transferee, together with all Affiliates and
Associates of the Transferee, will be the Beneficial
Owner of [insert number] Common Shares and (ii) [in the
case of a Transfer from the Krieble Family Group or a
Permitted Transferee to the Transferee, the Transferee,
together with its Affiliates or Associates, will not
beneficially own any Common Shares, other than the
Common Shares transferred by the Transferor to the
Transferee in the Proposed Sale Transaction] [in the
case of a Transfer from Henkel to the Transferee, the
Transferee, together with its Affiliates and
Associates, will not beneficially own a percentage of
the then outstanding Common Shares in excess of the
lesser of (A) the Henkel Percentage in effect
immediately prior to the Proposed Sale Transaction and
(B) the sum of 0.3% of the then outstanding Common
Shares and the percentage of the then outstanding
Common Shares to be transferred by Henkel to the
Transferee in the Proposed Sale Transaction].
4. Proposed Sale Transaction. The
Transferee shall provide the Unaffiliated Directors
with any information requested by them to facilitate
their evaluation of whether the Transferee is an
Adverse Person, as soon as practicable after any
request for information is made, and otherwise
cooperate with the Unaffiliated Directors in connection
with their evaluation of the Transferee.
5. Miscellaneous.
5.1. Entire Agreement. This Agreement
embodies the entire agreement and all understandings
between the parties hereto and supersedes all prior
agreements and understandings relating to the subject
matter hereof.
5.2.
Binding Effect; Benefits; Assignment;
Survival. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their
respective legal representatives, successors and
assigns. Neither this Agreement nor any of the rights
hereunder may be assigned by (i) Loctite, without the
prior written consent of the Transferee, or (ii) the
Transferee, unless there is at least one Unaffiliated
Director and a majority of the Unaffiliated Directors
consents to such assignment in writing or at a duly
called meeting of the Board. Any attempted or
purported assignment in violation of the previous
sentence shall be void and of no effect. The
representations and warranties set forth herein shall
survive without limitation as to time.
5.3. Amendments and Waivers. No
modification, amendment, termination or waiver of any
provision of this Agreement, and no consent to any
departure therefrom, shall in any event be effective
unless (i) there is at least one Unaffiliated Director
and (ii) the same shall be (a) in writing, (b) signed
by each of the parties hereto and (c) approved by a
majority of the Unaffiliated Directors, and then such
waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
5.4. Governing Law. This Agreement
shall be construed in accordance with and governed by
the laws of the State of Delaware applicable to
agreements made and to be performed wholly within such
jurisdiction, without giving effect to the choice of
law provisions thereof. Each of the parties hereto
hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of
the State of Delaware for any litigation arising out
of, or relating to, this Agreement and the transactions
contemplated hereby (and agrees not to commence any
litigation relating thereto except in such courts).
[The Transferee hereby irrevocably appoints CT
Corporation Systems (the "Process Agent"), with an
office on the date hereof at 1209 Orange Street,
Wilmington, Delaware 19801, United States, as its agent
to receive, on its behalf, service of any process,
summons, notice or other document -- applicable if the
Transferee is a foreign entity.] The Transferee agrees
that service of any process, summons, notice or
document by U.S. registered mail [to its respective
address set forth in Section 6.5 hereof] [to the
Process Agent] shall be effective service of process
for any litigation brought against it in any such
court. Each of the parties hereto hereby irrevocably
and unconditionally waives any objection to the laying
of venue of any litigation arising out of this
Agreement or the transactions contemplated hereby in
the courts of the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such
litigation brought in any such court has been brought
in an inconvenient forum.
5.5. Notices. All notices, requests,
demands, applications, services of process and other
communications which are required to be or may be given
under this Agreement shall be deemed to have been duly
given if sent by telex, telecopy or facsimile
transmission or delivered or mailed, certified first
class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
To Loctite:
Loctite Corporation
10 Columbus Boulevard
Hartford, Connecticut 06103
Attention: General Counsel
With copies to:
Fried, Frank, Harris, Shriver
& Jacobson
One New York Plaza
New York, New York 10004
Attention: Arthur Fleischer, Jr., P.C.
To Transferee:
[ ]
[ ]
[ ]
Attention: [ ]
With copies to:
[ ]
[ ]
[ ]
Attention: [ ];
or to such other address as any party shall furnish to
the other by notice given in accordance with this
Section 5.5. All such notices, requests, demands and
other communications shall be deemed to have been duly
given: at the time delivered by hand, if personally
delivered; three business days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business
day, if timely delivered (with charges prepaid) to a
recognized national air courier guaranteeing overnight
delivery.
5.6. Further Assurances. Each party
hereto shall do and perform or cause to be done and
performed all such further acts and things and shall
execute and deliver all such other agreements,
certificates, instruments and documents as any other
party may reasonably request in order to carry out the
intent and accomplish the purpose of this Agreement and
the consummation of the transactions contemplated
hereby.
5.7. Specific Performance. The parties
hereto hereby acknowledge that each party hereto would
suffer irreparable injury and would not have an
adequate remedy at law for money damages if the
provisions of this Agreement were not performed in
accordance with their terms. Each party hereto agrees
that the other parties hereto shall be entitled to
specific enforcement of the terms of this Agreement in
addition to any other remedy to which they are
entitled, at law or in equity. Furthermore, if any
action or proceeding shall be instituted to enforce the
provisions hereof, any party against whom such action
or proceeding is brought hereby waives the claim or
defense therein that there is an adequate remedy at
law, and agrees not to urge in any such action or
proceeding the claim or defense that such remedy at law
exists.
5.8. Termination. This Agreement shall
terminate and be of no further force and effect on
April 14, 2004, and upon the termination of this
Agreement there shall be no liability on the part of
any party to this Agreement with respect to any of the
provisions hereof, with the sole exception that nothing
contained in this Agreement shall in any way relieve
any party hereto from liability for any breach of the
provisions of this Agreement for the period prior to
its termination.
5.9. Rights of Action. (a) Except as
set forth in this Section 5.9, nothing in this
Agreement shall be construed to give any person or
corporation (other than Loctite and the Transferee) any
legal or equitable right, remedy or claim under this
Agreement. The parties agree that, at any time that
there are no Unaffiliated Directors, the rights of
action in respect of this Agreement shall be vested in
the respective holders of Common Shares; and any holder
of Common Shares, without the consent of any other
holder of Common Shares, may, on his own behalf and for
his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against any
party to this Agreement to enforce, any provision of
this Agreement. Without limiting the foregoing or any
remedies available to the holders of Common Shares, it
is specifically acknowledged that the holders of Common
Shares 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 party subject to,
this Agreement.
(b) The Transferee hereby agrees that
in connection with any action by Loctite to enforce any
provision of this Agreement against the Transferee, the
Transferee will not take any action that would directly
or indirectly prevent Loctite from making the necessary
funds and personnel available to pursue such action.
5.10. Counterparts. This Agreement may
be executed in one or more counterparts, each of which
for all purposes shall be deemed an original and all of
which shall constitute the same instrument.
IN WITNESS WHEREOF, each of the
Transferee and Loctite has caused this Agreement to be
duly executed on its behalf as of the date first above
written.
[NAME OF TRANSFEREE]
By:__________________________
Name:
Title:
LOCTITE CORPORATION
By:__________________________
Name:
Title:
<PAGE>
Exhibit A-2
FORM OF TRANSFEREE
EXECUTIVE OFFICER'S CERTIFICATE
[Name of Transferee]
[Address of Transferee]
Loctite Corporation
10 Columbus Boulevard
Hartford, Connecticut 06106
Reference is made to the Transferee Agreement,
dated as of [_________________], between [Insert Name of
Transferee] and Loctite Corporation (the "Transferee
Agreement"). The undersigned, [_________________], an
executive officer of the Transferee, does hereby
certify in my capacity as such executive officer that
all of the representations and warranties of the
Transferee set forth in Section 3 of the Transferee
Agreement are true and correct on and as of the date
hereof with the same effect as though made on and as of
the date hereof.
IN WITNESS WHEREOF, the undersigned has duly and
validly executed this Certificate this [insert date of
closing of transfer].
____________________________
Name:
Title:
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER APRIL 14, 2004, OR EARLIER
IF REDEEMED BY THE CORPORATION. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
SHALL BECOME NULL AND VOID.
Right Certificate
Loctite 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 April 14, 1994 (the "Rights Agreement"),
between Loctite Corporation, a Delaware corporation
(the "Corporation"), and The First National Bank of
Boston (the "Rights Agent"), to purchase from the
Corporation at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior
to 5:00 P.M., New York time, on April 14, 2004, unless
the Rights evidenced hereby shall have been previously
redeemed by the Corporation, at the principal office or
offices of the Rights Agent designated for such
purpose, or at the office of its successor as Rights
Agent, one fully paid non-assessable share of Common
Stock, with a par value of $.01 per share (the "Common
Shares"), of the Corporation, at a purchase price of
$175.00 per Common Share (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 Right
Certificate (and the number of Common Shares 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 April 14, 1994, based on the
Common Shares as constituted at such date.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such
Acquiring Person, Affiliate or Associate who becomes a
transferee after the Acquiring Person becomes such, or
(iii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring
Person, Affiliate or Associate who becomes a transferee
prior to or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void
and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the
Purchase Price and the number of Common Shares or other
securities which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the
happening of certain events, including Triggering
Events (as such term is defined in the Rights
Agreement).
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
Corporation and the holders of the Right Certificates,
which limitations of rights include the temporary
suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file
at the principal executive offices of the Corporation
and the principal office or offices of the Rights
Agent.
This Right Certificate, with or without other
Right Certificates, upon surrender at the principal
office of the Rights Agent, 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 Common Shares or
other securities 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 may
be redeemed by the Corporation at a redemption price of
$.01 per Right (subject to adjustment as provided in
the Rights Agreement) payable in Common Shares or cash.
No fractional Common Shares will be issued
upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such,
shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Common Shares
or of any other securities of the Corporation which may
at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder thereof,
as such, any of the rights of a stockholder of the
Corporation 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 other distributions or to exercise
any preemptive or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in
the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Corporation and its corporate seal.
Dated as of _________, ____.
ATTEST: LOCTITE CORPORATION
___________________________ By________________________
Name: Name:
Title: Title:
Countersigned:
THE FIRST NATIONAL
BANK OF BOSTON
By_________________________
Authorized Signatory
Name:
Title:
<PAGE>
Form of the Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED____________________________________
hereby sells, assigns and transfers unto______________
______________________________________________________
(Please print name and address of transferee)
______________________________________________________
this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of
the within-named Corporation, with full power of
substitution.
Dated: _________________, _____
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member
firm of a registered national securities exchange, a
member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
The undersigned hereby certifies that (1) the
Rights evidenced by this Right Certificate are not
being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) and (2) after due
inquiry and to the best knowledge of the undersigned,
the undersigned did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement).
_______________________
Signature
<PAGE>
Form of the Reverse Side of Right Certificate --
continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise Rights represented by the Right
Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to
exercise ______________ Rights represented by this
Right Certificate to purchase the Common Shares or
other securities issuable upon the exercise of such
Rights and requests that certificates for such Common
Shares or other securities be issued in the name of:
Please insert social security
or other identifying number _________________________
______________________________________
(Please print name and address)
_____________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right
Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _________________________
_____________________________________________________
(Please print name and address)
_____________________________________________________
Dated: _________________, _____
_________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member
firm of a registered national securities exchange, a
member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
<PAGE>
Form of the Reverse Side of Right Certificate --
continued
The undersigned hereby certifies that (1) the
Rights evidenced by this Right Certificate are not
being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights
Agreement) and (2) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an
Affiliate [or Associate] thereof (as such terms are
defined in the Rights Agreement).
___________________________
Signature
NOTICE
The signature on the foregoing Forms of
Assignment and Election and certificates 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, the
Corporation and the Rights Agent will deem the
Beneficial Owner (as such term is defined in the Rights
Agreement) of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the
Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
On April 14, 1994, the Board of Directors of
Loctite Corporation (the "Corporation") declared a
dividend distribution of one right (a "Right") for each
outstanding share of Common Stock, $.01 par value per
share (the "Common Shares"), of the Corporation. The
dividend is payable to the stockholders of record on
April 25, 1994 (the "Record Date") and with respect to
Common Shares issued thereafter until the Distribution
Date (as defined below), and, in certain circumstances,
with respect to Common Shares issued after the
Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the
registered holder to purchase from the Corporation one
Common Share at a price of $175.00 per Common Share
(the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Corporation and The First National Bank of Boston, as
Rights Agent (the "Rights Agent"), dated as of
April 14, 1994.
Initially, the Rights will be attached to all
certificates representing Common Shares then
outstanding, and no separate Right Certificates (as
hereinafter defined) will be distributed. The Rights
will separate from the Common Shares upon the earlier
to occur of (i) the date of a public announcement that
a person or "group" (other than a Grandfathered
Stockholder (as hereinafter defined) has acquired
beneficial ownership of 10% or more of the outstanding
Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later
date as the Board may determine) following the
commencement of a tender offer or exchange offer the
consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined)
(the earlier of such dates being called the
"Distribution Date"). A person or group whose
acquisition of Common Shares causes a Distribution Date
pursuant to clause (i) above is an "Acquiring Person."
The date that a person or group becomes an Acquiring
Person is the "Shares Acquisition Date."
Notwithstanding the foregoing, an Acquiring
Person does not include the following persons
("Grandfathered Stockholders"): (i) Henkel
Corporation, a Delaware corporation
("Henkel"), (ii)
Mr. Robert H. Krieble, Ms. Nancy B. Krieble, Mr.
Frederick B. Krieble, Ms. Collette C. Krieble, Mr.
James P. Fusscas, Ms. Helen K. Fusscas, Mr. Martin
Wolman, Management I, Limited and Management II,
Limited as a "group" (as such term is defined or used
under Rule 13d-5(b) promulgated pursuant to
Section 13(d) of the Securities Exchange Act of 1934,
as amended) (collectively as such group, the "Krieble
Family Group") and (iii) any Permitted Transferee (as
hereinafter defined); provided, however, that, except
under limited circumstances, (a) Henkel will cease to
be a Grandfathered Stockholder at any time after the
date of the Rights Agreement that Henkel beneficially
owns a percentage of outstanding Common Shares in
excess of the Henkel Percentage (as hereinafter
defined) then in effect (other than as a result of a
Permitted Offer), (b) the Krieble Family Group will
cease to be a Grandfathered Stockholder at the time
after the date of the Rights Agreement any member of
the Krieble Family Group beneficially owns any
additional Common Shares (other than as a result of a
stock dividend, a stock split, a grant by the
Corporation pursuant to a directors benefit plan
established by the Corporation of Common Shares or
options to purchase Common Shares (and the exercise
thereof) or a Permitted Offer) and (c) any Permitted
Transferee will cease to be a Grandfathered Stockholder
at the time such Permitted Transferee beneficially owns
any additional Common Shares (other than as a result of
a stock dividend, a stock split or a Permitted Offer).
Initially, the "Henkel Percentage" is 35% of the
outstanding Common Shares and thereafter is subject to
adjustment as follows: (1) in the event of any
transfer of Common Shares by Henkel to any person
(other than by means of a transfer of Common Shares
pursuant to a registered public offering or a broker's
transaction under Rule 144 under the Securities Act of
1933, as amended, and that satisfies certain other
conditions to ensure a wide distribution of those
Common Shares (each such transfer, a "Distribution
Transaction")), the Henkel Percentage will be reduced
by the percentage of outstanding Common Shares so
transferred; (2) in the event of transfers aggregating
more than 10% of the outstanding Common Shares by
Henkel by means of Distribution Transactions, the
Henkel Percentage will be reduced by the aggregate
percentage of outstanding Common Shares so transferred
in excess of 10% of the outstanding Common Shares; and
(3) in the event that the Corporation acquires any
Common Shares, the Henkel Percentage immediately
following such acquisition will equal the greater of
the Henkel Percentage immediately prior to such
acquisition and the percentage of the outstanding
Common Shares beneficially owned by Henkel immediately
following such acquisition.
A "Permitted Transfer" is any transfer of
Common Shares from Henkel, the Krieble Family Group as
a whole, or any Permitted Transferee to any person that
(i) has not been declared an Adverse Person (as
hereinafter defined) by a majority of those directors
of the Corporation who are neither
officers or employees of the Corporation nor a designee or
representative of the proposed transferor (the
"Unaffiliated Directors"), (ii) does not beneficially
own, after giving effect to the transfer, in the case
of a transfer from the Krieble Family Group or any
Permitted Transferee, any Common Shares other than the
Common Shares so transferred to such transferee or in
the case of a transfer from Henkel, a percentage of the
then outstanding Common Shares in excess of the lesser
of (a) the Henkel Percentage in effect immediately
prior to such proposed transfer and (b) the sum of 0.3%
of the then outstanding Common Shares and the
percentage of the then outstanding Common Shares so
transferred to such transferee, (iii) at least 30 days
prior to the consummation of such proposed transfer,
executes and delivers to the Corporation an agreement
substantially in the form of Exhibit A-1 attached to
the Rights Agreement and (iv) immediately prior to the
consummation of such transfer, executes and delivers to
the Corporation an executive officer's certificate
substantially in the form of Exhibit A-2 attached to
the Rights Agreement. The Rights Agreement provides
that any proposed Permitted Transferee will be deemed
to be an "Adverse Person" if it is declared to be an
Adverse Person by a majority of the Unaffiliated
Directors after having determined in its business
judgment that beneficial ownership by such proposed
Permitted Transferee of 10% or more of the outstanding
Common Shares would be reasonably likely to materially
adversely affect the Corporation or its stockholders.
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with
and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date
will also constitute the transfer of the Rights
associated with the Common Shares represented by such
certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close
of business on the Distribution Date (and to each
initial record holder of certain Common Shares issued
after the Distribution Date), and these separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date and will expire at the close of
business on April 14, 2004, unless earlier redeemed by
the Corporation as described below.
In the event that any person becomes an
Acquiring Person (except pursuant to a tender or
exchange offer which is for all outstanding Common
Shares and (i) which is at a price and
on terms which a majority of the Disinterested Directors (as hereinafter
defined) and a majority of the entire Board determines
to be adequate and in the best interests of the
Corporation, its stockholders and its other relevant
constituencies, other than such person making such
offer, or (ii) which remains open for a period of at
least 60 days after the tender or exchange offer has
commenced and the consummation of which results in the
person on whose basis the tender or exchange offer is
made becoming the beneficial owner of more than 50% of
the outstanding Common Shares (a "Permitted Offer")),
each holder of a Right will thereafter have the right
(the "Flip-In Right") to receive upon exercise the
number of Common Shares (or, in certain circumstances,
other securities of the Corporation) having a value
(immediately prior to this triggering event) equal to
two times the Purchase Price of the Right. In lieu of
the Flip-In Right described above, the Board, at its
option, may exchange each Right for one Common Share,
provided that at no time has any person been the
beneficial owner of 50% or more of the outstanding
Common Shares. Such an exchange must be authorized by
(a) a majority of the Disinterested Directors and (b) a
majority of all of the directors of the Board. A
"Disinterested Director" means any director of the
Corporation who is neither an officer or employee of
the Corporation nor any designee or representative of
any person attempting to effect a business combination
or similar transaction with the Corporation.
Notwithstanding the foregoing, following the occurrence
of a person becoming an Acquiring Person, all Rights
that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
In the event that at any time following the
Shares Acquisition Date, (i) the Corporation is
acquired in a merger or other business combination
transaction in which the holders of all of the
outstanding Common Shares immediately prior to the
consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or
(ii) more than 50% of the Corporation's assets or
earning power is sold or transferred, in either case
with or to (a) an Acquiring Person or any affiliate or
associate or any other person in which such Acquiring
Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such
Acquiring Person, affiliate or associate, or, (b) any
other person (but only if in any such transaction
referred to in clause (i) or (ii) above, all holders of
Common Shares are not treated alike), then each holder
of a Right (except Rights which previously have been
voided as set forth above) will have the right (the
"Flip-Over Right") to receive, upon exercise, common
shares of the acquiring Corporation having a value
equal to two times the Purchase Price of the Right.
The holder of a Right will continue to have the Flip-
Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of
Common Shares or other securities issuable, upon
exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the
grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares
at a price, or securities convertible into Common
Shares with a conversion price, less than the then
current market price of the Common Shares or (iii) upon
the distribution to holders of the Common Shares of
evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the
number of Common Shares issuable upon exercise of each
Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on
the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the
Distribution Date.
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. Fractional Common Shares will not
be required to be issued by the Corporation, and in
lieu thereof, an adjustment in cash will be made based
on the market price of the Common Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of
(i) a person becoming an Acquiring Person or (ii) the
expiration of the Rights, the Corporation may redeem
the Rights at a price of $.01 per Right (the
"Redemption Price"), which redemption will be effective
upon approval of (a) a majority of the Disinterested
Directors and (b) a majority of all of the directors of
the Corporation. Additionally, following the Shares
Acquisition Date, the then outstanding Rights may be
redeemed at the Redemption Price (if approved by (1) a
majority of the Disinterested Directors and (2) a
majority of all of the directors of the Corporation),
if this redemption is in connection with a merger or
other business combination transaction or series of
transactions involving the Corporation in which all
holders of Common Shares are treated alike but not
involving an Acquiring Person or its affiliates or
associates.
Prior to the Distribution Date, all of the
provisions of the Rights Agreement may be amended by
approval of (i) a majority of the Disinterested
Directors and (ii) a majority of all of the directors
of the Corporation. After the Distribution Date, the
provisions of the Rights Agreement may be amended upon
approval of (a) a majority of the Disinterested
Directors and (b) a majority of all of the directors of
the Corporation in order to cure any ambiguity, defect
or inconsistency, or to make changes which do not
adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
The Rights may not be redeemed, exchanged or
amended unless there is at least one Disinterested
Director at the time of such redemption, exchange or
amendment.
Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder
of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to
stockholders of the Corporation, stockholders may,
depending upon the circumstances, recognize taxable
income should the Rights become exercisable or upon the
occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed
with the Securities and Exchange Commission as an
Exhibit to a Registration Statement on Form 8-A dated
April 15, 1994. A copy of the Rights Agreement is
available free of charge from the Corporation. This
summary description of the Rights does not purport to
be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby
incorporated herein by reference.
Exhibit 10
PRESS RELEASE
HENKEL KGaA STRENGTHENS LONG-TERM RELATIONSHIP WITH LOCTITE
For Immediate Release. April 14, 1994. Henkel KGaA, Duesseldorf, Germany,
- ---------------------
announced today that it has signed an agreement with Loctite Corporation that
is intended to strengthen its long-term relationship with that company. The
agreement, which will remain in place for 10 years, replaces the existing
standstill agreement between Henkel and Loctite, which was scheduled to end on
May 23, 1995. Under the new agreement, Henkel will be entitled to increased
representation on the Board of Directors of Loctite and will be entitled to
exercise its full voting rights with respect to its share ownership.
Henkel, through a wholly-owned subsidiary, is the largest stockholder of
Loctite, and currently owns approximately 30% of Loctite's outstanding shares.
Under the agreement entered today and a related shareholder rights plan being
adopted by Loctite, Henkel would be permitted to increase its ownership to
35%.
Dr. Hans-Dietrich Winkhaus, the Chairman of the Board of Management of Henkel,
said "We are pleased with this development in our relationship with Loctite.
Henkel continues to consider its investment in Loctite as a core holding and
this agreement should foster strong relations between the companies for years
to come. We look forward to continuing our work together with our friends at
Loctite."
CONTACT: Werner Baier, Henkel KGaA, Duesseldorf, Germany.
Exhibit 11
Purchases of Shares of Common Stock from
March 6, 1992 through April 14, 1994
----------------------------------------
Set forth below are the purchases of shares of Common Stock from
March 6, 1992 through April 14, 1994. All purchases were made in private
transactions pursuant to the right of first refusal from Sellers.
Date Number of Shares Price per Share
---- ---------------- ---------------
7/8/93 2,817 $40.50
7/15/93 5,635 $36.375
7/22/93 5,635 $36.375
8/11/93 5,635 $36.25
8/11/93 2,817 $36.125
9/21/93 2,817 $41.00
12/16/93 5,635 $37.625
1/25/94 2,817 $38.125
