SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) March 3, 2000
ADVANCED TECHNICAL PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-01298 11-1581582
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
200 MANSELL COURT EAST, SUITE 505
ROSWELL GEORGIA, 30076
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (770) 993-0291
<PAGE>
Item 5. Other Events.
On March 3, 2000, Advanced Technical Products, Inc. (the 'Corporation')
issued a press release relating to the adoption by the Board of Directors (the
'Board') of a Stockholder Rights Plan. The March 3, 2000 press release of the
Corporation is attached hereto as Exhibit 99.1.
On March 3, 2000, the Board declared a dividend distribution of one
preferred share purchase right (a 'Right') for each outstanding share of Common
Stock, par value $.01 per share (the 'Common Stock'), of the Corporation. The
dividend is payable to the stockholders of record on March 10, 2000 (the 'Record
Date') with respect to shares of Common Stock issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to shares of Common Stock 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 tenth (1/10th) of a share of Series
RP Preferred Stock of the Corporation, $1.00 par value per share (the 'Preferred
Stock'), at a price of $38.00 per one tenth (1/10th) of a share of Preferred
Stock (the 'Purchase Price'), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the 'Rights Agreement')
between the Corporation and American Stock Transfer & Trust Company, as Rights
Agent (the 'Rights Agent'), dated as of March 3, 2000.
Initially, the Rights will be attached to certificates representing shares
of Common Stock then outstanding, and no separate certificates representing the
Rights ('Right Certificates') will be distributed. The Rights will separate from
the Common Stock upon the earlier to occur of (i) a person or group of
affiliated or associated persons having acquired, without the prior approval of
the Board, beneficial ownership of 15% or more of the outstanding shares of
Common Stock or (ii) 10 days, or such later date as the Board 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 of affiliated or associated persons becoming an Acquiring Person (as
hereinafter defined) except pursuant to a Permitted Offer (as hereinafter
defined) (the 'Distribution Date'). A person or group whose acquisitions of
shares of Common Stock cause a Distribution Date pursuant to clause (i) above is
an 'Acquiring Person,' with certain exceptions as set forth in the Rights
Agreement. The date that a person or group is first publicly announced to have
become such by the Corporation or such Acquiring Person is the 'Shares
Acquisition Date.'
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the associated shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuance of shares of Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, even
without attaching thereto such notation or a copy of the Summary of Rights
attached to the Rights Agreement as Exhibit C, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, Right
Certificates will be mailed to the holders of record of shares of the Common
Stock as of the Close of Business (as defined in the Rights Agreement) on the
Distribution Date (and to each initial record holder of certain shares of Common
Stock issued after the Distribution Date), and such separate Right Certificates
alone will evidence the Rights.
<PAGE>
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 3, 2010, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding shares of Common
Stock at a price and on terms which a majority of certain members of the Board
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a 'Permitted Offer')), each holder of a
Right will thereafter have the right (the 'Flip-In Right') to receive upon
exercise the number of shares of Common Stock (or, in certain circumstances, of
one tenths (1/10ths) of a share of Preferred Stock or other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the then-applicable Purchase Price of the Right. 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. The Board has the option, at any time after any
person becomes an Acquiring Person, to exchange all or part of the
then-exercisable Rights (excluding those that have become void, as described in
the immediately preceding sentence) for shares of Common Stock, at an exchange
ratio determined by dividing the then-applicable Purchase Price by the
then-current market price per share of Common Stock as determined in accordance
with the Rights Agreement. However, this option generally terminates if any
person becomes the beneficial owner of 50% or more of the Common Stock.
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 shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to (x) an Acquiring Person or any affiliate or associate
thereof or (y) any other person in which such Acquiring Person, affiliate or
associate has an interest or any person acting on behalf of or in concert with
such Acquiring Person, affiliate or associate, or (z) if, in such transaction,
all holders of shares of Common Stock are not treated alike, any other person,
then each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the 'Flip-Over Right') to
receive, upon exercise, common shares of the acquiring company (or, in certain
circumstances, its parent) having a value equal to two times the exercise price
of the Right. The holder of a Right will continue to have the Flip-Over Right
whether or not such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred Stock,
shares of Common Stock 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 Preferred Stock, (ii) upon the grant to holders of shares of the Preferred
Stock of certain rights or warrants to subscribe for or purchase shares of
Preferred Stock at a price, or securities convertible into Preferred Stock with
a conversion price, less than the then current market price of the Preferred
<PAGE>
Stock or (iii) upon the distribution to holders of shares of the Preferred Stock
of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one tenths (1/10ths) of
a share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price (payable in cash or, at the Corporation's election, in Common Stock)
of $.001 per Right (the 'Redemption Price'), which redemption shall be effective
upon the action of the Board. Additionally, following the Shares Acquisition
Date, the Corporation may redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price, provided that such redemption is in connection
with a merger or other business combination transaction or series of
transactions involving the Corporation in which all holders of shares of Common
Stock are treated alike but not involving an Acquiring Person or its affiliates
or associates.
Other than those provisions relating to the rights, duties and obligations
of the Rights Agent and certain principal economic terms of the Rights, all of
the provisions of the Rights Agreement may be amended by the Board 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 that 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.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
<PAGE>
As of March 3, 2000, there were 5,380,178 shares of Common Stock
outstanding. Each share of Common Stock outstanding on the Record Date will
receive one Right. As long as the Rights are attached to the shares of Common
Stock, the Corporation will issue one Right with each new share of Common Stock
so that all such shares will have attached rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired. However, the Rights should not
interfere with any tender offer or merger approved by the Corporation (other
than with an Acquiring Person) because the Rights do not become exercisable in
the event of a Permitted Offer or other acquisition exempted by the Board.
The Rights Agreement provides that neither The Veritas Capital Fund, L.P.
nor any of its affiliates shall be an Acquiring Person solely by reason of being
a party to the January 2000 Agreement and Plan of Merger, dated as of January
28, 2000, by and among the Corporation, ATP Acquisition Corp. and ATP Holding
Corp. or by reason of the existence of such agreement.
Attached hereto as Exhibit 4.1 and incorporated herein by reference are
copies of the Rights Agreement and the exhibits thereto, as follows: Exhibit A
- -- Form of Certificate of Designation, Preferences and Rights of Series RP
Preferred Stock of Advanced Technical Products, Inc.; Exhibit B -- Form of Right
Certificate; and Exhibit C -- Summary of Rights to Purchase Preferred Stock. The
foregoing description of the Rights is qualified in its entirety by reference to
the Rights Agreement and such exhibits thereto.
<PAGE>
Item 7. Exhibits.
4.1 Rights Agreement, dated as of March 3, 2000, between Advanced Technical
Products, Inc. and American Stock Transfer & Trust Company, as Rights
Agent, which includes: as Exhibit A thereto, the Form of Certificate of
Designation, Preferences and Rights of Preferred Stock of Advanced
Technical Products, Inc.; as Exhibit B thereto, the Form of Right
Certificate; and, as Exhibit C thereto, the Summary of Rights to Purchase
Preferred Stock.
99.1 Press Release issued by the Corporation on March 3, 2000
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
ADVANCED TECHNICAL PRODUCTS, INC.
By: /s/Garrett L. Dominy
Garrett L. Dominy
Executive Vice President,
Chief Financial Officer
Date: March __, 2000
<PAGE>
EXHIBIT INDEX
Exhibit Description
4.1 Rights Agreement, dated as of March 3, 2000, between Advanced Technical
Products, Inc. and American Stock Transfer & Trust Company as Rights Agent,
which includes: as Exhibit A thereto, the Form of Certificate of
Designation, Preferences and Rights of Series RP Preferred Stock of
Advanced Technical Products, Inc.; as Exhibit B thereto, the Form of Right
Certificate; and, as Exhibit C thereto, the Summary of Rights to Purchase
Preferred Stock.
99.1 Press Release issued by the Corporation on March 3, 2000.
<PAGE>
Exhibit 4.1
<PAGE>
ADVANCED TECHNICAL PRODUCTS, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MARCH 3, 2000
<PAGE>
RIGHTS AGREEMENT
This RIGHTS AGREEMENT (this 'Agreement') is made as of this 3rd day of
March, 2000 by and between Advanced Technical Products, Inc., a Delaware
corporation (the 'Corporation'), and American Stock Transfer & Trust Company, a
New York corporation (the 'Rights Agent'), with respect to the following facts
and circumstances.
A. The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a 'Right') for each share of
Common Stock (as hereinafter defined) of the Corporation outstanding at the
Close of Business (as hereinafter defined) on March 10, 2000 (the 'Record
Date'), each Right representing the right to purchase one tenth (1/10th) of a
share of Preferred Stock (as hereinafter defined), upon the terms and subject to
the conditions herein set forth.
B. The Board of Directors of the Corporation has further authorized and
directed the issuance of one Right with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 22 of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein set forth, the parties hereby agree as follows:
Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated: 'Acquiring Person' means any Person, who or which, together with all
<PAGE>
Affiliates and Associates of such Person, without the prior approval of the
Corporation's Board of Directors, shall be the Beneficial Owner of 15% or more
of the then outstanding shares of Common Stock (other than as a result of a
Permitted Offer) 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 shares of Common Stock. 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 or any
Subsidiary of the Corporation for or pursuant to the terms of any such plan, or
(v) any Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 15% or more of the then outstanding
shares of Common Stock as a result of the acquisition of shares of Common Stock
directly from the Corporation; and (B) no Person shall be deemed to be an
'Acquiring Person' either (i) as a result of the acquisition of Common Stock by
the Corporation which, by reducing the number of shares of Common Stock
outstanding, increases the proportional number of shares beneficially owned by
such Person together with all Affiliates and Associates of such Person;
provided, however, that if (X) a Person would become an Acquiring Person (but
for the operation of this subclause (B)(i)) as a result of the acquisition of
shares of Common Stock by the Corporation, and (Y) after such share acquisition
by the Corporation, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional shares of Common Stock, then such
Person shall be deemed an Acquiring Person, or (ii) if (X) within eight (8) days
after such Person would otherwise have become an Acquiring Person (but for the
operation of this subclause (B)(ii)), such Person notifies the Board of
Directors of the Corporation that such Person did so inadvertently and (Y)
within two (2) Business Days (as defined in Section 1.8 hereof) after such
notification, such Person is the Beneficial Owner of shares representing less
than 15% of the Voting Power; further provided, that neither The Veritas Capital
Fund, LP ('Veritas') nor any of its Affiliates shall be an Acquiring Person
solely by reason of having executed and delivered and being a party to, that
certain January 2000 Agreement and Plan of Merger, dated as of January 28, 2000,
among the Corporation, ATP Acquisition Corp. and ATP Holding Corp. or by reason
of the existence of such agreement (which Agreement and Plan of Merger has been
approved by the Board of Directors of the Corporation as a permitted offer
within the meaning of Section 1.20 hereof).
'Act' means the Securities Act of 1933, as amended.
'Adjusted Number of Shares' and 'Adjusted Purchase Price' have the
respective meanings set forth in Section 11.1.3 hereof.
<PAGE>
'Adjustment Shares' has the meaning set forth in Section 11.1.2 hereof.
'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.
The term 'current per share market price' shall have the meaning set forth
in Section 11.4.1 hereof when used with respect to a 'Security' (as defined in
said Section 11.4.1) and shall have the meaning set forth in Section 11.4.2 when
used with respect to the Preferred Stock.
A Person is the 'Beneficial Owner' of and 'beneficially owns' any
securities which:
such Person or any of such Person's Affiliates or Associates beneficially
owns, directly or indirectly;
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
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 relating to the acquisition, holding, voting (except to the extent
contemplated by the proviso to subclause (B) of Section 1.7.2), or disposing of
any securities of the Corporation.
Notwithstanding anything in this Section 1.7 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.
<PAGE>
Notwithstanding anything in this Section 1.7 to the contrary, no Person
shall be deemed to beneficially own any securities solely by reason of such
Person being a party to a customary agreement pursuant to which such Person acts
or agrees to act as an underwriter with respect to a bona fide public offering
of securities.
No decision reached, or action taken, by the Board of Directors of the
Corporation or any committee thereof shall cause any Person (or any Affiliate or
Associate of such Person) who is a member of the Board of Directors of the
Corporation or such committee to be deemed, for the purposes of this Agreement,
to be a Beneficial Owner of any securities beneficially owned by any other
Person (or any Affiliate or Associate of such Person) who is a member of the
Board of Directors of the Corporation or any committee thereof solely by reason
of such membership of the Board of Directors or any committee thereof or
participation in the decisions or actions thereof on the part of either or both
of such Persons.
<PAGE>
'Business Day' means any day other than a Saturday, a Sunday, a day on
which banking institutions in the State of New York or the city in which the
office of the Rights Agent is located are obligated by law or executive order to
close, or a United States federal holiday.
'Capital Stock Equivalents' has the meaning set forth in Section 11.1.3
hereof.
'Close of Business' on any given date means 5:00 P.M., Eastern time, on
such date; provided, however, that if such date is not a Business Day it means
5:00 P.M., Eastern time, on the next succeeding Business Day.
'Common Stock' when used with reference to the Corporation means the Common
Stock 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
Stock' when used with reference to any Person other than the Corporation means
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.
'Corporation' means Advanced Technical Products, Inc., a Delaware
corporation, and also means a Principal Party to the extent provided in
Section 13.1 hereof.
'Distribution Date' has the meaning set forth in Section 3.1 hereof.
'Equivalent Preferred Stock' has the meaning set forth in Section 11.2
hereof.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Exchange Ratio' has the meaning set forth in Section 26.1 hereof.
'Final Expiration Date' has the meaning set forth in Section 7.1 hereof.
'Interested Stockholder' means any Acquiring Person or any Affiliate or
Associate of an Acquiring Person or any other Person in which any such Acquiring
Person, Affiliate or Associate has an interest, or any other Person acting
directly or indirectly on behalf of or in concert with any such Acquiring
Person, Affiliate or Associate.
'NASDAQ' has the meaning set forth in Section 11.4.1 hereof.
<PAGE>
'Permitted Offer' means a tender, exchange or business combination offer or
proposal which is for all outstanding shares of Common Stock of the Corporation
at a price and on terms determined, prior to the purchase of shares under such
tender or exchange offer, by at least a majority of the members of the Board of
Directors who are not officers of the Corporation and who are not Acquiring
Persons or Affiliates, Associates, nominees or representatives of an Acquiring
Person, to be adequate (taking into account all factors that such directors deem
pertinent including, without limitation, prices that could reasonably be
achieved if the Corporation or its assets were sold on an orderly basis designed
to realize maximum value) and otherwise in the best interests of the
Corporation, its stockholders (other than the Person or any Affiliate or
Associate thereof on whose basis the offer is being made) and other relevant
constituencies, taking into account all factors that such directors may deem
pertinent.
'Person' means any individual, firm, partnership, corporation, limited
liability company, limited liability partnership, trust, association, joint
venture or other entity, and includes any successor (by merger or otherwise) of
such entity.
'Preferred Stock' means shares of the Corporation's Series RP Preferred
Stock, par value $1.00 per share, having the relative rights, preferences and
limitations set forth in the Form of Certificate of Designation, Preferences and
Rights of Series RP Preferred Stock attached to this Agreement as Exhibit A.
'Principal Party' has the meaning set forth in Section 13.2 hereof.
'Proration Factor' has the meaning set forth in Section 11.1.3 hereof.
'Purchase Price' has the meaning set forth in Section 4.1 hereof.
'Record Date' has the meaning set forth in Recital A hereof.
'Redemption Date' has the meaning set forth in Section 7.1 hereof.
'Redemption Price' has the meaning set forth in Section 23.1.1 hereof.
'Right Certificate' has the meaning set forth in Section 3.1 hereof.
'Rights' has the meaning set forth in Recital A hereof.
<PAGE>
'Rights Agent' means American Stock Transfer & Trust Company, a New York
corporation, as Rights Agent hereunder, and, from the time of its succession,
any successor Rights Agent under Section 19 or Section 21 hereof.
'Section 11.1.2 Event' has the meaning set forth in Section 11.1.2 hereof.
'Section 13 Event' means any event described in clause (x), (y) or (z) of
Section 13.1 hereof.
'Shares Acquisition Date' means 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 or that facts exist as a result
of which there exists an Acquiring Person; provided, that, if such Person is
determined by the Board of Directors of the Corporation not to have become an
Acquiring Person pursuant to subclause (B)(ii) of Section 1.1 hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
'Subsidiary' of any Person means 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.
'Summary of Rights' has the meaning set forth in Section 3.2 hereof.
'Trading Day' has the meaning set forth in Section 11.4.1 hereof.
'Triggering Event' means any Section 11.1.2 Event or any Section 13 Event.
The term 'voting securities' has the meaning set forth in Section 13.1
hereof.
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, upon ten
(10) days' prior written notice to the Rights Agent. The Rights Agent shall have
no duty to supervise, and in no event shall be liable for, the acts or omissions
of any such co-Rights Agent.
<PAGE>
Issuance of Right Certificates.
Until the earlier of (i) the Shares Acquisition Date or (ii) the Close of
Business on the tenth (10th) 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 or any Subsidiary of the Corporation for or pursuant to the
terms of any such plan) of, or after the date of the first public announcement
of the intention of any Person (other than the Corporation, any Subsidiary of
the Corporation, any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation or any Person or entity organized, appointed or
established by the Corporation or any Subsidiary of the Corporation for or
pursuant to the terms of any such plan) to commence (which intention to commence
remains in effect for five (5) Business Days after such announcement), a tender
or exchange offer the consummation of which would result in any Person becoming
an Acquiring Person (including, in the case of both (i) and (ii), any such date
which is after the date of this Agreement and prior to the issuance of the
Rights) (the 'Distribution Date'), (x) the Rights will be evidenced (subject to
the provisions of Section 3.2 hereof) by the certificates for shares of Common
Stock registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of the underlying shares of Common Stock (including
a transfer to the Corporation); provided, however, that if a tender or exchange
offer or approved business combination proposal is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a
result of such tender or exchange 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 shares of Common
Stock 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 share of Common Stock so held. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
<PAGE>
As promptly as practicable, the Corporation will send a copy of a
Summary of Rights to Purchase Preferred Stock, in substantially the form of
Exhibit C hereto (the 'Summary of Rights'), by first-class, postage-prepaid
mail, to each record holder of shares of Common Stock 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 shares of Common Stock
outstanding as of the Record Date, until the Distribution Date the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with 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 shares of Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with such shares of Common Stock.
Certificates for shares of Common Stock that become outstanding (including,
without limitation, reacquired shares of Common Stock referred to in the last
sentence of this Section 3.3) after the Record Date but prior to the earliest of
the Distribution Date, 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 Advanced Technical Products, Inc. and American Stock
Transfer & Trust Company, a New York corporation, as Rights
Agent, dated as of March 3, 2000 (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
Advanced Technical Products, 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. Advanced Technical Products, 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 shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
<PAGE>
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented
thereby. In the event that the Corporation purchases or acquires any shares of
Common Stock after the Record Date but prior to the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Corporation shall not be entitled to exercise any Rights associated
with the Common Stock that are no longer outstanding.
Form of Right Certificate.
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 (which may not affect the duties and
responsibilities of the Rights Agent) 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 one tenth (1/10th) of a share of Preferred Stock as
shall be set forth therein at the price per one tenth (1/10th) of a share of
Preferred Stock set forth therein in accordance with Section 7.2 hereof (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.
Any Right Certificate issued pursuant to Section 3.1 or Section 22 hereof
that represents Rights that are null and void pursuant to Section 7.6 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
and upon notice by the Corporation to the Rights Agent that this Section 4.2 has
become applicable) 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.
<PAGE>
The provisions of Section 7.6 of this Agreement shall be operative whether
or not the foregoing legend is contained on any such Right Certificate.
Countersignature and Registration.
The Right Certificates shall be executed on behalf of the Corporation by
its President or any Vice President and the Secretary or an Assistant Secretary,
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, either
manually or by facsimile signature, 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, and receipt by the Rights Agent of a list
of record holders of Rights, the Rights Agent will keep or cause to be kept, at
its office designated pursuant to Section 25 hereof as the appropriate place for
surrender or transfer of the Right Certificates, 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 the face of each of the Right Certificates and the
certificate number and the date of each of the Right Certificates.
<PAGE>
Transfer, Split-Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 4.2, Section 7.6 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
one tenth (1/10th) of a share of Preferred Stock (or, following a Triggering
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 or the Rights Agent shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4.2, Section 7.6
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
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates. The Rights Agent may in its sole
discretion require the Corporation or the Person entitled to such Right
Certificate to provide evidence that such tax or charge has been paid prior to
countersigning and delivering any Right Certificate pursuant to this Section
6.1.
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.
<PAGE>
Exercise of Rights; Purchase Price; Expiration Date of Rights.
Subject to Section 7.6 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 and properly executed, to
the Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price for the total number of
one tenth (1/10th) of a share of Preferred Stock (or other securities, as the
case may be) as to which such surrendered Rights are exercised, at or prior to
the earlier to occur of (i) the Close of Business on March 9, 2010 (the 'Final
Expiration Date'), or (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the 'Redemption Date').
The Purchase Price for each one tenth (1/10th) of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $38.00, shall be
subject to adjustment from time to time as provided in the next sentence and in
Sections 11 and 13.1 hereof and shall be payable in accordance with paragraph
7.3 below. Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Corporation shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then, in any such case, each share of Common Stock
outstanding following such subdivision, combination or consolidation shall
continue to have a Right associated therewith and the Purchase Price following
any such event shall be proportionately adjusted to equal the result obtained by
multiplying the Purchase Price immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event. The adjustment provided for
in the preceding sentence shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
<PAGE>
Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate on the reverse side
thereof duly and properly executed, accompanied by payment of the Purchase Price
for the Preferred Stock (or other securities, as the case may be) to be
purchased and an amount equal to any applicable tax or charge 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 Preferred Stock certificates for the number of shares
of Preferred Stock 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 Preferred
Stock issuable upon exercise of the Rights hereunder into a depositary,
requisition from the depositary agent depositary receipts representing such
number of one tenth (1/10th) of a share of Preferred Stock as are to be
purchased (in which case certificates for the Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the 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 (including shares of Common Stock) of the Corporation pursuant to
Section 11.1 hereof, the Corporation will make all arrangements necessary so
that such other securities are available for distribution by the Rights Agent,
if and when necessary to comply with this Agreement.
In addition, in the case of an exercise of the Rights by a holder pursuant
to Section 11.1.2, 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 11.1.2 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 that continue to include the rights provided by Section
11.1.2.
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 6 and Section 14
hereof, or the Rights Agent shall place an appropriate notation on the Right
Certificate with respect to those Rights exercised.
<PAGE>
Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11.1.2 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 (or from any
Affiliate or Associate thereof) 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 that the Board of Directors of the Corporation has determined is part
of a plan, arrangement or understanding that has as a primary purpose or effect
the avoidance of this Section 7.6, 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 notify the Rights Agent when this Section 7.6
applies and shall use all reasonable efforts to insure that the provisions of
this Section 7.6 and Section 4.2 hereof are complied with, but neither the
Corporation nor the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Corporation's failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
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)
properly 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 or the Rights Agent shall reasonably request.
<PAGE>
Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Corporation or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by 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 cancelled Right Certificates to the Corporation,
or shall, at the written request of the Corporation, destroy such cancelled
Right Certificates, and in such case shall deliver a certificate of destruction
thereof to the Corporation.
Reservation and Availability of Preferred Stock.
The Corporation covenants and agrees that, at all times prior to the
occurrence of a Section 11.1.2 Event, it will cause to be reserved and kept
available out of its authorized and unissued Preferred Stock, or any authorized
and issued Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of a Section 11.1.2 Event, shall,
to the extent reasonably practicable, so reserve and keep available a sufficient
number of shares of Common Stock (and/or other securities) that may be required
to permit the exercise in full of the Rights pursuant to this Agreement.
So long as the shares of Preferred Stock (and, after the occurrence of a
Section 11.1.2 Event, shares of Common Stock or any other securities) issuable
upon the exercise of the Rights may be listed on any stock exchange, the
Corporation shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares or other securities 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 shares of Preferred Stock (or shares of
Common Stock and/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.
<PAGE>
The Corporation covenants and agrees that it will pay when due and payable
any and all taxes and charges that may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred Stock (or
shares of Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Corporation shall not, however, be required to pay any
tax or charge that 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 shares of Preferred Stock (or shares
of Common Stock and/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 shares of Preferred Stock (or shares of Common Stock
and/or other securities, as the case may be) upon the exercise of any Rights,
until any such tax or charge shall have been paid (any such tax or charge 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 or charge is due.
The Corporation shall use its best efforts to (i) file, as soon as
practicable following the Shares Acquisition Date, 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 period for exercise of the Rights
provided by Section 11.1.2. The Corporation will also take such action as may be
appropriate under the blue sky laws of the various states.
Preferred Stock Record Date.
Each Person in whose name any certificate for shares of Preferred Stock (or
shares of Common Stock and/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 shares of Preferred Stock (or shares of Common Stock
and/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 taxes and charges) was made; provided, however, that, if the date of
such surrender and payment is a date upon which the shares of Preferred Stock
(or shares of Common Stock and/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 shares of Preferred Stock (or shares
of Common Stock and/or other securities, as the case may be) transfer books of
the Corporation are open.
<PAGE>
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.
<PAGE>
Adjustment Events.
In the event the Corporation shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in Preferred
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of Preferred Stock or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11.1 and Section 7.6 hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock that, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Corporation
were open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Corporation issuable upon exercise of
one Right. If an event occurs that would require an adjustment under both
Section 11.1.1 and Section 11.1.2, the adjustment provided for in this Section
11.1.1 shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11.1.2.
<PAGE>
In the event (a 'Section 11.1.2 Event') that 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 7.6 hereof) shall, for a period of sixty (60) days
(or such longer period as the Corporation's Board of Directors may determine at
any time prior to or during such period of sixty (60) days) after the later of
the occurrence of any such event or the effective date of an appropriate
registration statement under the Act pursuant to Section 9.5 hereof, have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement, such number of
shares of Common Stock (or, in the discretion of the Corporation's Board of
Directors, one tenth (1/10th) of a share of Preferred Stock) as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the then
number of one tenth (1/10th) of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11.1.2 Event,
and (y) dividing that product by 50% of the then current per share market price
of the Common Stock (determined pursuant to Section 11.4 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 11.1.2.
<PAGE>
In the event that there shall not be sufficient treasury or authorized but
unissued (and unreserved) Common Stock to permit the exercise in full of the
Rights in accordance with Section 11.1.2 and the Rights become so exercisable
(and the Board of Directors of the Corporation has not determined to make the
Rights exercisable solely into fractions of a share of Preferred Stock),
notwithstanding any other provision of this Agreement, to the extent necessary
and permitted by applicable law, each Right except as provided below and in
Section 7.6 hereof shall thereafter represent the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, (x) a number of (or fractions of) shares of Common Stock
calculated by dividing the maximum number of shares of Common Stock that may
permissibly be issued by the number of outstanding Rights and (y) a number of
one tenth (1/10th) of shares of Preferred Stock or a number of, or fractions of,
other equity securities of the Corporation (or, in the discretion of the Board
of Directors of the Corporation, debt) that the Board of Directors of the
Corporation has determined to have an aggregate current market value (determined
pursuant to Section 11.1.1 and Section 11.1.2 hereof, to the extent applicable)
equal to the difference between (1) the aggregate current market value of the
Adjustment Shares (assuming such shares of Common Stock could be issued pursuant
to Section 11.1.2 hereof) and (2) the aggregate current market value of the
shares of Common Stock issued in respect of such Right pursuant to the preceding
clause (x) (such number of, or fractions of, shares of Preferred Stock, debt or
other equity securities or debt of the Corporation being referred to as a
'Capital Stock Equivalent'); provided, however, if sufficient shares of Common
Stock and/or Capital Stock Equivalents are unavailable, then the Corporation
shall, to the extent permitted by applicable law, take all such action as may be
necessary to authorize additional shares of Common Stock or Capital Stock
Equivalents for issuance upon exercise of the Rights, including the calling of a
meeting of stockholders; and provided, further, that if the Corporation is
unable to cause sufficient shares of Common Stock and/or Capital Stock
Equivalents to be available for issuance upon exercise in full of the Rights,
then each Right shall thereafter represent the right to receive the Adjusted
Number of Shares upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined). As used herein, the term 'Adjusted Number of Shares' shall
be equal to that number of (or fractions of) shares of Common Stock (and/or
Capital Stock Equivalents) equal to the product of (x) the number of Adjustment
Shares and (y) a fraction, the numerator of which is the number of shares of
Common Stock (and/or Capital Stock Equivalents) available for issuance upon
exercise of the Rights and the denominator of which is the aggregate number of
Adjustment Shares otherwise issuable upon exercise in full of all Rights
(assuming there were a sufficient number of shares of Common Stock available)
(such fraction being referred to as the 'Proration Factor'). The 'Adjusted
Purchase Price' shall mean the product of the Purchase Price and the Proration
Factor. The Board of Directors of the Corporation may, but shall not be required
to, establish procedures to allocate the right to receive shares of Common Stock
and Capital Stock Equivalents upon exercise of the Rights among holders of
Rights.
<PAGE>
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 Preferred Stock
entitling them (for a period expiring within 60 calendar days after such record
date) to subscribe for or purchase shares of Preferred Stock (or shares having
the same rights, privileges and preferences as the Preferred Stock ('Equivalent
Preferred Stock')) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or Equivalent Preferred
Stock (or having a conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preferred Stock) less than the then
current per share market price of the Preferred Stock (as determined pursuant to
Section 11.4 hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock that the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date plus the
number of additional shares of Preferred Stock and/or Equivalent Preferred Stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Preferred Stock 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 that would then be in effect if such record date had not been
fixed.
<PAGE>
In case the Corporation shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
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 Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11.2 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 11.4 hereof) of the Preferred Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which shall
be such current per share market price of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value, if any, of the shares of
capital stock of the Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
Computation of 'Current Per Share Market Price.'
<PAGE>
For the purpose of any computation hereunder, the 'current per share market
price' of any security (a 'Security' for the purpose of this Section 11.4.1) 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 immediately prior
to and not including 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 (but not including) the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System ('NASDAQ') or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Corporation. If on any such date no such market maker
is making a market in the Security, the fair value of the Security on such date
as determined in good faith by the Board of Directors of the Corporation shall
be used. The term 'Trading Day' shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.
<PAGE>
For the purpose of any computation hereunder, the 'current per share market
price' of the Preferred Stock shall be determined in accordance with the method
set forth in Section 11.4.1. If the shares of Preferred Stock are not publicly
traded, the 'current per share market price' of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the Common Stock
as determined pursuant to Section 11.4.1 (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by ten (10). If neither the Common Stock nor the Preferred
Stock are publicly held or so listed or traded, 'current per share market price'
shall mean, with respect to the Preferred Stock, the fair value per share as
determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.
Anything herein to the contrary notwithstanding, 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 that by reason of this Section 11.5 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one tenth (1/10th) of a share of Preferred Stock or of
any other share or security as the case may be. Notwithstanding the first
sentence of this Section 11.5, 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 that mandates such adjustment or (ii) the Final Expiration Date.
If as a result of an adjustment made pursuant to Section 11.1.2 or Section
13.1 hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Corporation other than Preferred
Stock, 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
Preferred Stock contained in Section 11.1 through 11.3, inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares.
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 one tenth (1/10th) of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
<PAGE>
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 one tenth (1/10th) of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one tenth (1/10th) of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one hundred-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Corporation shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made, and shall deliver a copy of such public
announcement to the Rights Agent. 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 11.8, the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Corporation, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
Irrespective of any adjustment or change in the Purchase Price or the number of
one tenth (1/10th) of a share of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one tenth (1/10th) of a
share of Preferred Stock that were expressed in the initial Right Certificates
issued hereunder.
<PAGE>
Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one tenth
(1/10th) of a share of Preferred Stock, share of Common Stock or other
securities issuable upon exercise of the Rights, the Corporation shall take any
corporate action that 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 one tenth (1/10th) of a share of Preferred Stock, share of Common
Stock or other securities at such adjusted Purchase Price.
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 of the
Preferred Stock, shares of Common Stock or other securities of the Corporation,
if any, issuable upon such exercise over and above the Preferred Stock, shares
of Common Stock or other securities of the Corporation, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment and shall deliver to the Rights Agent a notice describing the terms
of such due bill or other appropriate instrument.
Anything in this Section 11 to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Corporation in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of Preferred Stock at less than the current
market price, (iii) issuance wholly for cash of Preferred Stock or securities
that by their terms are convertible into or exchangeable for Preferred Stock,
(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
Preferred Stock shall not be taxable to such holders.
<PAGE>
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 that does not violate Section
11.14 hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Corporation in a transaction that does not violate Section 11.14 hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Corporation and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Corporation and/or any of its Subsidiaries in one or more transactions each
of which does not violate Section 11.14 hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer, there are any
charter or bylaw provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect or other actions taken that 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, sale or transfer, the shareholders of the Person who
constitutes, or would constitute, the 'Principal Party' for purposes of Section
13.1 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
11.13.
The Corporation covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 25.2 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.
The exercise of Rights under Section 11.1.2 shall only result in the loss
of rights under Section 11.1.2 to the extent so exercised and shall not
otherwise affect the rights represented by the Rights under this Agreement,
including the rights represented by Section 13.
Certificate of Adjusted Purchase Price or Number of Shares.
<PAGE>
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Corporation shall promptly (a) prepare a certificate setting forth
such adjustment and a brief, reasonably detailed statement of the facts,
computations and methodology accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock and the Preferred
Stock a copy of such certificate and (c) if such adjustment is made after the
Distribution Date, mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25.1 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall have no duty with respect to, and shall not be deemed to
have knowledge of, such adjustment unless and until it shall have received such
certificate.
Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
<PAGE>
In the event that, on or following the Shares Acquisition Date, directly or
indirectly, (x) the Corporation shall consolidate with, or merge with and into,
any Interested Stockholder or, if in such merger or consolidation all holders of
shares of Common Stock are not treated alike, any other Person, (y) the
Corporation shall consolidate with, or merge with, any Interested Stockholder
or, if in such merger or consolidation all holders of shares of Common Stock are
not treated alike, any other Person, and the Corporation shall be the continuing
or surviving corporation of such consolidation or merger (other than, in a case
of any transaction described in (x) or (y), a merger or consolidation that would
result in all of the securities generally entitled to vote in the election of
directors of the Corporation ('voting securities') 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 voting surviving entity outstanding immediately after
such merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the Corporation
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Corporation and its Subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders or, if in such transaction all holders of Common
Stock are not treated alike, any other Person (other than the Corporation or any
Subsidiary of the Corporation in one or more transactions each of which does not
violate Section 11.14 hereof), then, and in each such case (except as provided
in Section 13.4 hereof), proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 7.6 hereof, shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement and in lieu of
Preferred Stock, such number of freely tradable shares of Common Stock of the
Principal Party, not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one tenth (1/10th) of a share
of Preferred Stock for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 11.1.2) and dividing
that product by (B) 50% of the then current per share market price of the Common
Stock of such Principal Party (determined pursuant to Section 11.4 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 shares of Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
<PAGE>
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of Common Stock thereafter deliverable upon the exercise of the Rights.
'Principal Party' shall mean:
in the case of any transaction described in clause (x) or (y) of the first
sentence of Section 13.1, the Person that is the issuer of any securities into
which shares of Common Stock 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
in the case of any transaction described in clause (z) of the first
sentence of Section 13.1, 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
Stock of such Person is not at such time and has 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
shares of Common Stock 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 shares of
Common Stock 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
Stock 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.
<PAGE>
The Corporation shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of its
authorized shares of Common Stock that 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 Sections 13.1 and 13.2 and further
providing that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in Section 13.1, the Principal Party at its
own expense shall:
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 will 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;
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
deliver to holders of the Rights historical financial statements for the
Principal Party that 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 11.1.2 and shall survive any exercise thereof.
<PAGE>
Notwithstanding anything in this Agreement to the contrary, the foregoing
provisions of this Section 13 shall not be applicable to a transaction described
in clauses (x) and (y) of Section 13.1 if: (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant to a
Permitted Offer (or a wholly owned Subsidiary of any such Person or Persons);
(ii) the price per share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of shares of Common
Stock 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 13.4, all Rights hereunder shall
expire.
Fractional Rights and Fractional Shares.
The Corporation shall not be required to issue fractions of Rights or to
distribute Right Certificates that 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 14.1, the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Corporation. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Corporation shall be used.
<PAGE>
The Corporation shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are one tenth (1/10th) or integral
multiples of one tenth (1/10th) of a share of Preferred Stock, or such other
fraction determined pursuant to adjustment provisions of Section 11 hereof) upon
exercise of the Rights or to distribute certificates that evidence fractional
shares of Preferred Stock (other than fractions that are one tenth (1/10th), or
integral multiples of one tenth (1/10th) of a share of Preferred Stock or such
other fraction determined pursuant to adjustment provisions of Section 11
hereof). Fractions of shares of Preferred Stock in integral multiples of one
tenth (1/10th) of a share of Preferred Stock may, at the election of the
Corporation, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Corporation and a depositary selected by it; provided that
such agreement shall provide that the holders of such depositary receipts shall
have the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not one tenth
(1/10th) or integral multiples of one tenth (1/10th) of a share of Preferred
Stock, 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 share of Preferred
Stock. For the purposes of this Section 14.2, the current market value of a
share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to Section 11.4.2 hereof) for the Trading Day
immediately prior to the date of such exercise.
Following the occurrence of one of the transactions or events specified in
Section 11 giving rise to the right to receive shares of Common Stock, Capital
Stock Equivalents (other than Preferred Stock) or other securities upon the
exercise of a Right, the Corporation shall not be required to issue fractions of
shares or units of such shares of Common Stock, Capital Stock Equivalents or
other securities upon exercise of the Rights or to distribute certificates that
evidence fractions of such shares of Common Stock, Capital Stock Equivalents or
other securities. In lieu of fractional shares or units of such shares of Common
Stock, Capital Stock Equivalents or other securities, the Corporation may 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 a share or unit of such shares of Common Stock, Capital
Stock Equivalents or other securities. For purposes of this Section 14.3, the
current market value shall be determined in the manner set forth in Section 11.4
hereof for the Trading Day immediately prior to the date of such exercise and,
if such Capital Stock Equivalent is not traded, each such Capital Stock
Equivalent shall have the value of one tenth (1/10th) of a share of Preferred
Stock.
<PAGE>
The holder of a Right by the acceptance of the Right expressly waives
such holder's right to receive any fractional Rights or any fractional share
upon exercise of a Right (except as provided above). The Rights Agent shall not
be deemed to have knowledge of, and shall have no duty in respect of, the
issuance of fractional Rights or fractional shares unless and until it shall
have received instructions from the Corporation concerning the issuance of such
fractional Rights or fractional shares.
Rights of Action.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under this Agreement are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of shares of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of shares of the Common Stock), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or, prior to the Distribution
Date, of shares of the Common Stock), may, in such registered holder's own
behalf and for such registered holder's own benefit, enforce, and may institute
and maintain any suit, action or proceeding against the Corporation to enforce,
or otherwise act in respect of, such registered holder's right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement. Nothing in this
Section 15 is intended to modify or limit the authority of the Board of
Directors under Section 25.3.
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:
<PAGE>
prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the associated shares of Common Stock;
after the Distribution Date, the Right Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the office 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;
subject to Section 6 and Section 7.7 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 Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the associated Common Stock 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 7.6
hereof, shall be required to be affected by any notice to the contrary; and
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, judgment or
ruling (whether interlocutory or final) 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, that the Corporation must use
its best efforts to have any such order, decree, judgment or ruling lifted or
otherwise overturned as soon as practicable.
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 shares of the
Preferred Stock or any other securities of the Corporation that may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
24 hereof), or to receive dividends or other distributions or to exercise any
<PAGE>
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.
<PAGE>
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, preparation, delivery, amendment
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent (which gross
negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
without limitation the costs and expenses of defending against any claim of
liability in respect of any such action. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Corporation. The
indemnity provided for herein shall survive the expiration of the Rights and the
termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be authorized and
protected and shall incur no liability for, or in respect of, any action taken,
suffered or omitted by it in connection with the acceptance and administration
of this Agreement in reliance upon any Right Certificate or certificate for
shares of Common Stock 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 or otherwise upon the
advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not
be deemed to have knowledge of, and shall have no duty in respect of, any fact
contained in such Right Certificate or certificate for shares of Common Stock 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 unless and until it shall have
received the same.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect, punitive incidental 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 the action.
<PAGE>
Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer or all or
substantially all of the shareholder services business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Duties of Rights Agent.
The Rights Agent undertakes those duties and obligations, and only the
duties and obligations, expressly imposed by this Agreement (and no implied
duties or obligations) upon the following terms and conditions, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, by all of which the Corporation and the holders of Right Certificates, by
their acceptance thereof, shall be bound.
Before the Rights Agent acts or refrains from acting, the Rights Agent may
consult with legal counsel (who may be legal counsel for the Corporation), and
the advice or opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent, and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
good faith and in accordance with such advice or opinion.
<PAGE>
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, suffering or omitting 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 and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (which gross negligence, bad faith
or willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction).
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.
The Rights Agent shall not be under any liability or 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 liable or 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 liable or responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7.6 hereof) or any adjustment required under the provisions
of Section 11, Section 13 or Section 26 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 shares of Preferred Stock or shares of Common Stock to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Stock or shares of Common Stock will, when issued, be validly
authorized and issued, fully paid and non-assessable.
<PAGE>
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.
The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Corporation, and to apply to
such officers for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection of the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted 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. The Rights Agent shall incur no liability for or in respect
of its reliance upon the most recent instructions received by any such officer.
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 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 or
suffered 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 (5) 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, suffered or omitted.
The Rights Agent and any shareholder, Affiliate, 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
Person or legal entity.
<PAGE>
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, negligence or misconduct of any such attorneys
or agents or for any loss to the Corporation or any other Person resulting from
any such act, default, negligence or misconduct, absent gross negligence, bad
faith or willful misconduct as determined by a court of competent jurisdiction,
in the selection and continued employment thereof.
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
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
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 or transfer without first consulting with the Corporation.
The Rights Agent shall not be required to take notice or be deemed to have
notice of any fact, event or determination (including, without limitation, any
dates or events defined in this Agreement or the designee of a Person as an
Acquiring Person, Affiliate or Associate), under this Agreement unless and until
the Rights Agent shall be specifically notified in writing by the Corporation of
such fact, event or determination.
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 each transfer agent of the Common Stock or Preferred
Stock by registered or certified mail, and, at the expense of the Corporation,
to the holders of the Right Certificates by first-class mail. The Corporation
may remove the Rights Agent or any successor Rights Agent upon sixty (60) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock or Preferred Stock
by registered or certified mail, and to holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor
to the Rights Agent. If the Corporation shall fail to make such appointment
within a period of sixty (60) days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
<PAGE>
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 (i) a Person organized and doing business under the laws of the
United States or of any of the States of New York, New Jersey or California (or
of any other state of the United States so long as such Person is authorized to
do business in any of the States of New York, New Jersey or California), in good
standing, having an office in any of such States, which is subject to
supervision or examination by federal or state authority and which (or the
parent corporation of which) has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (ii) an affiliate of
such a Person. 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. 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. Not
later than the effective date of any such appointment, the Corporation shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock or Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
<PAGE>
Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
In connection with the issuance or sale of Common Stock following the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Corporation (a) shall with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Corporation, and (b) may in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Corporation, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) the
Corporation shall not be obligated to issue any such Right Certificates if, and
to the extent that, the Corporation shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Corporation or the Person to whom such Right Certificate would be issued,
and (ii) no Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Redemption and Termination.
Redemption
The Board of Directors of the Corporation may, at its option, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$.001 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 the occurrence of a Section 11.1.2
Event or the Final Expiration Date. The Corporation may, at its option, pay the
Redemption Price either in shares of Common Stock (based on the current per
share market price of the Common Stock at the time of redemption) or cash;
provided that if the Corporation elects to pay the Redemption Price in shares of
Common Stock, the Corporation shall not be required to issue any fractional
shares of Common Stock and the number of shares of Common Stock issuable to each
holder of Rights shall be rounded down to the next whole share.
<PAGE>
In addition, the Board of Directors of the Corporation may, at its option,
at any time following the occurrence of a Section 11.1.2 Event and the
expiration of any period during which the holder of Rights may exercise the
Rights under Section 11.1.2 but prior to any Section 13 Event redeem all but not
less than all of the then outstanding Rights at the Redemption Price (x) in
connection with any merger, consolidation or sale or other transfer (in one
transaction or in a series of related transactions) of assets or earning power
aggregating 50% or more of the earning power of the Corporation and its
Subsidiaries (taken as a whole) in which all holders of shares of Common Stock
are treated alike and not involving (other than as a holder of shares of Common
Stock being treated like all other such holders) an Interested Stockholder or
(y) (i) if and for so long as the Acquiring Person is not thereafter the
Beneficial Owner of securities representing 15% or more of the Voting Power, and
(ii) at the time of redemption no other Persons are Acquiring Persons.
In the case of a redemption permitted under Section 23.1.1, immediately
upon the date for redemption set forth in (or determined in the manner specified
in) a resolution of the Board of Directors of the Corporation ordering the
redemption of the Rights, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right so
held. In the case of a redemption permitted only under Section 23.1.2, the right
to exercise the Rights will terminate and represent only the right to receive
the Redemption Price upon the later of ten (10) Business Days following the
giving of such notice or the expiration of any period during which the Rights
may be exercised under Section 11.1.2. The Corporation shall promptly give
public notice of any such redemption; with prompt notice thereof to the Rights
Agent provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within ten (10) days
after such date for redemption set forth in a resolution of the Board of
Directors of the Corporation ordering the redemption of the Rights, the
Corporation shall mail a notice of redemption to the Rights Agent and all the
holders of the then outstanding Rights at (in the case of notice to holders)
their addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of redemption 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 as specifically set forth in this Section 23 and other than in
connection with the purchase of shares of Common Stock prior to the Distribution
Date.
<PAGE>
The Corporation may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
addresses as they appear on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent of the Common
Stock, and upon such action, all outstanding Rights and Right Certificates shall
be null and void without any further action by the Corporation.
Notice of Certain Events.
In case the Corporation shall propose after the Distribution Date (i) to
pay any dividend payable in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of its Preferred Stock
(other than a regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Stock rights or warrants to subscribe for or to purchase any
additional Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding Preferred Stock), (iv) to effect 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 11.14 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 11.14 hereof), or (v) to effect the liquidation, dissolution or winding
up of the Corporation, then, in each such case, the Corporation shall give the
Rights Agent and to each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action which shall specify the
record date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 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 Preferred Stock, whichever shall be
the earlier.
<PAGE>
In case of a Section 11.1.2 Event, then (i) the Corporation shall as soon
as practicable thereafter give to each holder of a Right Certificate, in
accordance with Section 25.1.3 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 11.1.2 hereof, and (ii) all references in the
preceding Section 24.1 to Preferred Stock shall be deemed thereafter to refer
also to shares of Common Stock and/or, if appropriate, other securities of the
Corporation.
Miscellaneous.
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 registered or certified mail and
shall be deemed given upon receipt, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Advanced Technical Products, Inc.
200 Mansell Court, East Suite 505
Roswell, Georgia 30076
Attention: Corporate Secretary
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 registered or certified mail and shall be deemed given upon receipt,
postage prepaid, addressed (until another address is filed in writing with the
Corporation) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Client Administration
<PAGE>
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
shares of Common Stock 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.
Supplements and Amendments.
The Corporation may from time to time supplement or amend any provision of
this Agreement without the approval of any holders of Rights in order to cure
any ambiguity, to correct, supplement or amend any provision herein, or to make
any other provision with respect to the Rights which the Corporation may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Corporation and the Rights Agent; provided, however, that
from and after any Shares Acquisition Date this Agreement shall not be amended
in any manner which will adversely affect the interests of 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 25.2, and, if requested by the Rights
Agent, an opinion of counsel, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of shares of
Common Stock. This Agreement shall not be amended, without the prior written
consent of the Rights Agent, in any manner that changes or increases the duties,
liabilities or obligations of the Rights Agent.
<PAGE>
Determination and Actions by the Board of Directors, etc. The Board of Directors
of the Corporation shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board, or the Corporation, or as may be necessary or advisable in the
administration of this Agreement, including without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock or other securities outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock or any other securities of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement. All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Corporation, the Rights Agent,
the holders of the Right Certificates and all other Persons, and (y) not subject
the Board to any liability to the holders of the Right Certificates. The Rights
Agent shall be fully protected and shall incur no liability for or in respect of
its reliance on the good faith of the Corporation's Board of Directors with
respect to actions done or made in connection with such calculation. Nothing in
Section 15 hereof is intended to modify or limit this Section 25.3.
Successors.
All the covenants and provisions of this Agreement by or for the benefit of the
Corporation or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
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
shares of Common Stock) any legal or equitable right, remedy or claim under this
Agreement. 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 shares of Common Stock).
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.
<PAGE>
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.
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.
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.
Exchange.
Notwithstanding any other provision hereof, the Board of Directors of the
Corporation may, at its option, at any time after 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 null and void pursuant
to the provisions of Section 7.6 hereof) for shares of Common Stock of the
Corporation at an exchange ratio determined by dividing the then-applicable
exercise price of the Rights determined under Section 7.2 by the 'current per
share market price' as defined in Section 11.4.1 (such exchange ratio being
hereinafter referred to as the 'Exchange Ratio'). Notwithstanding the foregoing,
the Corporation's 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, or any Person organized, appointed or established by the
Corporation 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 shares representing
50% or more of the Voting Power.
<PAGE>
Immediately upon the action of the Board of Directors of the Corporation
ordering the exchange of any Rights pursuant to Section 26.1 and without any
further action and without any notice, the right to exercise such rights shall
terminate and the only right thereafter of the holder of such Rights (other than
a holder of Rights that have become null and void pursuant to the provisions of
Section 7.6 hereof) shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice, and shall
promptly give notice to the Rights Agent, of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The 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 shall state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 7.6) held by each holder of Rights.
In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 26, the Corporation shall
take all such action as may be necessary to issue additional shares of Common
Stock, Preferred Stock and/or Capital Stock Equivalents with an aggregate
current market value (as determined by the Board of Directors of the
Corporation) equal to the aggregate current market value of a number of shares
of Common Stock equal to the Exchange Ratio.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
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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.
ADVANCED TECHNICAL PRODUCTS, INC.
Attest: By: /s/ Garrett L. Dominy
Name: Garrett L.Dominy
Title:Executive Vice President
and Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY as Rights Agent
By: /s/ Herbert Lemmer
Name: Herbert Lemmer
Title: Senior Vice President
<PAGE>
Exhibit A
Form of
Certificate of Designation, Preferences and
Rights of Series RP Preferred Stock
of
Advanced Technical Products, Inc.
(Pursuant to Section 151 of the Delaware General Corporation Law)
I, Garrett L. Dominy, Executive Vice President and Chief Financial Officer
of Advanced Technical Products, Inc. (the 'Corporation'), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of the
Corporation by the Restated Certificate of Incorporation of the Corporation, the
said Board of Directors on March 3, 2000 has adopted the following resolutions
creating a series of 600,000 shares of Preferred Stock designated as Series RP
Preferred Stock.
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of the Corporation in accordance with the provisions of the
Restated Certificate of Incorporation of the Corporation, the Board of Directors
hereby creates a series of Series RP Preferred Stock, with a par value of $1.00
per share, of the Corporation and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitations thereof as
follows (the following provisions being intended to operate in addition to any
other provisions of said Restated Certificate of Incorporation applicable to any
series of Preferred Stock):
Series RP Preferred Stock
Section 1. Designation, Par Value and Amount. The shares of such series
shall be designated as 'Series RP Preferred Stock' (hereinafter referred to as
'Series RP Preferred Stock'), the shares of such series shall be with par value
of $1.00 per share, and the number of shares constituting such series shall be
600,000; provided, however, that, if more than a total of 600,000 shares of
Series RP Preferred Stock shall be issuable upon the exercise of Rights (the
'Rights') issued pursuant to the Rights Agreement, dated as of March 3, 2000,
between the Corporation and American Stock Transfer & Trust Company, as Rights
Agent (as amended from time to time, the 'Rights Agreement'), the Board of
Directors of the Corporation shall direct by resolution or resolutions that a
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certificate be properly executed, acknowledged and filed providing for the total
number of shares of Series RP Preferred Stock authorized to be issued to be
increased (to the extent that the Restated Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of the Rights.
Section 2. Dividends and Distributions.
2.1 Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares of
Series RP Preferred Stock with respect to dividends, the holders of shares of
Series RP Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of assets legally available for the purpose,
quarterly dividends payable in cash on the first business day of March, June,
September and December in each year (each such date being referred to herein as
a 'Quarterly Dividend Payment Date'), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series RP Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
set forth in Section 6.1, ten (10) times the aggregate per share amount of all
cash dividends, and ten (10) times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock, par value $.01 per share, of the Corporation
(the 'Common Stock') or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series RP Preferred Stock.
2.2 The Corporation shall declare a dividend or distribution on the Series
RP Preferred Stock as provided in Section 2.1 above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series RP Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
2.3 Dividends shall begin to accrue and be cumulative on outstanding shares
of Series RP Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series RP Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series RP Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
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from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series RP Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series RP Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series RP Preferred
Stock shall have the following voting rights:
3.1 Except as provided in Section 3.3 and subject to the provision for
adjustment hereinafter set forth, each share of Series RP Preferred Stock shall
entitle the holder thereof to ten (10) votes on all matters submitted to a vote
of the stockholders of the Corporation.
3.2 Except as otherwise provided herein or by law, the holders of shares of
Series RP Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
3.3 The following additional provisions shall apply with respect to the
voting of shares of Series RP Preferred Stock:
3.3.1 If, on the date used to determine stockholders of record for any
meeting of stockholders for the election of directors, a default in preference
dividends (as defined in Section 3.3.5 below) on the Series RP Preferred Stock
shall exist, the holders of the Series RP Preferred Stock shall have the right,
voting as a class as described in Section 3.3.2 below, to elect two directors
(in addition to the directors elected by holders of Common Stock of the
Corporation). Such right may be exercised (a) at any meeting of stockholders for
the election of directors or (b) at a meeting of the holders of shares of Voting
Preferred Stock (as hereinafter defined), called for the purpose in accordance
with the Bylaws of the Corporation, until all such cumulative dividends
(referred to above) shall have been paid in full or until non-cumulative
dividends have been paid regularly for at least one year.
3.3.2 The right of the holders of Series RP Preferred Stock to elect two
directors, as described above, shall be exercised as a class concurrently with
the rights of holders of any other series of Preferred Stock upon which voting
rights to elect such directors have been conferred and are then exercisable. The
Series RP Preferred Stock and any additional series of Preferred Stock that the
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Corporation may issue and that may provide for the right to vote with the
foregoing series of Preferred Stock are collectively referred to herein as
'Voting Preferred Stock.'
3.3.3 Each director elected by the holders of shares of Voting Preferred
Stock shall be referred to herein as a 'Preferred Director.' A Preferred
Director shall continue to serve as such for a term of one year, except that
upon any termination of the right of all holders of Voting Preferred Stock to
vote as a class for Preferred Directors, the term of office of Preferred
Directors then serving shall terminate. Any Preferred Director may be removed
by, and shall not be removed except by, the vote of the holders of record of a
majority of the outstanding shares of Voting Preferred Stock then entitled to
vote for the election of directors, present (in person or by proxy) and voting
together as a single class (a) at a meeting of the stockholders, or (b) at a
meeting of the holders of shares of such Voting Preferred Stock, called for the
purpose in accordance with the Bylaws of the Corporation.
3.3.4 So long as a default in any preference dividends of the Series RP
Preferred Stock shall exist or the holders of any other series of Voting
Preferred Stock shall be entitled to elect Preferred Directors, (a) any vacancy
in the office of a Preferred Director may be filled (except as provided in the
following clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote or
written consent of the holders of a majority of the outstanding shares of Voting
Preferred Stock then entitled to vote for the election of directors, present (in
person or by proxy) and voting together as a single class, at such time as the
removal shall be effected. Each director appointed as aforesaid by the remaining
Preferred Director shall be deemed, for all purposes hereof, to be a Preferred
Director. Whenever (x) no default in preference dividends on the Series RP
Preferred Stock shall exist and (y) the holders of other series of Voting
Preferred Stock shall no longer be entitled to elect such Preferred Directors,
then the number of directors constituting the Board of Directors of the
Corporation shall be reduced by two.
3.3.5 For purposes hereof, a 'default in preference dividends' on the
Series RP Preferred Stock shall be deemed to have occurred whenever the amount
of cumulative and unpaid dividends on the Series RP Preferred Stock shall be
equivalent to six full quarterly dividends or more (whether or not consecutive),
and, having so occurred, such default shall be deemed to exist thereafter until,
but only until, all cumulative dividends on all shares of the Series RP
Preferred Stock then outstanding shall have been paid through the last Quarterly
Dividend Payment Date or until, but only until, non-cumulative dividends have
been paid regularly for at least one year.
3.4 Except as set forth herein (or as otherwise required by applicable
law), holders of Series RP Preferred Stock shall have no general or special
voting rights and their consent shall not be required for taking any corporate
action.
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Section 4. Certain Restrictions.
4.1 Whenever quarterly dividends or other dividends or distributions
payable on the Series RP Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series RP Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
4.1.1 declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series RP Preferred Stock;
4.1.2 declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series RP Preferred Stock, except dividends
paid ratably on the Series RP Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
4.1.3 redeem or purchase or otherwise acquire for consideration (except as
provided in Section 4.1.4 below) shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series RP
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series RP Preferred Stock;
4.1.4 redeem or purchase or otherwise acquire for consideration any shares
of Series RP Preferred Stock, or any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
RP Preferred Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
4.2 The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Section 4.1, purchase or
otherwise acquire such shares at such time and in such manner.
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Section 5. Reacquired Shares. Any shares of Series RP Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of Amendment creating a
series of Preferred Stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
6.1 Subject to the prior and superior rights of holders of any shares of
any series of Preferred Stock ranking prior and superior to the shares of Series
RP Preferred Stock with respect to rights upon liquidation, dissolution or
winding up (voluntary or otherwise), no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series RP Preferred Stock unless,
prior thereto, the holders of shares of Series RP Preferred Stock shall have
received per share an amount equal to the greater of 10 times $38.00 or 10 times
the payment made per share of Common Stock, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment (the 'Series RP Liquidation Preference'). Following the payment
of the full amount of the Series RP Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series RP Preferred
Stock unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the 'Capital Adjustment') equal to the quotient
obtained by dividing (i) the Series RP Liquidation Preference by (ii)10 (as
appropriately adjusted as set forth in Section 6.3 to reflect such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii) being hereafter referred to as the
'Adjustment Number'). Following the payment of the full amount of the Series RP
Liquidation Preference and the Capital Adjustment in respect of all outstanding
shares of Series RP Preferred Stock and Common Stock, respectively, holders of
Series RP Preferred Stock and holders of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
6.2 In the event, however, that there are not sufficient assets available
to permit payment in full of the Series RP Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series RP Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of Series RP Preferred Stock and the
holders of such parity shares in proportion to their respective liquidation
<PAGE>
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Capital Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
6.3 In the event the Corporation shall (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior
to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series RP Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number (as appropriately
adjusted as set forth in Section 6.3 to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged.
Section 8. No Redemption. The shares of Series RP Preferred Stock shall not
be redeemable.
Section 9. Ranking. The Series RP Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such other series shall
provide otherwise.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner that would materially
alter or change the powers, preferences or special rights of the Series RP
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series RP
Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series RP Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series RP Preferred Stock.
RESOLVED, that the proper officers of the Corporation be, and each of them
hereby is, authorized to execute a Certificate of Designation with respect to
<PAGE>
the Series RP Preferred Stock pursuant to Section 151 of the General Corporation
Law of the State of Delaware and to take all appropriate action to cause such
Certificate to become effective, including, but not limited to, the filing and
recording of such Certificate with and/or by the Secretary of State of the State
of Delaware.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, I have executed and subscribed to this Certificate and
do affirm the foregoing as true under penalty of perjury this 3rd day of March,
2000.
---------------------------------
Garrett L. Dominy
Executive Vice President and
Chief Financial Officer
<PAGE>
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Exhibit B
Form of Right Certificate
Certificate No. RP- _____ Rights
NOT EXERCISABLE AFTER MARCH 3, 2010 OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
ADVANCED TECHNICAL PRODUCTS, INC.
This certifies that __________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of March 10, 2000 (the 'Rights Agreement'), between Advanced
Technical Products, Inc., a Delaware corporation (the 'Corporation'), and
American Stock Transfer & Trust Company, a New York corporation (the 'Rights
Agent'), to purchase from the Corporation at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
Eastern time, on March 9, 2010 unless the Rights evidenced hereby shall have
been previously redeemed by the Corporation, at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent,
one tenth (1/10th) of a fully paid non-assessable share of Series RP Preferred
Stock (the 'Preferred Stock') of the Corporation, at a purchase price of $38.00
per one tenth (1/10th) of a share of Preferred Stock (the 'Purchase Price'),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one tenth (1/10th) of a share of Preferred Stock
that may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of March 3, 2000,
based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11.1.2 Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of 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 an 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 (or from
any Affiliate or Associate thereof) 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 that the Board of Directors of the Corporation has
determined is part of a plan, arrangement or understanding that has as a primary
<PAGE>
purpose or effect the avoidance of Section 7.6 of the Rights Agreement, 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.
As provided in the Rights Agreement, the Purchase Price and the number of
one tenth (1/10th) of a share of Preferred Stock or other securities that may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Corporation and the office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock or other securities as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Corporation at a redemption price of
$.001 per Right (subject to adjustment as provided in the Rights Agreement)
payable in cash.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions that are one tenth
(1/10th) or integral multiples of one tenth (1/10th) of a share of Preferred
Stock, or such other fraction as provided for by the adjustment provisions in
the Rights Agreement, which may, at the election of the Corporation, be
evidenced by depository receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of the Preferred
Stock or of any other securities of the Corporation that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
<PAGE>
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal. Dated as of __________, _____.
[SEAL]
ATTEST:
ADVANCED TECHNICAL PRODUCTS, INC.
By ___________________________ By _______________________________
Name _________________________ Name _____________________________
Title ________________________ Title ____________________________
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By ___________________________
Name ___________________________
Title ___________________________
<PAGE>
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED _____________________________________________________
hereby sells, assigns and transfers unto ____________________________________
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(Please print name and address of transferee)
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this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney-in-Fact,
to transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: __________, _____ _________________________________
Signature
Signature Guaranteed:
________________________
Signatures must be guaranteed by an 'Eligible Guarantor Institution' as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means, in
general, banks, stock brokers, savings and loan associations, and credit unions,
in each case with membership in an approved signature guarantee medallion
program).
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), (2) this Right Certificate
is not being sold, assigned or transferred to or on behalf of any such Acquiring
Person, Affiliate or Associate, and (3) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
______________________________________
Signature
<PAGE>
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Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by the Right Certificate)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock,
shares of Common Stock or other securities issuable upon the exercise of such
Rights and requests that certificates for such shares of Preferred Stock, shares
of Common Stock or other securities be issued in the name of:
Please insert social security number
or other identifying number __________________________________________________
______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security number
or other identifying number _________________________________________________
_______________________________________________________________________________
(Please print name and address)
Dated: __________, _____
__________________________________
Signature
Signature Guaranteed:
_______________________________
Signatures must be guaranteed by an 'Eligible Guarantor Institution' as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means, in
general, banks, stock brokers, savings and loan associations, and credit unions,
in each case with membership in an approved signature guarantee medallion
program).
<PAGE>
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Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), (2) this Right Certificate is not being sold,
assigned or transferred by or on behalf of any such Acquiring Person, Affiliate
or Associate, and (3) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
_________________________________
Signature
Notice
The signature on the foregoing Forms of Assignment and Election and
certificates must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Corporation and the Rights Agent will deem the Beneficial Owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Right Agreement) and such
Assignment or Election to Purchase will not be honored.
<PAGE>
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Exhibit C
ADVANCED TECHNICAL PRODUCTS, INC.
200 Mansell Court East
Suite 505
Roswell, GA 30076
FORM OF
SUMMARY OF RIGHTS TO PURCHASE
SERIES RP PREFERRED SHARES
The Board of Directors (the 'Board') of Advanced Technical Products, Inc.
(the 'Corporation') has declared a dividend distribution of one preferred share
purchase right (a 'Right') for each outstanding share of Common Stock (the
'Common Stock') of the Corporation. The dividend is payable to the stockholders
of record on March 10, 2000 (the 'Record Date'), and with respect to shares of
Common Stock issued thereafter until the Distribution Date (as defined below)
and, in certain circumstances, with respect to shares of Common Stock 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 tenth (1/10th) of a share of Series RP Preferred Stock, $1.00
par value per share (the 'Preferred Stock'), of the Corporation at a price of
$38.00 per one tenth (1/10th) of a share of Preferred Stock (the 'Purchase
Price'), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the 'Rights Agreement') between the Corporation and
American Stock Transfer & Trust Company, as Rights Agent (the 'Rights Agent'),
dated as of March 3, 2000.
Initially, the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate certificates
representing the Rights ('Right Certificates') will be distributed. The Rights
will separate from the Common Stock upon the earliest to occur of (i) a person
or group of affiliated or associated persons having acquired, without the prior
approval of the Corporation's Board of Directors, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (except pursuant to a Permitted
Offer, as hereinafter defined) or (ii) 10 days (or such later date as the Board
may determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result in
a person or group of affiliated or associated persons becoming an Acquiring
Person (as hereinafter defined) (the 'Distribution Date'). A person or group
whose acquisitions of shares of Common Stock cause a Distribution Date pursuant
to clause (i) above is an 'Acquiring Person,' with certain exceptions as set
forth in the Rights Agreement. The date that a person or group is first publicly
announced to have become such by the Corporation or such Acquiring Person is the
'Shares Acquisition Date.'
The Rights Agreement provides that neither The Veritas Capital Fund, L.P.
nor any of its affiliates shall be an Acquiring Person solely by reason of being
a party to the January 2000 Agreement and Plan of Merger, dated as of January
28, 2000, by and among the Corporation, ATP Acquisition Corp. and ATP Holding
Corp. or by reason of the existence of such agreement.
<PAGE>
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the associated shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuance of shares of Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, Right Certificates will be mailed to the
holders of record of the shares of Common Stock as of the Close of Business (as
defined in the Rights Agreement) on the Distribution Date (and to each initial
record holder of certain shares of Common Stock 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 March 9, 2010, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding shares of Common
Stock at a price and on terms which a majority of certain members of the Board
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a 'Permitted Offer')), each holder of a
Right will thereafter have the right (the 'Flip-In Right') to receive, upon
exercise, the number of shares of Common Stock (or, in certain circumstances, of
one tenth (1/10th) of a share of Preferred Stock or other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. 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. The Board has the option, at any time after any person
becomes an Acquiring Person, to exchange all or part of the then-exercisable
Rights (excluding those that have become void, as described in the immediately
preceding sentence) for shares of Common Stock, at an exchange ratio determined
by dividing the then-applicable Purchase Price by the then-current market price
per share of Common Stock as determined in accordance with the Rights Agreement.
However, this option generally terminates if any person becomes the beneficial
owner of 50% or more of the shares of Common Stock.
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 shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to (x) an Acquiring Person or any affiliate or associate
thereof or (y) any other person in which such Acquiring Person, affiliate or
associate has an interest or any person acting on behalf of or in concert with
<PAGE>
such Acquiring Person, affiliate or associate, or (z) if, in such transaction,
all holders of shares of Common Stock are not treated alike, any other person,
then each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the 'Flip-Over Right') to
receive, upon exercise, common shares of the acquiring company (or, in certain
circumstances, its parent), having a value equal to two times the exercise price
of the Right. The holder of a Right will continue to have the Flip-Over Right
whether or not such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred Stock,
shares of Common Stock 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 Preferred Stock, (ii) upon the grant to holders of shares of the Preferred
Stock of certain rights or warrants to subscribe for or purchase Preferred Stock
at a price, or securities convertible into Preferred Stock with a conversion
price, less than the then current market price of the Preferred Stock or (iii)
upon the distribution to holders of shares of the Preferred Stock or evidences
of indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one tenth (1/10th) of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but, if greater, will
be entitled to an aggregate dividend per share of 10 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of shares of
the Preferred Stock will be entitled to a minimum preferential liquidation
payment per share in an amount equal to the greater of $38.00 or 10 times the
payment made per share of Common Stock plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment (the 'Series RP Liquidation Preference'); thereafter, and after
the holders of shares of the Common Stock receive a liquidation payment of an
amount equal to the quotient obtained by dividing the Series RP Liquidation
Preference by 10 (subject to certain adjustments for stock splits, stock
dividends and recapitalizations with respect to the Common Stock), the holders
of shares of the Preferred Stock and the holders of the Common Stock will share
the remaining assets in the ratio of 10 to 1 (as adjusted) for each share of
Preferred Stock and Common Stock so held, respectively. Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Preferred Stock will be entitled to receive 10
times the amount received per share of Common Stock. These rights are protected
by customary anti-dilution provisions. In the event that the amount of accrued
and unpaid dividends on the Preferred Stock is equivalent to six full quarterly
dividends or more, the holders of shares of the Preferred Stock shall have the
right, voting as a class, to elect two directors in addition to the directors
elected by the holders of shares of the Common Stock until all cumulative
dividends on the Preferred Stock have been paid or set apart for payment through
<PAGE>
the last quarterly dividend payment date. No fractional shares of Preferred
Stock will be issued (other than fractions which are one tenth (1/10th), or
integral multiples of one tenth (1/10th) of a share of Preferred Stock, which
may, at the election of the Corporation, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading day prior to the date of
exercise.
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.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price (payable in cash or, at the Corporation's election, in Common Stock)
of $.001 per Right (the 'Redemption Price'), which redemption shall be effective
upon the action of the Board. Additionally, following the Shares Acquisition
Date, the Corporation may redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price, provided that such redemption is in connection
with a merger or other business combination transaction or series of
transactions involving the Corporation in which all holders of shares of Common
Stock are treated alike but not involving an Acquiring Person or its affiliates
or associates.
Other than those provisions relating to the rights, duties and obligations
of the Rights Agent, all of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Corporation prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board of Directors of the Corporation in order to cure any
ambiguity, defect or inconsistency, to make changes that 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.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Corporation.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
<PAGE>
1. Certain Definitions....................................................1
2. Appointment Of Rights Agent............................................7
3. Issuance Of Right Certificates.........................................7
4. Form Of Right Certificate........................................... 10
5. Countersignature And Registration.....................................12
6. Transfer, Split-Up, Combination And Exchange Of Right Certificates;
Mutilated, Destroyed,Lost Or Stolen Right
Certificates..........................................................12
7. Exercise Of Rights; Purchase Price; Expiration Date Of Rights.........13
8. Cancellation And Destruction Of Right Certificates....................16
9. Reservation And Availability Of Preferred Stock.......................17
10. Preferred Stock Record Date...........................................18
11. Adjustment Of Purchase Price, Number And Kind Of Shares Or
Number Of Rights......................................................19
12. Certificate Of Adjusted Purchase Price Or Number Of Shares............29
13. Consolidation, Merger Or Sale Or Transfer Of Assets Or Earning Power..30
14. Fractional Rights And Fractional Shares...............................34
15. Rights Of Action......................................................36
16. Agreement Of Right Holders............................................36
17. Right Certificate Holder Not Deemed A Stockholder.....................37
18. Concerning The Rights Agent...........................................39
19. Merger Or Consolidation Or Change Of Name Of Rights Agent.............40
20. Duties Of Rights Agent................................................40
<PAGE>
21. Change Of Rights Agent................................................43
22. Issuance Of New Right Certificates....................................45
23. Redemption And Termination............................................45
24. Notice Of Certain Events..............................................47
25. Miscellaneous.........................................................48
26. Exchange..............................................................52
<PAGE>
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Exhibit 99.1
<PAGE>
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ATP Announces New President of Alcore Subsidiary; Anticipates Adjustment of
1999 Operating Results and Adopts Stockholder Rights Plan
ROSWELL, Ga., March 3 /PRNewswire/ -- Advanced Technical Products, Inc.
(Nasdaq: ATPX - news), today announced that effective March 1, 2000, the
President and Chief Financial Officer of its Alcore subsidiary were terminated.
Alan Baldwin, an ATP Board member and the previous CEO and Chairman of the Board
of Lunn Industries, Inc., has been named as the new President of Alcore.
The Company also announced that as a result of its ongoing review of the
books and records of its Alcore subsidiary, the Company anticipates recording
material adjustments to its operating results that could eliminate any earnings
reported during the first nine months of 1999. The anticipated adjustments at
Alcore are expected to reflect, among other things, charges for the reversal of
sales previously booked before shipments had been made, reversal of capital
items that were inappropriately recorded and the reduction of the carrying value
of certain inventory. The Company indicated that its investigation is continuing
and final results for 1999 will be reported when the independent auditors
complete their audit.
The Board of Directors of the Company has adopted a Stockholder Rights Plan
to assist ATP's stockholders in realizing fair value and equal treatment in the
event of any attempted unsolicited takeover of the company and to protect the
company and its stockholders against coercive takeover tactics.
Under the Stockholder Rights Plan, a dividend of one Preferred Stock
Purchase Right is being declared for each share of common stock outstanding at
the close of business on the record date, March 10, 2000. No separate
certificates evidencing the rights will be issued unless and until they become
exercisable.
The rights generally will not become exercisable until a person or group
acquires 15 percent or more of ATP common stock in a transaction that is not
approved in advance by the Board of Directors. In that event, each right will
entitle the holder, other than the unapproved acquirer and its affiliates, to
acquire, by payment of the then-applicable exercise price, initially $38,
subject to adjustment, shares of ATP common stock with a market value equal to
two times the exercise price. In addition, if the rights were triggered by such
a non-approved attempted acquisition and ATPX were thereafter to be acquired in
a merger in which all stockholders were not treated alike, stockholders with
unexercised rights, other than the unapproved acquirer and its affiliates, would
be entitled to purchase common stock of the acquirer with a value of twice the
exercise price of the rights.
<PAGE>
The company's Board of Directors may redeem the rights for a nominal amount
at any time prior to an event that causes the rights to become exercisable. The
rights will expire on March 9, 2010.
ATP designs, develops and manufactures advanced composite based materials
and products from continuous high strength fibers which optimize structural
performance while minimizing the components' weight. ATP believes it is one of a
very few with the ability to utilize multiple processes, such as, autoclave
lamination, filament winding, resin transfer molding and metal bonding. Using
these processes, the Company manufactures products for the aerospace and defense
markets, as well as for commercial applications including oil and gas tubulars
and fuel tanks for Natural Gas Vehicles. The Company is also a leader in the
development and production of chemical defense systems.
This press release includes forward-looking statements regarding the
present intentions and expectations of management of ATP. Certain factors beyond
ATP's control could cause results to differ materially from those in these
forward-looking statements. Among these risk factors are the possibility that
the sale of Advanced Technical Products may not close due to the failure to
satisfy certain conditions including the satisfactory completion of certain
regulatory, third party and stockholder approval. Other risk factors include
general market conditions, dependence on the aerospace and defense industries,
the level of military expenditures and competition in the markets for ATP's
products, are more fully described in ATP's Form 10-K and other documents filed
with the Securities and Exchange Commission.
SOURCE: Advanced Technical Products, Inc.
