SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MARSH & McLENNAN COMPANIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 36-2668272
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(State of Incorporation (IRS Employer
or Organization) Identification No.)
1166 Avenue of the Americas, New York, New York 10036-2774
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of
the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
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Preferred Stock Purchase New York Stock Exchange
Rights (Pursuant to Chicago Stock Exchange
Rights Agreement dated Pacific Exchange, Inc.
as of September 18, 1997)
Securities to be registered pursuant to Section 12(g) of
the Act:
None
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(Title of Class)
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On September 18, 1997, the Board of Directors
of Marsh & McLennan Companies, Inc. (the "Company")
declared a dividend distribution of one Right for each
outstanding share of Common Stock of the Company to
stockholders of record at the close of business on
September 29, 1997 (the "Record Date"). Each Right
entitles the registered holder to purchase from the
Company a unit consisting of one two-hundredth of a share
(a "Unit") of Series A Junior Participating Preferred
Stock, no par value (the "Preferred Stock") at a Purchase
Price of $260 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust Company of New York, as Right
Agent. Capitalized terms used herein but not defined
shall have the meanings ascribed to them in the Rights
Agreement.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. Subject to certain exceptions specified in
the Rights Agreement, 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 beneficial
ownership of 15% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), other than
as a result of repurchases of stock by the Company or
certain inadvertent actions by institutional or certain
other stockholders, or (ii) 10 business days (or such
later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring
Person. 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 the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of
the Rights associated with the Common Stock represented
by such certificate. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock
will be issued.
The Rights are not exercisable until the
Distribution Date and will expire at 5:00 P.M. (New York
City time) on September 29, 2007, unless such date is
extended or the Rights are 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 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 a Person becomes an Acquiring
Person, except pursuant to an offer for all outstanding
shares of Common Stock which the directors determine to
be at a price that is fair and not inadequate and
otherwise in the best interests of the Company and its
stockholders, after receiving advice from one or more
investment banking firms, 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. However, Rights are not exercisable following
the occurrence of the events set forth above until such
time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $260 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 $520 worth of Common Stock (or other consideration,
as noted above) for $260. Assuming that the Common Stock
had a per share value of $65 at such time, the holder of
each valid Right would be entitled to purchase 8 shares of
Common Stock for $260.
In the event that, at any time following the
Stock Acquisition Date, (i) the Company is acquired in a
merger or other business combination transaction in which
the Company is not the surviving corporation (other than
with an entity which acquired the shares pursuant to an
offer described in the second preceding paragraph), (ii)
the Company engages in a merger or other business
combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company
is changed or exchanged, or (iii) more than 50% of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which have
previously been voided as set forth above) 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
events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering
Events."
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person or
group of fifty percent (50%) or more of the outstanding
Common Stock, the Board may exchange the Rights (other
than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio
of one share of Common Stock, or one two-hundredth of a
share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject
to adjustment).
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right
(payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors).
Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights
will be to receive the $.01 redemption price.
Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the
Rights will not be taxable under United States law to
stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable
income under United States law in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of
the Rights as set forth above.
Any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to
make changes which do not adversely affect the interests
of holders of Rights, or to shorten or lengthen any time
period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as
the Rights are not redeemable.
As of September 16, 1997, there were
167,838,165 shares of Common Stock of the Company issued
and outstanding and 4,501,541 shares of Common Stock of
the Company in the treasury. As of August 31, 1997,
options to purchase 16,879,649 shares of Common Stock
were outstanding. Each share of Common Stock of the
Company outstanding at the close of business on September
29, 1997, will receive one Right. So long as the Rights
are attached to the Common Stock, one additional Right
(as such number may be adjusted pursuant to the
provisions of the Rights Agreement) shall be deemed to be
delivered for each share of Common Stock issued or
transferred by the Company in the future. In addition,
following the Distribution Date and prior to the
expiration or redemption of the Rights, the Company may
issue Rights when it issues Common Stock only if the
Board deems it to be necessary or appropriate, or in
connection with the issuance of shares of Common Stock
pursuant to the exercise of stock options or under
employee plans or upon the exercise, conversion or
exchange of certain securities of the Company. Two
million shares of Preferred Stock are initially reserved
for issuance upon exercise of the Rights.
The Rights may have certain anti-takeover
effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire the Company in a
manner which causes the Rights to become discount Rights
unless the offer is conditional on a substantial number
of Rights being acquired. The Rights, however, should
not affect any prospective offeror willing to make an
offer at a price that is fair and not inadequate and
otherwise in the best interest of the Company and its
stockholders. The Rights should not interfere with any
merger or other business combination approved by the
Board since the Board may, at its option, at any time
until ten days following the Stock Acquisition Date
redeem all but not less than all the then outstanding
Rights at the Redemption Price.
In addition, certain provisions of the
Company's Restated Certificate of Incorporation may have
anti-takeover effects. The Restated Certificate of
Incorporation provides, among other things, for a
classified Board of Directors divided into three classes,
the approval of the holders of at least a majority of the
Company's outstanding Voting Stock (as defined)
beneficially owned by persons not affiliated with any
holder of ten percent or more of the Company's
outstanding Voting Stock to authorize certain Business
Transactions (as defined) between the Company and such
holder unless that transaction is approved by a majority
of the Disinterested Directors (as defined), and
stockholder action only at a stockholders' meeting and
not by written consent. In addition, the By-laws of the
Company provide, among other things, that stockholders
wishing to nominate a director or propose other action at
an annual meeting give advance written notice of such
nomination or proposal not less than 60 days nor more
than 90 days prior to such annual meeting and that
special meetings of stockholders may only be called by
the Chairman or, if directed by the Board, the Secretary
of the Company.
The Rights Agreement, dated as of September 18,
1997, between the Company and Harris Trust Company of New
York, as Rights Agent, specifying the terms of the Rights
is attached hereto as an exhibit and is incorporated
herein by reference. The foregoing description of the
Rights is qualified in its entirety by reference to such
exhibit.
ITEM 2. EXHIBITS.
1 Rights Agreement, dated as of September 18,
1997, between Marsh & McLennan Companies, Inc.
and Harris Trust Company of New York, as Rights
Agent, including the form of Rights Certificate
as Exhibit A and the Summary of Rights to
Purchase Preferred Stock as Exhibit B.
Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until
after the Distribution Date (as such term is
defined in the Rights Agreement).
SIGNATURE
Pursuant to the requirements of Section 12 of
the Securities Exchange Act of 1934, the Registrant has
duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: October 10, 1997 Marsh & McLennan Companies,
Inc.
By: /s/ Gregory Van Gundy
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Name: Gregory Van Gundy
Title: General Counsel &
Secretary
EXHIBIT INDEX
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Exhibit Description Page
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1 Rights Agreement, dated as of
September 18, 1997, between Marsh &
McLennan Companies, Inc. and Harris
Trust Company of New York, as Rights
Agent, including the form of Rights
Certificate as Exhibit A and the
Summary of Rights to Purchase
Preferred Stock as Exhibit B.
Pursuant to the Rights Agreement,
printed Rights Certificates will not
be mailed until after the Distribution
Date (as such term is defined in the
Rights Agreement).
MARSH & McLENNAN COMPANIES, INC.
and
HARRIS TRUST COMPANY OF NEW YORK
Rights Agent
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Rights Agreement
Dated as of September 18, 1997
Table of Contents
Section Page
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1. Certain Definitions . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . . . . . 6
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 . . . . . 10
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . 11
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . 13
9. Reservation and Availability of Capital Stock . . . 14
10. Preferred Stock Record Date . . . . . . . . . . . . 16
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . 16
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 . . . . . . . . . . . . . . . . . 31
16. Agreement of Rights Holders . . . . . . . . . . . . 31
17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . 32
18. Concerning the Rights Agent . . . . . . . . . . . . 32
19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . 33
20. Duties of Rights Agent . . . . . . . . . . . . . . 34
21. Change of Rights Agent . . . . . . . . . . . . . . 36
22. Issuance of New Rights Certificates . . . . . . . . 37
23. Redemption and Termination . . . . . . . . . . . . 37
24. Exchange . . . . . . . . . . . . . . . . . . . . . 38
25. Notice of Certain Events . . . . . . . . . . . . . 40
26. Notices . . . . . . . . . . . . . . . . . . . . . . 41
27. Supplements and Amendments . . . . . . . . . . . . 41
28. Successors . . . . . . . . . . . . . . . . . . . . 42
29. Determinations and Actions by the Board of
Directors, etc . . . . . . . . . . . . . . . . 42
30. Benefits of this Agreement . . . . . . . . . . . . 42
31. Severability . . . . . . . . . . . . . . . . . . . 43
32. Governing Law . . . . . . . . . . . . . . . . . . . 43
33. Counterparts . . . . . . . . . . . . . . . . . . . 43
34. Descriptive Headings . . . . . . . . . . . . . . . 43
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights to Purchase Preferred
Stock
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 18, 1997 (the
"Agreement"), between Marsh & McLennan Companies, Inc., a
Delaware corporation (the "Company"), and Harris Trust Company of
New York, a New York corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 17, 1987 (the "1987 Rights
Dividend Declaration Date"), the Board of Directors of the
Company authorized the Rights Agreement, dated as of September
17, 1987, as amended, between the Company and the Rights Agent
thereunder (the "1987 Agreement") and declared a dividend
distribution of one right (a "1987 Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding
at the close of business on September 28, 1987 (the "1987 Record
Date"). Each 1987 Right representing the right to purchase one
one-hundredth of a share of Series A Junior Participating
Preferred Stock of the Company;
WHEREAS, on September 18, 1997, the Board of Directors
of the Company determined it desirable and in the best interests
of the Company and its shareholders for the Company to extend the
benefits afforded by the 1987 Agreement and to implement such
extension by executing this Agreement;
WHEREAS, on September 18, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock outstanding
upon the close of business on September 29, 1997 (the "Record
Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock issued
(whether as an original issuance or from the Company's treasury)
between the Record Date and the Distribution Date (as hereinafter
defined) and in certain other circumstances provided herein, each
Right initially representing the right to purchase one two-
hundredth of a share of Series A Junior Participating Preferred
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 who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan, (iv) any Person who becomes the
Beneficial Owner of fifteen percent (15%) or more of the shares
of Common Stock then outstanding as a result of a reduction in
the number of shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company unless and
until such Person, after becoming aware that such Person has
become the Beneficial Owner of fifteen percent (15%) or more of
the then outstanding shares of Common Stock, acquires beneficial
ownership of additional shares of Common Stock representing one
percent (1%) or more of the shares of Common Stock then
outstanding, or (v) any such Person who has reported or is
required to report such ownership (but less than 20%) on Schedule
13G under the Securities and Exchange Act of 1934, as amended and
in effect on the date of the Agreement (the "Exchange Act") (or
any comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which
Schedule 13D does not state any intention to or reserve the right
to control or influence the management or policies of the Company
or engage in any of the actions specified in Item 4 of such
schedule (other than the disposition of the Common Stock) and,
within 10 Business Days of being requested by the Company to
advise it regarding the same, certifies to the Company that such
Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and
who, together with all Affiliates and Associates, thereafter does
not acquire additional shares of Common Stock while the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding; provided, however, that if the Person requested
to so certify fails to do so within 10 Business Days, then such
Person shall become an Acquiring Person immediately after such
10-Business-Day period.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such
Person's Affiliates or Associates, 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, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a
Triggering Event (as hereinafter defined), or (C) securities
issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date (as hereinafter
defined) or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section ll(i) hereof
in connection with an adjustment made with respect to any
Original Rights;
(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
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 acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided, however, that
nothing in this paragraph (d) 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,
and then only if such securities continue to be owned by
such Person at such expiration of forty days.
(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 or Illinois 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 City time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Common Stock" shall mean the common stock,
$1.00 par value, 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.
(h) "Common Stock Equivalents" shall have the
meaning set forth in Section ll(a)(iii) hereof.
(i) "Current market price" shall have the meaning
set forth in Section ll(d)(i) hereof.
(j) "Current Value" shall have the meaning set
forth in Section ll(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(l) "Equivalent Preferred Stock" shall have the
meaning set forth in Section 11(b) hereof.
(m) "Exchange Act" shall have the meaning set
forth in Section l(a) hereof.
(n) "Exchange Ratio" shall have the meaning set
forth in Section 24 hereof.
(o) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(p) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(q) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(r) "Preferred Stock" shall mean shares of Series
A Junior Participating Preferred Stock, no par value, of the
Company and, to the extent that there are not a sufficient number
of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, no par value, of the Company
designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating
Preferred Stock.
(s) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set
forth in Section 4(a)(ii) hereof.
(u) "Record Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.
(v) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(w) "Rights" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(x) "Rights Certificates" shall have the meaning
set forth in Section 3(a) hereof.
(y) "Rights Dividend Declaration Date" shall have
the meaning set forth in the WHEREAS clause at the beginning of
this Agreement.
(z) "Section ll(a)(ii) Event" shall mean any
event described in Section ll(a)(ii) hereof.
(aa) "Section ll(a)(ii) Trigger Date" shall have
the meaning set forth in Section ll(a)(iii) hereof.
(ab) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(ac) "Spread" shall have the meaning set forth in
Section ll(a)(iii) hereof.
(bb) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of the
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such.
(cc) "Subsidiary" shall mean, with reference to
any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such
Person.
(dd) "Substitution Period" shall have the meaning
set forth in Section ll(a)(iii) hereof.
(ee) "Summary of Rights" shall have the meaning
set forth in Section 3(b) hereof.
(ff) "Trading Day" shall have the meaning set
forth in Section ll(d)(i) hereof.
(gg) "Triggering Event" shall mean any Section
ll(a)(ii) Event or any Section 13 Event.
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 (or such
later date as the Board shall determine) 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 or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or
sent or given 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 become an Acquiring
Person (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 certificates for Rights) and not
by separate 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, insured, postage-prepaid mail, at the
expense of the Company, 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
Section ll(p) 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) The Company will make available, as promptly
as practicable following the Record Date, a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit B
(the "Summary of Rights") to any holder of Rights who may so
request from time to time prior to the Expiration Date. 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 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 from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights and shall bear
the following legend (or the legend required under the 1987
Agreement):
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Marsh & McLennan Companies,
Inc. (the "Company") and the Rights Agent thereunder
(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. 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 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 bearing the foregoing legend
(or the legend required under the 1987 Agreement), 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 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 ll 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 one two-hundredths of a share of
Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one two-hundredth of a
share, the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a), Section 11(i) 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,
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 which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that
has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6
or Section ll 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 President
or any Vice President, 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, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, 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
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
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 Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one
two-hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitles such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or 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), Section 14 and Section 24 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 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 countersignature 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,
at any time after the Distribution Date 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 ll(a)(iii) and Section 23(a) hereof) in
whole or in part 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 of the aggregate Purchase
Price with respect to the total number of one two-hundredths of a
share (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) 5:00 P.M., New York City Time, on
September 29, 2007, or such later date as may be established by
the Board of Directors prior to the expiration of the Rights
(such date, as it may be extended by the Board, the ("Final
Expiration Date")), or (ii) the time at which the Rights are
redeemed or exchanged as provided in Section 23 and Section 24
hereof (the earlier of (i) and (ii) being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each one two-hundredth
of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $260, and shall be subject to adjustment from
time to time as provided in Sections ll and 13(a) hereof and
shall be payable 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 one two-hundredth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may
be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one two-hundredths
of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one two-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or, upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
ll(a)(iii) hereof) shall be made in cash or by certified bank
check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section ll(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. The
Company reserves the right to require prior to the occurrence of
a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock
will be issued.
(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 equivalent to
the 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 Section
ll(a)(ii) 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, 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 of Directors
of the Company has determined is part of a plan, arrangement or
understanding that 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 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 Preferred 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
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section ll(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or 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) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section ll(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section ll(a)(iii)
hereof, a registration statement under the Act, with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action
as may be appropriate under, or to ensure compliance with, 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 has
been rescinded. In addition, if the Company shall determine
that a registration statement is required following the
Distribution Date, the Company may temporarily suspended the
exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite qualification
in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one
two-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or 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.
(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 that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one two-hundredths of a share of
Preferred Stock (or Common Stock and/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 that 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
one two-hundredths of a share of Preferred Stock (or Common Stock
and/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 a number of one two-
hundredths of a share of Preferred Stock (or Common Stock and/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
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. Preferred Stock Record Date. Each person
in whose name any certificate for a number of one two-hundredths
of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the 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 Preferred
Stock (or Common Stock and/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
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/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 to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, 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 ll.
(a)(i) In the event the Company shall at any
time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of
the Preferred Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in
this Section ll(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such
subdivision, combination or reclassification, and the
number and kind of shares of Preferred 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, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of
Preferred 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 Preferred
Stock transfer books of the Company were open, such
holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an
event occurs that would require an adjustment under
both this Section ll(a)(i) and Section ll(a)(ii)
hereof, the adjustment provided for in this Section
ll(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section
ll(a)(ii) hereof.
(ii) In the event any Person shall at
any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person 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 an 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 of Directors who are not representatives,
nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more
investment banking firms, to be (a) at a price that is
fair to stockholders and not inadequate (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 stockholders
then, promptly following the occurrence of such event, 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, in
lieu of a number of one two-hundredths of a share of Preferred
Stock, 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 one two-hundredths
of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section ll(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
ll(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of
shares of Common Stock that are authorized by the
Company's Restated Certificate of Incorporation, but
that are 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 ll(a), the Company shall (A)
determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value"), and
(B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right and
payment of the applicable 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, such as the Preferred Stock, which the
Board has deemed to have the essentially same value or
economic rights as shares of Common Stock (such shares
of preferred stock being referred to as "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
(less the amount of any reduction in the Purchase
Price), 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
ll(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 ll(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. For purposes of the preceding sentence, the
term "Spread" shall mean the excess of (i) the Current
Value over (ii) the Purchase Price. If the Board
determines 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 ll(a)(ii) Trigger
Date, in order that the Company may seek shareholder
approval for the authorization of such additional
shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period").
To the extent that action is to be taken pursuant to
the first and/or third sentences of this Section ll(a)
(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
such shareholder approval for such 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
ll(a)(iii), the value of each Adjustment Share shall be
the current market price per share of the Common Stock
on the Section ll(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall
be deemed to equal the Current Market Price per share
of 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
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred
Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to
Section ll(d) hereof) per share of Preferred 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 Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). 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 of Directors of the
Company, 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 Preferred 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 Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
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 Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or evidences of
indebtedness, or of subscription rights or warrants (excluding
those referred to in Section ll(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 (as determined pursuant to Section ll(d)
hereof) per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Preferred Stock, and the denominator of which shall
be such Current Market Price (as determined pursuant to Section
ll(d) hereof) per share of Preferred 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) (i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section ll(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 thirty (30) consecutive
Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section ll(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) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock,
and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day Period, as set
forth above, 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 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 on which the shares of Common Stock are listed
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, 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.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i)
of this Section ll(d) (other than the last sentence
thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described
in clause (i) of this Section ll(d), the Current Market
Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such
events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied
by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, Current
Market Price per share of the Preferred Stock 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. For all
purposes of this Agreement, the Current Market Price of
one two-hundredth of a share of Preferred Stock shall
be equal to the Current Market Price of one share of
Preferred Stock divided by 200.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this
Section ll(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section ll shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this
Section ll(e), any adjustment required by this Section ll 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 ll(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 Preferred Stock, thereafter
the number of such other shares 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
Preferred Stock contained in Sections ll(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(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 one two-hundredths of a share of Preferred
Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section ll(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections ll(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
one two-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one two-hundredths of a share 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 one
two-hundredths of a share of Preferred 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 one two-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest one 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 ll(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 one two-hundredths of a share
of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one two-hundredth of a
share and the number of one two-hundredths of a share 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 stated
value, if any, of the number of one two-hundredths of a share of
Preferred 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 such number of one
two-hundredths of a share of Preferred 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 number of one two-hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the number of one
two- hundredths of a share of Preferred 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
(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 their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred 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 Preferred Stock shall not be taxable to
such stockholders.
(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 in a transaction that complies with Section ll(o)
hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section ll(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series
of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section ll(o)
hereof), 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 that 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
Section 23 or Section 26 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.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of 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 but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator 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.
Section 12. Certificate of Adjusted Purchase Price 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 Preferred Stock and the Common Stock, a copy of such
certificate, and (c) if a Distribution Date has occurred, mail a
brief summary thereof to each holder of a Rights Certificate in
accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be obligated or
responsible for calculating any adjustment, nor shall it be
deemed to have knowledge of such an adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event that, 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 in a transaction that complies
with Section ll(o) hereof), 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 in
a transaction that complies with Section ll(o) hereof) 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 a 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 in one or more
transactions each of which complies with Section ll(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one two-hundredths of a
share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section ll(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such
one two-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section ll(a)(ii)
Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to Section ll(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the 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 ll(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 into which shares of Common Stock of the
Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is
the other party to such merger or consolidation; 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 Common
Stocks 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 such
consolidation, merger, sale or transfer 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
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, 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;
(ii) take all such other action as may be
necessary to enable the Principal Party to issue the
securities purchasable upon exercise of the Rights,
including but not limited to the registration or
qualification of such securities under all requisite
securities laws of jurisdictions of the various states and
the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and
(iii) will deliver to holders of the
Rights historical financial statements for the
Principal Party and each of its Affiliates that comply
in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section ll(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 who
acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock that
complies with the provisions of Section ll(a)(ii) hereof (or a
wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such 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 ll(p) hereof, or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay 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 of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one two-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
two-hundredth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral
multiples of one two-hundredth of a share of Preferred Stock, 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 two-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one
two-hundredth of a share of Preferred Stock shall be one
two-hundredth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering
Event, 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 of fractional shares of Common Stock, 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 (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section ll(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) 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 permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement 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 at 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) subject to Section 6(a) and Section 7(f)
hereof, 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, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the 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; provided, however, the Company
must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. 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 number of one two-hundredths of a share
of Preferred 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
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in 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. The reasonable costs and reasonable expenses of
enforcing this right of indemnification shall be paid by the
Company.
(b) The Rights Agent may conclusively rely upon
and shall be protected by the Company and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration or the
exercise or performance of its duties hereunder 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, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the
proper Person or Persons or otherwise upon the advice of counsel.
(c) Notwithstanding anything in this Agreement to
the contrary, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of the likelihood of such loss
or damage and regardless of the form of the action.
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, stock transfer or other shareholder services
business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the
part of any of the parties hereto; but only if 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, and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, it may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (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 the Chairman of the
Board, 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
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 or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent is serving as an
administrative agent and, accordingly, 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
adjustment required under the provisions of Section 11, Section
13 or Section 24 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by 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 or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred 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 and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken, or
omitted to be taken, by the Rights Agent in accordance with a
proposal included in any such application on or after the date
specified in such application (which date shall not be less than
ten Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application subject to the
proposed action or omission and specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the 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 Right 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 of transfer without first
consulting with the Company.
(l) The Rights Agent shall not be required to
take notice or be deemed to have notice of any fact, event or
determination (including, without limitation, any dates or events
defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
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 and Preferred Stock, by registered or certified
mail, and, if such resignation occurs after the Distribution
Date, to the registered holders of the Rights Certificates by
first-class mail, at the expense of the Company. 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 and Preferred Stock, by registered or
certified mail, and, if such removal occurs after the
Distribution Date, 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 the 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 legal business entity organized
and doing business under the laws of the United States or of the
State of New York or of any other state of the United States in
good standing, having an office in the State of New York, which
is authorized under such laws to exercise corporate trust or
stock transfer or shareholder services powers 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
legal business entity 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 the
Preferred Stock, and, if such appointment occurs after the
Distribution Date, 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 of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close of
business on the tenth 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 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 $.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").
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section ll(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined in
Section ll(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company 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 of
Directors 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.
Section 24. Exchange.
(a) The Board of Directors of the Company 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 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
of Directors of the Company 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 entity holding 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 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company 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 public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company
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 the
Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute Preferred Stock (or
Equivalent Preferred Stock, as such term is defined in paragraph
(b) of Section 11 hereof) for Common Stock exchangeable for
Rights, at the initial rate of one two-hundredth of a share of
Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect stock splits,
stock dividends and other similar transactions after the date
hereof.
(d) 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 acton as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of
the Rights.
(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, there shall be paid to
the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a
whole share 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)(i) 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 Preferred Stock or to
make any other distribution to the holders of Preferred Stock
(other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section ll(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
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 or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section ll(o) hereof), 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,
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
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
(b) In case any of the events set forth in
Section ll(a)(ii) hereof 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 ll(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities.
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 by the Company) as follows:
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
Attention: Corporate Secretary
Subject to the provisions of Section 21, 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 certified or
registered mail and shall be deemed given upon receipt, addressed
(until another address is filed in writing by the Rights Agent
with the Company) as follows:
Harris Trust Company of New York
c/o Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60690-0755
Attention: Alma Menendez, Trust Officer
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. Prior to the
Distribution Date, and subject to the penultimate sentence of
this Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person); provided, this Agreement may not be supplemented or
amended to lengthen any time period hereunder, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock. Notwithstanding anything herein to the contrary, this
Agreement may not be amended at a time when the Rights are not
redeemable. Further, notwithstanding anything in this Agreement
to the contrary, no supplement or amendment that changes the
rights and duties of the Rights Agent under this Agreement shall
be effective without the written consent of the Rights Agent.
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, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board 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 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 any directors on
the Board 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 of Directors of the Company
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 of Directors.
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 Delaware 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, except that the rights
and obligations of the Rights Agent shall be governed by the laws
of the State of New York.
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: MARSH & McLENNAN COMPANIES,
INC.
/s/ Gregory Van Gundy By /s/ A.J.C. Smith
-------------------------- ------------------------
Name: Gregory Van Gundy Name: A.J.C. Smith
Title: Secretary Title: Chairman
Countersigned:
Attest: HARRIS TRUST COMPANY OF NEW YORK,
as Rights Agent
By /s/ Thomas D. Grady By /s/ Alma Menendez
----------------------- ---------------------------
Name: Thomas D. Grady Name: Alma Menendez
Title: Vice President Title: Trust Officer
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 29, 2007 UNLESS EXTENDED PRIOR
THERETO BY THE BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.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 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
MARSH & McLENNAN COMPANIES, 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 September 18, 1997 (the Rights Agreement), between
Marsh & McLennan Companies, Inc., a Delaware corporation (the
"Company"), and Harris Trust Company of New York, a New York
corporation (the "Rights Agent"), to purchase from the Company at
any time prior to 5:00 P.M. (New York City time) on September 29,
2007 (unless such date is extended prior thereto by the Board of
Directors) at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent,
one two-hundredth of a fully paid, non-assessable share of Series
A Junior Participating Preferred Stock (the "Preferred Stock") of
the Company, at a purchase price of $260 per one two-hundredth of
a 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 the number
and Purchase Price as of September 18, 1997, based on the
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section ll(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(a) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (b) a transferee of any such Acquiring Person,
Associate or Affiliate, or (c) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of 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 such
Section ll(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events.
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 are also available upon written
request to the Rights Agent.
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 one two-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If 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 $.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. In addition, under certain
circumstances following the Stock Acquisition Date, the Rights
may be exchanged, in whole or in part, for shares of the Common
Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one two-hundredth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement. The Company, at its election, may require that a
number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
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 Preferred 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 stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give consent to or
withhold consent from any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this 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 _____________, ____
ATTEST: MARSH & McLENNAN COMPANIES,
INC.
By
-------------------------- ------------------------
Name: Name:
Title: Title:
Countersigned:
HARRIS 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: ______________, ____
_______________________________
Signature
Signature Guaranteed:
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 pursuant to 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: _____________, ____ ___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name 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: MARSH & McLENNAN COMPANIES, INC.:
The undersigned hereby irrevocably elects to exercise
___________ Rights represented by this Rights Certificate to
purchase the shares of Preferred 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 insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Dated: _______________, _____
______________________________
Signature
Signature Guaranteed:
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 pursuant to
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: ___________, ____
______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit B
[FORM OF]
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 18, 1997, the Board of Directors of Marsh
& McLennan Companies, Inc. (the "Company") declared a dividend
distribution of one Right for each outstanding share of Common
Stock of the Company to stockholders of record at the close of
business on September 29, 1997 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company a
unit consisting of one two-hundredth of a share (a "Unit") of
Series A Junior Participating Preferred Stock, no par value (the
"Preferred Stock") at a Purchase Price of $260 per Unit, subject
to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust Company of New York, as Right Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. Subject to
certain exceptions specified in the Rights Agreement, 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 beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), other than as a result of repurchases
of stock by the Company or certain inadvertent actions by
institutional or certain other stockholders, or (ii) 10 business
days (or such later date as the Board shall determine) following
the commencement of a tender offer or exchange offer that would
result in a person or group becoming an Acquiring Person. 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 the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Company reserves the right
to require prior to the occurrence of a Triggering Event (as
defined below) that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock
will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at 5:00 P.M. (New York City time) on
September 29, 2007, unless such date is extended or the Rights
are 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 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 a Person becomes an Acquiring Person,
except pursuant to an offer for all outstanding shares of Common
Stock which the directors determine to be fair and not inadequate
to and to otherwise be in the best interests of the Company and
its stockholders, after receiving advice from one or more
investment banking firms, 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. However, Rights are not exercisable
following the occurrence of the events set forth above until such
time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $260 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 $520 worth of
Common Stock (or other consideration, as noted above) for $260.
Assuming that the Common Stock had a per share value of $65 at
such time, the holder of each valid Right would be entitled to
purchase 8 shares of Common Stock for $260.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation (other than with an entity that
acquired the shares pursuant to an offer described in the second
preceding paragraph), (ii) the Company engages in a merger or
other business combination transaction in which the Company is
the surviving corporation and the Common Stock of the Company is
changed or exchanged, or (iii) more of the Company's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which have previously been voided as set forth
above) 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 events set forth in
this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
At any time after a person becomes an Acquiring Person
and prior to the acquisition by such person or group of fifty
percent (50%) or more of the outstanding Common Stock, the Board
may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, for Common
Stock at an exchange ratio of one share of Common Stock, or one
two-hundredth of a share of Preferred Stock (or of a share of a
class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right
(subject to adjustment).
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (payable in cash,
Common Stock or other consideration deemed appropriate by the
Board of Directors). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable under United States law to stockholders or to the
Company, stockholders may, depending upon the circumstances,
recognize taxable income under United States law in the event
that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of the Rights
as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to make changes which do not adversely affect the
interests of holders of Rights, or to shorten or lengthen any
time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement is being 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 Rights Agent. 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.
Addendum for U.K. **
1. Taxation
The Board of Directors of the Company has been advised
that the issue of Rights under the Rights Agreement to
stockholders chargeable to U.K. tax on income and capital gains
should not constitute a capital or income distribution for the
purposes of U.K. taxation. Accordingly, a stockholder chargeable
to U.K. tax on income and capital gains should not be obliged to
make a return to the U.K. Inland Revenue in respect of the
receipt of Rights under the Rights Agreement.
However, should the Rights become exercisable,
following the occurrence of an event giving rise to a
Distribution Date, the Board has been advised that a stockholder
chargeable to U.K. tax on income and capital gains may be treated
as receiving an income distribution, but the precise U.K. tax
treatment may depend upon the circumstances in which the Rights
become exercisable.
If you are in doubt as to your U.K. tax position, you
should consult your professional adviser.
2. Listing on the London Stock Exchange
If and when the Distribution Date occurs, so that the
Rights separate from the Common Stock and become exercisable, and
provided the Common Stock is then still listed on the London
Stock Exchange, the Company will seek to list the Rights on the
London Stock Exchange.
-----------------
** To be included in copy mailed to shareholders of record in
the United Kingdom.
