SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
Form 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
The Manitowoc Company, Inc.
(Exact name of registrant as specified in its charter)
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Wisconsin 39-0448110
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(State of incorporation or organization) (IRS Employer
Identification No.)
500 South 16th Street, Manitowoc, Wisconsin 54220
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Common Stock Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A.(c)(1), please check the following box. [ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A.(c)(2),
please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Item 1. Description of Registrant's Securities To Be Registered.
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On August 5, 1996, the Board of Directors of The Manitowoc
Company, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock, par value $0.01 per
share, of the Company (the "Common Stock"), to shareholders of record
at the close of business on September 19, 1996 (the "Record Date").
The Rights replace similar rights which expire at the close of
business on the Record Date. Except as set forth below, each Right
entitles the registered holder to purchase from the Company one share
of Common Stock at a purchase price of $100 per share, subject to
adjustment (the "Purchase Price"). The Purchase Price shall be paid
in cash. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and
First Chicago Trust Company of New York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding and no separate
Rights Certificates will be distributed. The Rights will separate
from the Common Stock and a "Distribution Date" will occur upon the
earlier of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 20% or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after September 19, 1996 will
contain a legend incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Stock
outstanding will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on September 18, 2006, unless
earlier redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise provided in the Rights Agreement or determined by
the Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
In the event that, among other things (i) the Company is the
surviving corporation in a merger with an Acquiring Person and the
Common Stock is not changed or exchanged, (ii) a Person (other than
the Company and its affiliates) becomes the beneficial owner of more
than 20% of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common Stock at a
price and on terms which a majority of the independent directors of
the Company determines to be fair to, and otherwise in the best
interests of, the shareholders), (iii) an Acquiring Person engages in
one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person,
an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., a reverse stock
split), at any time following the Distribution Date, each holder of a
Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or other business
combination transaction with another person in which the Company is
the surviving corporation, but in which the Common Stock is changed or
exchanged, or (iii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights
held by an Acquiring Person, which will be null and void) shall
thereafter have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise
price of the Right.
The number of Rights per share of Common Stock, the Purchase
Price payable upon their exercise, and the number of shares of Common
Stock or other securities or property issuable pursuant thereto, are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the Common
Stock are granted certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the current market price
of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of debt securities or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares of Common Stock are required to
be issued and, in lieu thereof, an adjustment in cash may be made
based on the market price of the Common Stock on the last trading date
prior to the date of exercise.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to
not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding shares of Common Stock then known to the
Company to be beneficially owned by any person or group of affiliated
or associated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
At any time after any person becomes an Acquiring Person and
prior to the acquisition by such person of 50% or more of the shares
of Common Stock then outstanding, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such
person that will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right, subject to
adjustment. Immediately upon the action of the Board of Directors
ordering an exchange of the Rights, the Rights affected by such order
will no longer be exercisable and thereafter the only right of the
holders of such Rights will be to receive the shares of Common Stock
issuable by the Company in exchange for such Rights.
At any time until the close of business on the tenth business day
following the Stock Acquisition Date (and, under certain
circumstances, with the concurrence of a majority of the Continuing
Directors (as defined below)), the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right, subject to
adjustment. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of
Common Stock in one or more transactions not involving the Company.
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the
date of the Rights Agreement, and any person who is subsequently
elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors, but shall not include an
Acquiring Person, or an affiliate or associate of an Acquiring Person,
or any representative or nominee of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
As of August 5, 1996, there were 11,511,357 shares of Common
Stock outstanding and 4,820,413 shares of Common Stock held in
treasury. Each share of Common Stock outstanding at the close of
business on September 19, 1996 will receive one Right. As long as the
Rights are attached to the Common Stock, the Company will issue one
Right (subject to adjustment) for each share of Common Stock issued
(or delivered from treasury) between the Record Date and the
Distribution Date so that all such shares will have attached Rights.
In addition, following the Distribution Date and prior to the
expiration, exchange or redemption of the Rights, the Company may, if
deemed necessary or appropriate by the Board of Directors, issue
Rights in connection with the issuance or sale of shares of Common
Stock. A total of 11,511,357 shares of Common Stock plus one share
for every share of Common Stock issued in the future has been reserved
for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to
acquire the Company on terms not approved by the Company's Board of
Directors, except pursuant to an offer conditioned on a substantial
number of Rights being acquired. The Rights should not interfere with
any merger or other business combination approved by the Board of
Directors of the Company since the Rights may be redeemed by the
Company at the redemption price at any time until the close of
business on the tenth business day following the Stock Acquisition
Date.
The Rights Agreement, dated as of August 5, 1996, between the
Company and First Chicago Trust Company of New York, as Rights Agent,
specifying the terms of the Rights, the Form of Rights Certificate
(Exhibit A thereto) and the Summary of Rights to Purchase Common Stock
(Exhibit B thereto), are attached hereto as Exhibit 1 and are
incorporated herein by reference. The foregoing description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to such Exhibit.
Item 2. Exhibits.
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1. Rights Agreement, dated as of August 5, 1996,
between The Manitowoc Company, Inc. and First
Chicago Trust Company of New York, which includes
the Form of Rights Certificate as Exhibit A and
the Summary of Rights to Purchase Common Stock as
Exhibit B. Pursuant to the Rights Agreement,
printed Rights Certificates will not be mailed
until after the earlier of (i) the tenth day after
public announcement that a person or group has
acquired beneficial ownership of 20% or more of
the outstanding shares of Common Stock or (ii) the
tenth business day after commencement of a tender
offer or exchange offer, the consummation of which
would result in the beneficial ownership by a
person or group of 20% or more of the outstanding
shares of Common Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: August 5, 1996
THE MANITOWOC COMPANY, INC.
By: /s/ ROBERT R. FRIEDL
------------------------------
Robert R. Friedl
Vice President and Chief
Financial Officer
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO
FORM 8-A CURRENT REPORT
Dated as of August 5, 1996
Exhibit Filed
Number Description of Document Herewith
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1 Rights Agreement, dated as of X
August 5, 1996, between The
Manitowoc Company, Inc. and First
Chicago Trust Company of New York,
which includes the Form of Rights
Certificate as Exhibit A and the
Summary of Rights to Purchase
Common Stock as Exhibit B.
Pursuant to the Rights Agreement,
printed Rights Certificates will
not be mailed until after the
earlier of (i) the tenth day after
public announcement that a person
or group has acquired beneficial
ownership of 20% or more of the
outstanding shares of Common Stock
or (ii) the tenth business day
after commencement of a tender
offer or exchange offer, the
consummation of which would result
in the beneficial ownership by a
person or group of 20% or more of the
outstanding shares of Common Stock.
EXHIBIT 1
THE MANITOWOC COMPANY, INC.
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK
RIGHTS AGENT
Rights Agreement
Dated as of August 5, 1996
TABLE OF CONTENTS
SECTION PAGE
1 Certain Definitions ................................... 1
2 Appointment of Rights Agent............................ 5
3 Issue of Rights Certificates........................... 6
4 Form of Rights Certificates............................ 8
5 Countersignature and Registration...................... 9
6 Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates..................... 9
7 Exercise of Rights; Purchase Price; Expiration
Date of Rights......................................... 10
8 Cancellation and Destruxtion of Rights
Certificates........................................... 12
9 Reservation and Availability of Capital Stock.......... 13
10 Common Stock Record Date............................... 14
11 Adjustment of Purchase Price or Number and Kind of
Shares or Number of Rights............................. 15
12 Certificate of Adjusted Purchase Price or Number
of Shares.............................................. 26
13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power................................ 26
14 Fractional Rights and Fractional Shares................ 29
15 Rights of Action....................................... 30
16 Agreement of Rights Holders............................ 30
17 Rights Certificate Holder Not Deemed a
Shareholder............................................ 31
18 Concerning the Rights Agent............................ 31
19 Merger or Consolidation or Change of Name of
Rights Agent........................................... 32
20 Duties of Rights Agent................................. 33
21 Change of Rights Agent................................. 35
22 Issuance of New Rights Certificates.................... 36
23 Redemption............................................. 36
24 Exchange .............................................. 38
25 Notice of Certain Events............................... 39
26 Notices................................................ 40
27 Supplements and Amendments............................. 40
28 Successors............................................. 41
29 Determinations and Actions by the Board of
Directors.............................................. 41
30 Benefits of this Agreement............................. 41
31 Severability........................................... 42
32 Governing Law.......................................... 42
33 Counterparts........................................... 42
34 Descriptive Headings................................... 42
Exhibit A - Form of Rights Certificate...................... A-1
Exhibit B - Summary of Rights to Purchase Common Stock...... B-1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 5, 1996 (the "Agreement"),
between The Manitowoc Company, Inc., a Wisconsin corporation (the
"Company"), and First Chicago Trust Company of New York, a New York
chartered trust company (the "Rights Agent").
WITNESSETH
WHEREAS, on August 5, 1996 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared
a dividend distribution of one Right for each share of common stock,
par value $.01 per share, of the Company outstanding at the Close of
Business (as such term is hereinafter defined) on September 19, 1996
(the "Record Date"), and has authorized the issuance of one Right for
each share of Common Stock (as such term is hereinafter defined) of
the Company issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date
(as such terms are hereinafter defined), each Right initially
representing the right to purchase one share of Common Stock of the
Company upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the shares of Common Stock then outstanding, but shall
not include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person holding Common Stock
for or pursuant to the terms of any such plan; provided, however, that
a Person (a "Passive Holder") shall not become an Acquiring Person if,
solely as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of Common Stock by the
Company, such Passive Holder, together with all Affiliates and
Associates of such Passive Holder after such repurchase, shall become
the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, unless and until such time as such Passive Holder or any
Affiliate or Associate of such Passive Holder shall become the
Beneficial Owner of any additional shares of Common Stock or any other
Person who is the Beneficial Owner of any shares of Common Stock shall
become an Affiliate or Associate of such Passive Holder, if after
giving effect to such additional shares or the shares beneficially
owned by such other Person, such Passive Holder, together with all
Affiliates and Associates of such Passive Holder, shall be the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding. Notwithstanding the foregoing, if the Board (as such
term is hereinafter defined) determines in good faith that a Person
who would otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would
no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other 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;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of, or with respect
to, acquiring, holding, voting (except pursuant to a revocable
proxy as described in the provision to subparagraph (ii) of this
paragraph (c)), or disposing of any voting securities of the
Company;
provided, however, that nothing in this paragraph (c) shall cause a
person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(d) "Board" means the Board of Directors of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 p.m.,
New York time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., New York time, on the next
succeeding Business Day.
(g) "Common Stock" shall mean the common stock, par value $.01
per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct
the management, of such Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(h) "Continuing Director" shall mean (i) any member of the
Board, while such Person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a nominee or representative of an Acquiring Person or of any such
Affiliate or Associate, and who was a member of the Board prior to the
date of this Agreement, and (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the Board, who
is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a nominee or representative of an Acquiring
Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors then on the Board.
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity and shall
include any successor (by merger or otherwise) of such entity.
(j) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A),(B) or (C) hereof.
(k) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(l) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) or 14(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(m) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of
the voting securities or voting interests is owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(n) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
The following terms shall have the meanings indicated in the
following Sections of this Agreement:
(i) "Act" -- Section 9(c).
(ii) "Adjustment Shares" -- Section 11(a)(ii).
(iii) "Agreement" -- Preamble.
(iv) "Common Stock Equivalents" -- Section 11(a)(iii).
(v) "Company" -- Preamble.
(vi) "Current Market Price" -- Section 11(d).
(vii) "Current Value" -- Section 11(a)(iii).
(viii) "Distribution Date" -- Section 3(a).
(ix) "Equivalent Common Stock" -- Section 11(b).
(x) "Exchange Act" -- Section 1(b).
(xi) "Exchange Ratio" -- Section 24(a).
(xii) "Expiration Date" -- Section 7(a).
(xiii) "Final Expiration Date" -- Section 7(a).
(xiv) "NASDAQ" -- Section 11(d).
(xv) "Passive Holder" -- Section 1(a).
(xvi) "Principal Party" -- Section 13(b).
(xvii) "Purchase Price" -- Sections 4(a), 11(a)(ii) and
13(a).
(xviii) "Record Date" -- Preamble.
(xix) "Redemption Date" -- Section 7(a).
(xx) "Redemption Price" -- Section 23(a).
(xxi) "Rights" -- Preamble.
(xxii) "Rights Agent" -- Preamble.
(xxiii) "Rights Certificates" -- Section 3(a).
(xxiv) "Rights Dividend Declaration Date" -- Preamble.
(xxv) "Section 11(a)(ii) Trigger Date" -- Section
11(a)(iii).
(xxvi) "Spread" -- Section 11(a)(iii).
(xxvii) "Substitution Period" -- Section 11(a)(iii).
(xxviii) "Summary of Rights" -- Section 3(b).
(xxix) "Trading Day" -- Section 11(d).
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-rights agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after
the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date), or (ii) the Close of Business on the
tenth Business Day after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person holding Common Stock for or pursuant to the
terms of any such plan) is first commenced within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act,
if upon consummation thereof such Person would be the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding (the
earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the Common
Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be Rights
Certificates (as such term is hereinafter defined)) and not by
separate Rights Certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class mail, postage prepaid, to each record holder of the Common
Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Sections 11(a) or
11(i) hereof, at the time of distribution of the Rights Certificates
the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Common
Stock, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in
Section 7(a) hereof), the surrender for transfer of any certificates
representing shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or delivered from
the Company's treasury) after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date or, in certain
circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder
hereto to certain Rights as set forth in the Rights Agreement
between The Manitowoc Company, Inc. (the "Company") and First
Chicago Trust Company of New York (the "Rights Agent"), dated as
of August 5, 1996 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of the Company and the Rights
Agent. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under
certain circumstances as set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and the surrender
for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by
such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall
each be substantially in the form set forth in Exhibit A hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange 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 Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of shares of
Common Stock as shall be set forth therein at the price set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable (or other consideration to be made available) upon the
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such (other than a bona fide purchaser for value who has no knowledge
that the transferor was an Acquiring Person or an Associate or
Affiliate of an Acquiring Person) or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer that the Board has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any Vice President or its Treasurer, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the
Rights Certificates issued or to be issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates, the Rights Certificate number, and
the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case
may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder (or former holder in the case of transfer)
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office
or offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for counter-
signature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii), Section 23(a) and Section 24(b) hereof) in whole or in
part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment (in accordance with
subsection (c) of this Section 7) of the aggregate Purchase Price with
respect to the total number of shares of Common Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of
(i) the Close of Business on September 18, 2006 (the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date") (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock pursuant
to the exercise of a Right shall initially be $100, and shall be
subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per share of Common
Stock (or other shares, securities, cash or other assets, as the case
may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9 hereof, in cash, or by certified check or
cashiers check payable to the order of the Company, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon (i) promptly
requisition from any transfer agent of the shares of Common Stock (or
make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of shares of Common Stock to
be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when
appropriate, promptly requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt of
such certificates, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt thereof, promptly deliver such cash, if
any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if
and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such (other than a bona
fide purchaser for value who has no knowledge that the transferor was
an Acquiring Person or an Associate or Affiliate of an Acquiring
Person), or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer that
the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance
of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares
of Common Stock (and, following the occurrence of a Triggering Event,
out of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of shares of Common Stock (and, following the
occurrence of a Triggering Event, other securities) that, as provided
in this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and, following the
occurrence of a Triggering Event, other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable,
all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) If then required by applicable law, the Company shall use
its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Triggering Event as to
which the consideration to be delivered by the Company upon exercise
of the Rights has been determined pursuant to this Agreement, or as
soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933
(the "Act"), with respect to the Common Stock or other 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) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such Common Stock or
other securities and (B) the date of the expiration of the Rights. If
then required by applicable law, the Company will also take such
action as may be appropriate under the securities or "blue sky" laws
of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock
(and, following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable (except as provided by Section
180.0622(2)(b) of the Wisconsin Statutes, as judicially interpreted).
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Rights Certificates and of any certificates for shares of Common
Stock (or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of shares of Common Stock (or other
securities, as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise, or to issue or deliver any certificates for
shares of Common Stock (or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise of any
Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each person in whose
name any certificate for shares of Common Stock (or other securities,
as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such
shares of Common Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Stock (or other
securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock (or other
securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled (in such holder's
capacity as such) to any rights of a shareholder of the Company with
respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote any shares, to
receive dividends or other distributions with respect to any shares or
to exercise any preemptive rights with respect to any shares, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind
of shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding
Common Stock or (C) combine the outstanding Common Stock into a
smaller number of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated (whether before or after the Distribution
Date) with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event. For purposes of the foregoing
sentence, any shares of Common Stock issued after the Distribution
Date that were not issued together with a Right (pursuant to the
Preamble hereto or by action of the Board pursuant to Section 22
hereof) shall be not be counted as outstanding. In the event the
Company shall at any time after the date of this Agreement issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the effective date of such reclassification, and the number
and kind of shares of Common Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of Common Stock or
capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to the Section 11(a)(ii) hereof.
(ii) In the event that:
(A) any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger
or combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall, in one or more
transactions, transfer any assets to the Company or to any of its
Subsidiaries (including, in the case of Subsidiaries, by way of a
merger or consolidation of any such Subsidiary) in exchange (in
whole or in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries, or for securities exercisable
for or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries, or otherwise obtain from
the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or securities
exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries (other
than pursuant to a pro rata distribution to all holders of such
shares of any class of capital stock of the Company or any of its
Subsidiaries), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one or more transactions, to, from, with or of (as the case may
be) the Company or any of its Subsidiaries (including, in the
case of Subsidiaries, by way of a merger or consolidation of any
Subsidiary), assets on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, other than pursuant
to a transaction set forth in Section 13(a) hereof, (4) shall
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of in one or more transactions, to,
from, with or of (as the case may be) the Company or any of the
Company's Subsidiaries (including, in the case of Subsidiaries,
by way of a merger or consolidation of any Subsidiary) (other
than incidental to the lines of business, if any, engaged in as
of the date hereof between the Company and such Acquiring Person
or Associate or Affiliate) assets having an aggregate fair market
value of more than $5,000,000, other than pursuant to a
transaction set forth in Section 13(a) hereof, (5) shall receive
any compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment as
a regular employee at rates in accordance with the Company's (or
its Subsidiaries') past practices, or (6) shall receive the
benefit, directly or indirectly (except proportionately as a
shareholder and except if resulting from a requirement of law or
governmental regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other
tax advantage provided by the Company or any of its Subsidiaries,
or
(B) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person holding Common Stock for
or pursuant to the terms of any such plan), alone or together
with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of
more than 20.0% of the shares of Common Stock then outstanding,
unless the event causing the 20.0% threshold to be crossed is a
transaction set forth in Section 13(a) hereof or is an
acquisition of shares of Common Stock pursuant to a tender offer
or exchange offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority of the
members of the Board who are not officers of the Company, after
receiving advice from one or more investment banking firms, to be
(a) at a price which is fair to shareholders (taking into account
all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its shareholders, and provided
that a Person shall not be deemed to have become the Beneficial
Owner of more than 20.0% of the shares of Common Stock then
outstanding for the purposes of this Section 11(a)(ii)(B) solely
as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of Common Stock by the
Company, unless and until such time as such Person or any
Affiliate or Associate of such Person shall become the Beneficial
Owner of any additional shares of Common Stock or any other
Person who is the Beneficial Owner of any shares of Common Stock
shall become an Affiliate or Associate of such Person, if after
giving effect to such additional shares or the shares
beneficially owned by such other Person, such Person, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 20.0% of the shares of Common Stock
then outstanding, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of Section
13(a) apply (whether or not with or into or otherwise involving
an Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into equity securities
of the Company or any of its Subsidiaries, which is directly or
indirectly beneficially owned by an Acquiring Person or any
Associate or Affiliate of any Acquiring Person,
then, promptly following five (5) days after the date of the
occurrence of an event described in Section 11(a)(ii)(B) hereof and
promptly following the occurrence of any event described in Section
11(a)(ii)(A) or (C) hereof, proper provision shall be made so that
each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of shares of Common Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares being called herein the
"Adjustment Shares"); provided that the Purchase Price and the number
of Adjustment Shares shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's articles of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section
11(a), and subject to such limitations as are necessary to
prevent default under any agreement for money borrowed to which
the Company is a party and to comply with applicable law, the
Company shall: (A) determine the excess of (1) the value (based
on the Current Market Price) of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect
to each Right, make adequate provision to substitute for, or
provide an election to acquire in lieu of, the Adjustment Shares,
upon payment of the applicable Purchase Price (which term shall
include any reduced purchase price), (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board has deemed to have
the same value as shares of Common Stock (such shares or units of
shares of preferred stock, (hereinafter referred to as the
"Common Stock Equivalents"), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board based upon the
advice of a nationally recognized investment banking firm
selected by the Board; provided, however, that if the Company
shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the later
of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board shall determine in good faith
that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of
such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common
Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Common
Stock (or shares having the same rights, privileges and preferences as
the shares of Common Stock ("Equivalent Common Stock")) or securities
convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common
Stock or Equivalent Common Stock) less than the Current Market Price
per share of Common Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or Equivalent Common Stock so to
be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number
of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock and/or Equivalent Common
Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned by or
held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of debt securities
(including evidences of indebtedness), cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of
the Company), assets (other than a dividend payable in Common Stock,
but including any dividend payable in stock other than Common Stock)
or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of the
Common Stock on such record date, less the fair market value (as
determined in good faith by the Board, 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 cash, assets or debt securities so to be distributed or
of such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current Market
Price per share of Common Stock. 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 be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock
for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined
during a period following the announcement by the issuer of such
Common Stock of (A) any dividend or distribution on the Common Stock
(other than a regular quarterly cash dividend and other than the
Rights), or (B) any subdivision, combination or reclassification of
such Common Stock, and prior to the expiration of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
then, and in each such case, the "Current Market Price" shall be
properly adjusted to take into account ex-dividend trading. 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 shares of Common Stock 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 shares of Common Stock are listed or admitted to trading or,
if the shares of Common Stock 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 the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or, if on any such date the shares of Common
Stock 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 Common Stock selected by the Board. If
on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in
good faith by the Board shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange or
NASDAQ on which the shares of Common Stock are listed, traded or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange or NASDAQ, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, except for
the last sentence of this Section 11(e), no adjustment in the Purchase
Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
(other than Common Stock), other securities or property, thereafter
the number of such other shares, securities or property so receivable
upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Common Stock
shall apply on like terms to any such other shares, securities or
property.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number
of shares covered by a Right immediately prior to this adjustment, by
(y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number
of shares of Common Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior
to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share
and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable (to the extent provided in
paragraph 9(d)) such number of shares of Common Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the shares of Common Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares of Common Stock and
other capital stock (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the
Board shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance wholly
for cash of any shares of Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable
for shares of Common Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter
made by the Company to holders of its Common Stock shall not be
taxable to such shareholders.
(n) The Company 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 Company), (ii) merge with or
into any other Person (other than a Subsidiary of the Company), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries), if (x) at the time
of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23,
24, 27 or 31 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights;
provided, however, that the issuance of additional Rights pursuant
hereto, including by action of the Board under Section 22 hereof,
shall not be deemed to violate this Section 11(o).
Section 12. Certificate of Adjusted Purchase or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Common Stock, a
copy of such certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock)
in accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company) shall consolidate with, or merge
with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company),
then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal, redemption or
repurchase or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of shares for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing
that product (which, following the first occurrence of a Section 13
Event, shall be referred as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair market value on
such date of other securities or property of the Principal Party, as
provided for herein); provided that the Purchase Price and the number
of shares of Common Stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of the first
occurrence of a 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 Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock)
in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities for or into which shares of Common
Stock of the Company are exchanged or 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; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (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 Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(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.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any Section 13 Event, the
Principal Party will
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and 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 Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration 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. In the event
that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of
any such Person or Persons) who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding
shares of Common Stock which complies with the provisions of Section
11(a)(ii)(B) hereof, (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 tender offer or exchange offer, and (iii)
the form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(a)(i) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of a
whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed 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. 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 shall be used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In
lieu thereof, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section
14(b), the current market value of one share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant
to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right, by the acceptance of the Rights,
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as otherwise set
forth herein.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain, any
suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered to the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
shares of Common Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsements, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons,
or otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party, or
any corporation succeeding to the corporate trust or stock transfer
business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto; provided, however, that such corporation would
be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "Current Market Price") be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one
of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates (except as to its countersignature on such
Rights 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 Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof),
any adjustment required under the provisions of Sections 3, 11, 13, 23
or 24 hereof, the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized to 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 Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to any such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent, and any shareholder, director, officer or
employee of the Rights Agent, may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct;
provided, however, reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed
to the Company, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by any registered holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder
of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws
of the United States or of any state of the United States, in good
standing, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of a corporation described in
clause (a) of this sentence. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however,
or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved
by the Board 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 Rights Certificates made in accordance
with the provisions of this Agreement. In addition, the Company may,
if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in
connection with the issuance or sale of shares of Common Stock
following the Distribution Date.
Section 23. Redepmtion.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the Close of
Business on the tenth Business Day following the Record Date), or (ii)
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of One Cent ($0.01) per
Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as
the "Redemption Price") and the Company may, at its option, pay the
Redemption Price in shares of Common Stock (based on the Current
Market Price of such Common Stock at the time of redemption);
provided, however, if the Board authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) and (ii) below,
then there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors: (i) such authorization occurs on or after the
time a Person becomes an Acquiring Person, or (ii) such authorization
occurs on or after the date of a change (resulting from a proxy or
consent solicitation) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a participant
in such solicitation has stated (or if, upon the commencement of such
solicitation, a majority of the Board has determined in good faith)
that such Person (or any of its Affiliates or Associates) intends to
take, or may consider taking, any action which would result in such
Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or
Associates) is making a cash tender offer pursuant to Schedule 14D-1
(or any successor form) filed with the Securities and Exchange
Commission for all outstanding shares of Common Stock not beneficially
owned by such Person (or by its Affiliates or Associates). If,
following the occurrence of a Stock Acquisition Date and following the
expiration of the Company's right of redemption set forth in the
preceding sentence but prior to any Triggering Event, (i) each Person
who was an Acquiring Person shall have transferred or otherwise
disposed of a number of shares of Common Stock in one or more
transactions, not directly or indirectly involving the Company, which
did not result in the occurrence of a Triggering Event such that each
such Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, and (ii) there are no other
Persons, immediately following the occurrence of the event described
in clause (i) of this Proviso, who are Acquiring Persons, then the
Company's right of redemption set forth in the preceding sentence
shall be reinstated. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after
the first occurrence of a Section 11(a)(ii) Event until such time as
the Company's right of redemption set forth in the first sentence of
this Section 23(a) has expired.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with
the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of
the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all such holders
at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. 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. The failure to give, or any defect in, any such notice
shall not affect the validity of such redemption.
Section 24. Exchange.
(a) The Board 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 void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any Person
holding shares of Common Stock for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of fifty percent (50%) or more of
the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24
and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
notice to the Rights Agent and public notice of any such exchange;
provided, however, that failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company 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 that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which
the exchange of shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights that
will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder
of Rights.
(c) 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 24, the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates that evidence
fractional shares of Common Stock. In lieu of such fractional shares,
the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For the
purposes of this Section 24(d), (i) the current market value of a
whole shares of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section
11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Common Stock or to make any other distribution
to the holders of Common Stock (other than a regular cash dividend out
of earnings or retained earnings of the Company), or (ii) to offer to
the holders of Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of
any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding shares
of Common Stock), or (iv) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company), 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 more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person
(other than the Company and/or any of its Subsidiaries), or (v) to
effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 26 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 shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the
shares of Common Stock for purposes of such action, and in the case of
any such other action, at least ten (10) days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of the shares of Common Stock, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the occurrence
of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Rights Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as
follows:
The Manitowoc Company, Inc.
Attention: Corporate Secretary
500 South 16th Street
Manitowoc, Wisconsin 54220
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Chicago Trust Company of New York
Attention: Tenders & Exchanges Administration
P. O. Box 2507
Suite 4660
Jersey City, New Jersey 07303-2507
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights
Certificate (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 Company.
Section 27. Supplements and Amendments. The Company may from
time to time supplement or amend this Agreement without the approval
of any holders of Rights in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
change which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from and after
such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. Without limiting the foregoing,
the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) hereof to not less than the greater of
(i) the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known by the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of
the Company, or any Person holding shares of Common Stock for or
pursuant to the terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time,
and any determination of the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner,
shall be made in accordance with the provisions of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in
effect on the date hereof. The Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted
to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to
amend the 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 (with, where specifically provided for herein, the concurrence
of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board or
the Continuing Directors to any liability to the holders of the
Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section
23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth day following the date of such determination by
the Board.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes
shall be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within
such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of
the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
Attest: THE MANITOWOC COMPANY, INC.
/s/ E. Dean Flynn /s/ Fred Butler
_________________________ By ________________________
Name: E. Dean Flynn Name: Fred Butler
Title: Secretary Title: President
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
/s/ James Kuzmich /s/ Michael J. Kane
_________________________ By ________________________
Name: James Kuzmich Name: Michael J. Kane
Title: Operation Officer Title: Assistant Vice President
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 18, 2006 OR EARLIER IF REDEEMED
OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS 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 RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE
OR BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
*The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentence.
Rights Certificate
THE MANITOWOC COMPANY, 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 August
5, 1996 (the "Rights Agreement"), between The Manitowoc Company, Inc.,
a Wisconsin corporation (the "Company"), and First Chicago Trust
Company of New York, a New York chartered trust company (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 p.m. (New York time) on September 18, 2006 at the
office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one fully paid, nonassessable (except
as provided by Section 180.0622(2)(b) of the Wisconsin Statutes, as
judicially interpreted) share of common stock, par value $0.01 per
share, of the Company (the "Common Stock"), at a purchase price of
$100 per share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are such numbers and Purchase Price
as of September 19, 1996, based on the Common Stock as constituted at
such date and are subject to modification and adjustment upon the
happening of certain events as provided in the Rights Agreement.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate (other than a bona fide
purchaser for value who has no knowledge that the transferor was an
Acquiring Person or an Associate or Affiliate of an Acquiring Person),
or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became
an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from
and after the occurrence of any such Triggering Event.
The Board of Directors of the Company may, at its option, at any
time after any person becomes an Acquiring Person and prior to the
acquisition by such person of 50% or more of the shares of Common
Stock then outstanding, exchange all or part of the then outstanding
and exercisable Rights (other than those held by the Acquiring Person
and Affiliates and Associates of the Acquiring Person) for shares of
Common Stock at an exchange ratio of one share of Common Stock per
Right, subject to adjustment. Immediately upon the action of the
Board of Directors of the Company ordering an exchange of the Rights,
the Rights affected by such order will no longer be exercisable and
thereafter the only right of the holders of such Rights will be to
receive the shares of Common Stock issuable by the Company in exchange
for such Rights.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates, which
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 above-mentioned office of the Rights Agent and also
available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If the Rights evidenced by this Rights
Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $0.01 per Right, payable, at the
election of the Company, in cash or shares of Common Stock, at any
time prior to the earlier of the close of business on (i) the tenth
Business Day (as such term is defined in the Rights Agreement)
following the Stock Acquisition Date (as such term is defined in the
Rights Agreement), and (ii) the Final Expiration Date (as such term is
defined in the Rights Agreement). Under certain circumstances set
forth in the Rights Agreement, the decision to redeem shall require
the concurrence of a majority of the Continuing Directors (as such
term is defined in the Rights Agreement). After the expiration of the
redemption period, the Company's right of redemption may be reinstated
if an Acquiring Person reduces his beneficial ownership to 10% or less
of the outstanding shares of Common Stock in one or more transactions
not involving the Company. Immediately upon action of the Board of
Directors of the Company ordering redemption of the Rights, the Rights
will no longer be exercisable and thereafter the only right of the
holders of such Rights will be to receive the redemption price for
each Right so held.
The terms of the Rights evidenced by this Certificate may be
supplemented or amended without the approval of any holder of the
Rights (or the shares of Common Stock) as set forth in the Rights
Agreement.
The Company is not required to issue any fractional shares of
Common Stock upon the exercise of any Right or Rights evidenced
hereby. In lieu thereof, the Company may, at its sole option, make a
cash payment as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Common Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________________, 19___.
ATTEST: THE MANITOWOC COMPANY, INC.
_____________________________ By ___________________________
Name: _______________________ Name:______________________
Title: ______________________ Title: ____________________
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By __________________________
Name: ____________________
Title: ___________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________________ hereby sells,
assigns and transfers unto ______________________________________
(Please print name and address of
transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power
of substitution.
Dated:_____________________, 19___
______________________________
Signature
Signature Guaranteed:
Signatures on this Assignment and Certificate must be guaranteed
with a medallion signature guarantee by an "eligible guarantor
institution" as that term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, including (as such terms
are defined therein) any (a) bank, (b) broker, dealer, municipal
securities dealer, municipal securities broker, government securities
dealer and government securities broker, (c) credit union, (d)
national securities exchange, registered securities association or
clearing agency, or (e) savings association.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) This Rights Certificate [ ]is [ ]is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ]did [ ]did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________________, 19___ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name(s) as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by
the Rights Certificate.)
TO: THE MANITOWOC COMPANY, INC.
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Rights Certificate to
purchase the shares of Common Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of and
delivered to:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Social security or other identifying number: ____________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and
delivered to:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Social security or other identifying number: ____________________
Dated:___________________, 19___
______________________________
Signature
Signature Guaranteed:
Signatures on this Election to Purchase and Certificate must be
guaranteed with a medallion signature guarantee by an "eligible
guarantor institution" as that term is defined in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, including (as such
terms are defined therein) any (a) bank, (b) broker, dealer, municipal
securities dealer, municipal securities broker, government securities
dealer and government securities broker, (c) credit union, (d)
national securities exchange, registered securities association or
clearing agency, or (e) savings association.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]are [
]are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ]did [ ]did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:___________________, 19__ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature(s) to the foregoing Election to Purchase and
Certificate must correspond to the name(s) as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On August 5, 1996, the Board of Directors of The Manitowoc
Company, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock, par value $0.01 per
share, of the Company (the "Common Stock"), to shareholders of record
at the close of business on September 19, 1996 (the "Record Date").
Except as set forth below, each Right entitles the registered holder
to purchase from the Company one share of Common Stock at a purchase
price of $100 per share, subject to adjustment (the "Purchase Price").
The Purchase Price shall be paid in cash. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and First Chicago Trust Company of New
York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding and no separate
Rights Certificates will be distributed. The Rights will separate
from the Common Stock and a "Distribution Date" will occur upon the
earlier of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 20% or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after September 19, 1996 will
contain a legend incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Stock
outstanding will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on September 18, 2006, unless
earlier redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise provided in the Rights Agreement or determined by
the Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
In the event that, among other things (i) the Company is the
surviving corporation in a merger with an Acquiring Person and the
Common Stock is not changed or exchanged, (ii) a Person (other than
the Company and its affiliates) becomes the beneficial owner of more
than 20% of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common Stock at a
price and on terms which a majority of the independent directors of
the Company determines to be fair to, and otherwise in the best
interests of, the shareholders), (iii) an Acquiring Person engages in
one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person,
an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., a reverse stock
split), at any time following the Distribution Date, each holder of a
Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
For example, at an exercise price of $100 per Right, each Right
not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle
its holder to purchase $200 worth of Common Stock (or other
consideration, as noted above) for $100. If the Common Stock had a
per share value of $25 at such time, the holder of each valid Right
would be entitled to purchase eight shares of Common Stock for $100.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or other business
combination transaction with another person in which the Company is
the surviving corporation, but in which the Common Stock is changed or
exchanged, or (iii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights
held by an Acquiring Person, which will be null and void) shall
thereafter have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise
price of the Right.
The number of Rights per share of Common Stock, the Purchase
Price payable upon their exercise, and the number of shares of Common
Stock or other securities or property issuable pursuant thereto, are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the Common
Stock are granted certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the current market price
of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of debt securities or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares of Common Stock are required to
be issued and, in lieu thereof, an adjustment in cash may be made
based on the market price of the Common Stock on the last trading date
prior to the date of exercise.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to
not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding shares of Common Stock then known to the
Company to be beneficially owned by any person or group of affiliated
or associated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
At any time after any person becomes an Acquiring Person and
prior to the acquisition by such person of 50% or more of the shares
of Common Stock then outstanding, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such
person that will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right, subject to
adjustment. Immediately upon the action of the Board of Directors
ordering an exchange of the Rights, the Rights affected by such order
will no longer be exercisable and thereafter the only right of the
holders of such Rights will be to receive the shares of Common Stock
issuable by the Company in exchange for such Rights.
At any time until the close of business on the tenth business day
following the Stock Acquisition Date (and, under certain
circumstances, with the concurrence of a majority of the Continuing
Directors (as defined below)), the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right, subject to
adjustment. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of
Common Stock in one or more transactions not involving the Company.
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the
date of the Rights Agreement, and any person who is subsequently
elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors, but shall not include an
Acquiring Person, or an affiliate or associate of an Acquiring Person,
or any representative or nominee of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to shareholders or to
the Company, shareholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or for other consideration) of the
Company or for common stock of an acquiring company as set forth
above.
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 Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is incorporated herein by reference.
