November 17, 1994
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
RE: Form 8-A
Dear Commissioners:
We are filing herewith via EDGAR direct transmission a Form 8-A for
registration of Common Stock Purchase Rights of Lone Star Industries, Inc.
under Section 12(b) of the Securities Exchange Act of 1934. These Rights
are to be registered on the New York Stock Exchange.
Sincerely yours,
John S. Johnson
John S. Johnson
Vice President
General Counsel and Secretary
JSJ/gm
Enclosure
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
LONE STAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-0982660
(State of incorporation or organization) (IRS Employer Identification No.)
300 First Stamford Place, Stamford, Connecticut 06912-0014
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be Name of each exchange on
so registered which each class is to be
registered
Common Stock
Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Item 1. Description of Registrant's Securities to be Registered.
On November 10, 1994, the Board of Directors of Lone Star Industries,
Inc.(the "Corporation") declared a dividend distribution of one right (a
"Right") to purchase one one-tenth of a share of the Common Stock, $1.00 par
value, of the Corporation (the "Common Shares") for each outstanding share of
Common Stock, payable to the stockholders of record on December 19, 1994
(the "Record Date"). The Board of Directors also authorized and directed the
issuance of one Right with respect to each Common Share 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 one-tenth of a Common
Share at a price of $70.00 per whole 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 Chemical Bank, as Rights Agent (the "Rights Agent"), dated as of
November 10, 1994.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) a person or group of affiliated or associated persons having
acquired beneficial ownership of 15% 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 of Directors may determine) following the
commencement of, or announcement of an intention to make, 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 earliest 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, certain stockholders who currently own in excess of 15% of the
outstanding Common Shares and their affiliates and permitted transferees
will not be deemed to be Acquiring Persons and their ownership will not
cause a Distribution Date unless they acquire an additional one percent or
more of the outstanding Common Shares. Furthermore, a person who acquires
Common Shares pursuant to a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms which a majority of the
Board of Directors determines (prior to acquisition) to be adequate and in
the best interests of the Corporation and its stockholders (other
than such person, its affiliates and associates) (a "Permitted Offer") will
not be deemed to be an Acquiring Person and such person's ownership will not
constitute a Distribution Date.
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 the 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, even without such notation or a copy of this
Summary of Rights being attached thereto, 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 ("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 such 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 November 10, 2004, unless earlier redeemed by
the Corporation as described below.
In the event that any person becomes an Acquiring Person, each holder of
Rights (other than Rights that have become void as described below) will
thereafter have the right (the "Flip-In Right") to receive, upon exercise of
such Rights, the number of Common Shares (or, in certain circumstances, other
securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the aggregate exercise price of such
Rights. The Board, at its option, may exchange each Right (other than those
that have become void as described below) for one Common Share in lieu of the
Flip-In Right, provided no person is the beneficial owner of 50% or more of
the Common Shares at the time of such exchange. Notwithstanding the
foregoing, following the occurrence of the event described above, all Rights
that are or (under certain circumstances specified in the Rights Agreement)
were beneficially owned by any Acquiring Person or any affiliate or
associate thereof 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, then each holder of Rights
(except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise of
such Rights, common shares of the acquiring company having a value equal to two
times the aggregate exercise price of the Rights; provided, however, that the
Flip Over Right shall not apply to any transaction described in clause (i) if
(x) such transaction is with a person or persons (or a wholly owned subsidiary
of any such person or persons) that acquired Common Shares pursuant to a
Permitted Offer and (y) the price and form of consideration offered in such
transaction is the same as that paid to all holders of Common Shares whose
shares were purchased to the Permitted Offer. 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).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued 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 in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective at such time, on such
basis and with such conditions as the Board of Directors may establish in its
sole discretion. The Corporation may, at its option, pay the Redemption Price
in Common Shares.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, defect or inconsistency, to make changes which
do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
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.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors, as the Rights may be redeemed by the Corporation at $.01
per Right prior to the time that a person or group has acquired beneficial
ownership of 15% or more of the Common Shares.
The Rights Agreement, dated as of November 10, 1994, between the
Corporation and Chemical Bank, as Rights Agent, specifying the terms of the
Rights is attached hereto as an exhibit and is incorporated herein by reference.
The foregoing description of the Rights is qualified in its entirety by
reference to such exhibit.
Item 2. Exhibits.
1. Rights Agreement dated as of November 10, 1994 between Lone Star
Industries, Inc. and Chemical Bank with the form of Right
Certificate attached as Exhibit B thereto and the Summary of Rights
to Purchase Shares attached as Exhibit C thereto. Pursuant to the
Rights Agreement, printed Right Certificates will not be mailed
until as soon as practicable after the earlier of the date of public
announcement that a person or group has acquired beneficial
ownership of 15% or more of the Common Shares or the tenth day (or
such later date as may be determined by action of the Corporation's
Board of Directors) after a person commences or announces its
intention to commence a tender or exchange offer the consummation of
which would result in the beneficial ownership by a person or group
of 15% or more of the Common Shares.
SIGNATURE
Pursuant to the requirement of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: November 17, 1994
LONE STAR INDUSTRIES, INC.
By: John S. Johnson
Name: John S. Johnson
Title: Vice President
General Counsel and Secretary
EXHIBIT LIST
Rights Agreement dated as of November 10, 1994 between Lone Star
Industries, Inc. and Chemical Bank the form of Right Certificate as Exhibit
B and the Summary of Rights to Purchase Shares as Exhibit C. Pursuant to the
Rights Agreement, printed Right Certificates will not be mailed until as soon as
practicable after the earlier of the date of public announcement that a person
or group has acquired beneficial ownership of 15% or more of the Common shares
or the tenth day (or such later date as may be determined by action of the
Corporation's Board of Directors) after a person commences or announces its
intention to commence a tender or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of 15% or more of the
Common Shares.
EXHIBIT
TO
FORM 8-A
LONE STAR INDUSTRIES, INC.
RIGHTS AGREEMENT
dated as of
November 10, 1994
between
LONE STAR INDUSTRIES, INC.
and
Chemical Bank
as Rights Agent
TABLE OF CONTENTS
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . 4
Section 4. Form of Right Certificate. . . . . . . . . . . . . . . . . . 5
Section 5. Countersignature and Registration. . . . . . . . . . . . . . 5
Section 6. Transfer, Split-up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Cancellation and Destruction of Right Certificates . . . . . 8
Section 9. Reservation and Availability of Common Shares. . . . . . . . 8
Section 10. Common Shares Record Date. . . . . . . . . . . . . . . . . . 9
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. . . . . . . . . . . . . . . . . . . . . . 9
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . 14
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . .. . . . . . . . . 14
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . 16
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 16
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . 17
Section 17. Right Certificate Holder Not Deemed a Stockholder. . . . . . 17
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . 17
Section 19. Merger or Consolidation or Change of Name of Rights Agent. . 18
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 18
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 20
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . 20
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . . 21
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . 22
Section 26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . 23
Section 28. Determination and Actions by the Board of Directors of the
Corporation, etc. . . . . . . . . . . . . . . .. . . . . . . 24
Section 29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . 24
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 32. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 24
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . 24
Defined Term Cross Reference Sheet
Acquiring Person . . . . . . . . . . . . . . . . . . . . . . .Section 1(a)
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(b)
Adjustment Shares. . . . . . . . . . . . . . . . . . . . . . .Section 11(a)(ii)
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(c)
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . .Preface
Associate. . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(c)
Beneficial Owner . . . . . . . . . . . . . . . . . . . . . . .Section 1(d)
beneficially own . . . . . . . . . . . . . . . . . . . . . . .Section 1(d)
Board of Directors . . . . . . . . . . . . . . . . . . . . . .Section 1(e)
Business Day . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(f)
common share equivalent. . . . . . . . . . . . . . . . . . . .Section 11(a)(iii)
Close of business. . . . . . . . . . . . . . . . . . . . . . .Section 1(g)
Common Shares. . . . . . . . . . . . . . . . . . . . . . . . .Section 1(h)
Corporation. . . . . . . . . . . . . . . . . . . . . . . . . .Preface
current per share market price . . . . . . . . . . . . . . . .Section 11(d)
Distribution Date. . . . . . . . . . . . . . . . . . . . . . .Section 1(i)
equivalent common shares . . . . . . . . . . . . . . . . . . .Section 11(b)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(j)
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . .Section 24(a)
Final Expiration Date. . . . . . . . . . . . . . . . . . . . .Section 7(a)
Grandfathered Stockholder. . . . . . . . . . . . . . . . . . .Section 1(l)
Permitted Offer. . . . . . . . . . . . . . . . . . . . . . . .Section 1(m)
Permitted Transfer . . . . . . . . . . . . . . . . . . . . . .Section 1(n)
Permitted Transferee . . . . . . . . . . . . . . . . . . . . .Section 1(o)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(p)
Principal Party. . . . . . . . . . . . . . . . . . . . . . . .Section 13(b)
Proposing Person . . . . . . . . . . . . . . . . . . . . . . .Section 1(q)
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . .Section 4(a)
Record Date. . . . . . . . . . . . . . . . . . . . . . . . . .Preface
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . .Section 7(a)
Redemption Price . . . . . . . . . . . . . . . . . . . . . . .Section 23(a)
Right. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preface
Right Certificate. . . . . . . . . . . . . . . . . . . . . . .Section 3(a)
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . .Preface
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . .Section 3(c)
Section 11(a)(ii) Event. . . . . . . . . . . . . . . . . . . .Section 1(s)
Section 13 Event . . . . . . . . . . . . . . . . . . . . . . .Section 1(t)
Security . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 11(d)
Shares Acquisition Date. . . . . . . . . . . . . . . . . . . .Section 1(u)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(v)
Substitution Period. . . . . . . . . . . . . . . . . . . . . .Section 11(a)(iii)
Summary of Rights. . . . . . . . . . . . . . . . . . . . . . .Section 3(b)
then outstanding . . . . . . . . . . . . . . . . . . . . . . .Section 1(d)
Trading Day. . . . . . . . . . . . . . . . . . . . . . . . . .Section 11(d)
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1(w)
Triggering Event . . . . . . . . . . . . . . . . . . . . . . .Section 1(x)
voting securities. . . . . . . . . . . . . . . . . . . . . . .Section 13(a)
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 10, 1994 (the "Agreement"),
between Lone Star Industries, Inc., a Delaware corporation (the "Corporation")
and Chemical Bank (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 December 19, 1994 (the "Record Date"), each Right representing the right to
purchase one one-tenth of a 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 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 15% 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 15% 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 be or 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 the Board of Directors determines in good faith
that a Person who would otherwise be an "Acquiring Person" has become such
inadvertently, and such Person (A) does not attempt to exercise any control
over the business affairs or management of the Corporation, including by means
of a proxy solicitation, and (B) divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person", then such Person shall not be deemed an "Acquiring Person"
for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended and
as in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement.
(d) 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 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 1(d)(ii)(B)) or disposing of any
securities of the Corporation.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, 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.
(e) "Board of Directors" shall mean the Board of Directors of
the Corporation from time to time.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, federal holiday or day on which commercial banks are authorized or
required to close in New York City.
(g) "Close of business" on any given date shall mean 5:00 p.m.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York time, on the next succeeding
Business Day.
(h) "Common Shares" when used with reference to the Corporation
shall mean the shares of Common Stock, par value $1.00, 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.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Exchange Act" means the Securities and Exchange Act of
1934, as amended.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Grandfathered Stockholder" shall mean (i) Metropolitan
Life Insurance Company and Metropolitan Insurance and Annuity Company,
collectively together with their Permitted Transferees, as to an aggregate
of 2,725,291 Common Shares, (ii) The TCW Group, Inc. and the Persons listed
on Exhibit A hereto, collectively together with their Permitted Transferees,
as to an aggregate of 2,025,337 Common Shares, and (iii) any Permitted
Transferee; provided, however, that any Grandfathered Stockholder, except as
provided in Section 1(a)(B) hereof, shall cease to be a Grandfathered
Stockholder at the time such Person, or any Affiliate or Associate of such
Person, beneficially owns additional Common Shares (other than as a result
of a stock dividend or stock split) equal to one percent or more of the
then outstanding Common Shares.
(m) "Permitted Offer" shall mean a tender or exchange offer
which is for all outstanding Common Shares at a price and on terms determined,
prior to the purchase of shares under such tender or exchange offer, by 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 and its stockholders (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.
(n) "Permitted Transfer" means any Transfer of some or all of
the Common Shares beneficially owned by a Grandfathered Stockholder and
referred to in the definition of Grandfathered Stockholder (with respect to
such Grandfathered Stockholder) to any Person that does not beneficially own,
after giving effect to such Transfer and any contemporaneous Transfer, any
Common Shares other than the Common Shares transferred by such Grandfathered
Stockholder to such Person in such Transfer and any additional Common Shares,
not exceeding one percent of the then outstanding Common Shares, as such
Person owned immediately prior to such Transfer.
(o) "Permitted Transferee" means any transferee of Common
Shares pursuant to a Permitted Transfer.
(p) "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.
(q) "Proposing Person" means any Person proposing or attempting
to effect a business combination, tender offer, exchange offer or similar
transaction with the Corporation or its stockholders, 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.
(r) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(s) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(t) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(u) "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;
provided, that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a)(ii) hereof, then no Shares Acquisition Date
shall be deemed to have occurred.
(v) "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.
(w) "Transfer" shall mean any sale, assignment, transfer or
other disposition.
(x) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation 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 such plan) of 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 Rights
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 is terminated prior to the occurrence of a
Distribution Date, 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 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 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 Lone Star Industries, Inc.
and Chemical Bank, dated as of November 10, 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 Lone
Star Industries, Inc. 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. Lone Star
Industries, Inc. 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 tenths of a Common Share 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.
The 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, Destroyed, 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 (or, following a Section 13 Event, other securities, as the
case may be) 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 November 10, 2004 (the
"Final Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date").
(b) The purchase price (the "Purchase Price") per whole Common
Share at which a holder of Rights may purchase Common Shares or (subject to
Section 14 hereof) fractions thereof upon exercise of such Rights shall
initially be $70.00, 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 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 (other than an
exercise pursuant to Section 11(a)(ii)), 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 after the occurrence of a
Section 11(a)(ii) Event it will, to the extent reasonably practicable, cause
to be reserved and kept available out of its authorized and unissued Common
Shares (and/or other securities), or any authorized and issued Common Shares
(and/or other securities) held in its treasury, the number of Common Shares
(or other securities, as the case may be) that will be sufficient to permit
the exercise in full of all outstanding 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,
(x) 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 (y) 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 any Rights be
less than the aggregate par value of the shares of capital stock of the
Corporation issuable upon exercise of such Rights. 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) thereafter be entitled to receive, upon
exercise thereof at a price equal to the then current Purchase Price for a
whole Common Share, 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 per whole Common Share by the number of one-
tenths of a Common Share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (e.g., if a Right was
exercisable immediately prior to a Section 11(a)(ii) Event for two one-tenths
of a share of Common Stock and the Purchase Price per whole Common Share was
$[X], the product would be [2X]), and dividing that product by (y) 50% of the
then current per share market price of the 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) If the number of Common Shares which are authorized by
the Corporation's certificate of incorporation but not outstanding or reserved
for issuance other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with Section 11(a)
(ii), the Corporation shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the then
current Purchase Price per whole Common Share, (A) (to the extent available)
Common Shares and then, (B) (to the extent available) other equity securities
of the Corporation which the Board of Directors has determined to be
essentially equivalent to Common Shares in respect to dividend, liquidation
and voting rights (such securities being referred to herein as "common share
equivalents") and then, if necessary (and to the extent feasible), (C) other
common equity securities of the Corporation, a reduction in the Purchase
Price, or any combination of the foregoing, having an aggregate value (as
determined by the Board of Directors based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors) equal
to the value of the Adjustment Shares; provided that (x) the Corporation may,
and (y) if the Corporation shall not have made adequate provision as required
above to deliver value within 30 days following the first occurrence of a
Section 11(a)(ii) Event, then the Corporation shall be obligated to, deliver,
upon the surrender for exercise of a Right and without requiring payment of
the Purchase Price (1) (to the extent available) Common Shares and then (2)
(to the extent available) common share equivalents and then, if necessary (and
to the extent feasible), (3) other common equity securities of the
Corporation, or any combination of the foregoing, having an aggregate value
(as determined by the Board of Directors based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors) equal
to the excess of the value of the Adjustment Shares over the Purchase Price;
provided further, that in the event there shall not be sufficient Common
Shares, common share equivalents and other common equity securities of the
Corporation to permit the issuance, upon the surrender for exercise of a
Right, of any combination of the foregoing having an aggregate value
(determined as aforesaid) equal to the excess of the value of the Adjustment
Shares over the Purchase Price, the Corporation shall be obligated to provide
for the issuance, upon the surrender for exercise of the Rights, such Common
Shares, common share equivalents and other common equity securities as will
result in all (and not less than all) of the Common Shares, common share
equivalents and other common stock equivalents not outstanding or reserved for
issuance other than upon exercise of the Rights being issued upon surrender of
the Rights, and upon such issuance the Corporation shall have no further
obligation to issue securities under Section 11(a)(ii). If a majority of the
Board of Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Shares could be authorized for issuance
upon exercise in full of the Rights, the 30 day period set forth above (such
period, as it may be extended, being referred to herein as the "Substitution
Period") may be extended to the extent necessary, but not more then 90 days
following the first occurrence of a Section 11(a) (ii) Event, in order that
the Corporation may seek stockholder approval for the authorization of such
additional shares. To the extent that some action is to be taken pursuant to
the first and/or second sentence of this Section 11(a) (iii), the Corporation
(X) shall provide, subject to Section 7(e), that such action shall apply
uniformly to all outstanding Rights and (Y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the appropriate form
and value of any consideration to be delivered as referred to in such first
and/or second sentence. If any such suspension occurs, the Corporation shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect.
(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 Rights be less
than the aggregate par value of the shares of capital stock of the Corporation
issuable upon exercise of such Rights. 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, 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, 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 any Rights be less than the aggregate par value
of the shares of capital stock of the Corporation to be issued upon exercise
of such Rights. 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) 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)), including, without limitation the Common Shares, 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. 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 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.
(e) Notwithstanding anything herein to the contrary (except the
last sentence of this Section 11(e)), no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a Common Share or 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)(i) or 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 ten-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 ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to the 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 Rights 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 aggregate par value, if any, of the
number of Common Shares or other securities issuable in respect of the
Purchase Price upon exercise of a Right, 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, 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 adjustment 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 shareholders.
(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 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 shareholders
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) 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 Section 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 Person, (y) the Corporation shall consolidate with,
or merge with, any 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 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, 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 for a whole Common Share, 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
for a whole Common Share by the number of one-tenths of a Common Share 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 subparagraph
(x) or (y) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons which 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. 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 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) 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 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 holder 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 shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting 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 it 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. In no event shall the Rights Agent be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action. The
indemnity provided for herein shall survive the expiration of the Rights, the
resignation or removal of the Rights Agent 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 delivered to the Rights Agent pursuant to Sections 6 and 7
of this 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
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 of 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 shareholder, 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 it believes in good faith 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, subsequent to the Distribution Date, 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 any successor Rights Agent, as the case may be, and to
the transfer agent of the Common Shares by registered or certified mail, and,
subsequent to the Distribution Date, 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 thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the 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 $50,000,000. 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,
subsequent to the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the successor
Rights Agent or the appointment of the 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 the Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable upon exercise of the Rights
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 earlier of the
Redemption Date and the Final Expiration Date, 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, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance of 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) The Board of
Directors 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. The
redemption of the Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, 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. The Corporation shall promptly give notice of any such redemption to
the Rights Agent and the holders of Rights in the manner set forth in Section
26, provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. 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.
Section 24. Exchange. (a) Subject to Section 24(d), the Board of
Directors may, at its option, at any time after the time that any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 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 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)) 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 (and not reserved
for issuance other than upon exercise of the Rights) to permit any exchange of
Rights as contemplated in accordance with this Section 24, the (i) Corporation
shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights, or (ii) the Board of
Directors may determine to exchange Common Shares for then outstanding and
exercisable Rights at such exchange ratio of less than one Common Share per
Right, appropriately adjusted as set forth in Section 24(a) above, so that all
(and not less than all) Common Shares issued but not outstanding or authorized
but unissued (and not reserved for issuance other than upon exercise of the
Rights) are issued in the exchange contemplated by this Section 24.
(d) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute common stock equivalents (as
defined in Section 11(a)(iii)) for shares of Common Stock exchangeable for
Rights, at the initial rate of one common stock equivalent for each share of
Common Stock, as appropriately adjusted to reflect adjustments in dividend
liquidation and voting rights of common stock equivalents pursuant to the
terms thereof, so that each common stock equivalent delivered in lieu of each
share of Common Stock shall have essentially the same dividend, liquidation
and voting rights as one share of Common Stock.
Section 25. Notice of Certain Events. (a) In case the
Corporation shall propose, at any time after the Distribution Date, (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 regular 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 the 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) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a filing by the Corporation with the Securities
and Exchange Commission shall constitute sufficient notice to the holders of
the securities of the Corporation, including the Rights, for purposes of this
Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, 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) or Section 13 hereof,
as the case may be, 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:
Lone Star Industries, Inc.
300 First Stamford Place
Stamford, Connecticut 06912-0014
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:
Chemical Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Vice President - Stock Transfer Administration
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. Prior to the Distribution
Date, the Corporation and the Rights Agent shall, if the Board of Directors 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, the Corporation and the Rights Agent shall, if
the Board of Directors 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 Board of Directors may deem
necessary or desirable and which shall not adversely effect 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.
Section 28. Determination and Actions by the Board of Directors of
the Corporation, etc. The Board of Directors shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors, 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 of Directors 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 Agents 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.
LONE STAR INDUSTRIES, INC.
By: John S. Johnson
Name: John S. Johnson
Title: Vice President
General Counsel and Secretary
CHEMICAL BANK
By: Barbara Y. Hall
Name: Barbara Y. Hall
Title: Vice President
Exhibit A
TCW Special Credits and TCW Asset Management Company,
together with various entities of which
TCW Special Credits is
a general partner or investment advisor
Exhibit B
[Form of Right Certificate]
No. R- Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 10, 2004 AND THE DATE ON
WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE
COMPANY AS SET FORTH IN THE RIGHTS AGREEMENT. AS 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
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD
BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL
AND VOID. [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 AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]
RIGHT CERTIFICATE
LONE STAR INDUSTRIES, INC.
This Right Certificate certifies that , or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of November 10, 1994
(the "Rights Agreement") between Lone Star Industries, Inc., a Delaware
corporation (the "Company"), and Chemical Bank (the "Rights Agent")) to
purchase from the Company, at any time after the Distribution Date and prior
to the Expiration Date, one one-tenth of a fully paid, nonassessable share of
the Common Stock, par value $0.01 (the "Common Shares"), of the Company at a
purchase price of $70.00 per whole Common Share (the "Purchase Price"),
payable in lawful money of the United States of America, upon surrender of
this Right Certificate, with the form of election to purchase and related
certificate duly executed, and payment of the Purchase Price at an office of
the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of November 10, 1994, and may have been
or in the future be adjusted as a result of the occurrence of certain events,
as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidence by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee
of a Acquiring Person (or any such Associate or Affiliate thereof) who becomes
a transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate thereof) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such, such Rights
shall become null and void without any further action, and no holder hereof
shall have any rights whatsoever with respect to such Rights, whether under
any provision of the Rights Agreement or otherwise.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability
of such Rights under the specific circumstances set forth in the Rights
Agreement.
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions set
forth in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the time that
any Person becomes an Acquiring Person or (ii) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right
(subject to adjustment); or
(b) at any time after the time that any Person becomes an
Acquiring Person (but before such Person, together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding),
exchange all or part of the then outstanding Rights (other than
Rights held by the Acquiring Person and certain related Persons)
for Common Shares at an exchange ratio of one Common Share per
Right (subject to adjustment).
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. If this Right Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole
Rights not exercised, or the Rights Agent shall place an appropriate notation
on this Right Certificate with respect to those Rights exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the 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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal by its authorized officers.
Dated as of , 19
LONE STAR INDUSTRIES, INC.
By:
Title:
[SEAL]
Attest:
Secretary
Countersigned:
CHEMICAL BANK
as Rights Agent
By
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered 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 Company, with full power of substitution.
Dated: , 19
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate are
are not being assigned by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it did did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person;
(3) the action requested by the undersigned is not prohibited
by the provisions of the Rights Agreement, including, without limitation, the
provisions relating to the (i) transfer, split-up, combination and exchange of
rights which are null and void or (ii) exercise by an Acquiring Person or an
Affiliate or Associate of an Acquiring Person of any Right which by its terms
is null and void.
Dated: , 19
Signature
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: LONE STAR INDUSTRIES, INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of
the Company or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such securities be issued in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights specified above shall not be all the
Rights evidenced by this Right Certificate, the Rights Agent shall place an
appropriate notation on this Right Certificate with respect to those Rights
exercised or a new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate are are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it did did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person;
(3) the exercise of the Rights evidenced by this Right
Certificate is not prohibited by the terms of the Rights Agreement, including,
without limitation, the provisions relating to the exercise by an Acquiring
Person or an Affiliate or Associate of an Acquiring Person of any Right which
by its terms is null and void.
Dated: , 19
Signature
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE SHARES
On November 10, 1994, the Board of Directors of Lone Star
Industries, Inc. (the "Corporation") declared a dividend distribution of one
right (a "Right") to purchase one one-tenth of a share of the Common Stock,
$1.00 par value, of the Corporation (the "Common Shares") for each outstanding
share of Common Stock, payable to the stockholders of record on December 19,
1994 (the "Record Date"). The Board of Directors also authorized and directed
the issuance of one Right with respect to each Common Share 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 one-tenth of a Common
Share at a price of $[ ] per whole 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
Chemical Bank, as Rights Agent (the "Rights Agent"), dated as of November 10,
1994.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Shares upon the earliest to occur of (i) a person or group of affiliated or
associated persons having acquired beneficial ownership of 15% 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 of
Directors may determine) following the commencement of, or announcement of an
intention to make, 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 earliest 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, certain stockholders who currently own in
excess of 15% of the outstanding Common Shares and their affiliates and
permitted transferees will not be deemed to be Acquiring Persons and their
ownership will not cause a Distribution Date unless they acquire an additional
one percent or more of the outstanding Common Shares. Furthermore, a person
who acquires Common Shares pursuant to a tender or exchange offer which is for
all outstanding Common Shares at a price and on terms which a majority of the
Board of Directors determines (prior to acquisition) to be adequate and in the
best interests of the Corporation and its stockholders (other than such
person, its affiliates and associates) (a "Permitted Offer") will not be
deemed to be an Acquiring Person and such person's ownership will not
constitute a Distribution Date.
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 the 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, even without such notation or
a copy of this Summary of Rights being attached thereto, 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 ("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 such 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 November 10, 2004, unless earlier
redeemed by the Corporation as described below.
In the event that any person becomes an Acquiring Person, each
holder of Rights (other than Rights that have become void as described below)
will thereafter have the right (the "Flip-In Right") to receive, upon exercise
of such Rights, the number of Common Shares (or, in certain circumstances,
other securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the aggregate exercise price of such
Rights. The Board, at its option, may exchange each Right (other than those
that have become void as described below) for one Common Share in lieu of the
Flip-In Right, provided no person is the beneficial owner of 50% or more of
the Common Shares at the time of such exchange. Notwithstanding the
foregoing, following the occurrence of the event described above, all Rights
that are or (under certain circumstances specified in the Rights Agreement)
were beneficially owned by any Acquiring Person or any affiliate or associate
thereof 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, then
each holder of Rights (except Rights which previously have been voided as set
forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise of such Rights, common shares of the acquiring company
having a value equal to two times the aggregate exercise price of the Rights;
provided, however, that the Flip Over Right shall not apply to any transaction
described in clause (i) if (x) such transaction is with a person or persons
(or a wholly owned subsidiary of any such person or persons) that acquired
Common Shares pursuant to a Permitted Offer and (y) the price and form of
consideration offered in such transaction is the same as that paid to all
holders of Common Shares whose shares were purchased to the Permitted Offer.
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).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional Common Shares will be issued 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 in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective at such time, on such
basis and with such conditions as the Board of Directors may establish in its
sole discretion. The Corporation may, at its option, pay the Redemption Price
in Common Shares.
All of the provisions of the Rights Agreement may be amended by
the Board of Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
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.
