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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: March 9, 1999 Date of Earliest Event Reported: March 5, 1999
MERRIMAC INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-11201 22-1642321
(State of incorporation (Commission File No.) (I.R.S. Employer
or organization) Identification No.)
41 Fairfield Place
West Caldwell, New Jersey 07006-6287
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (973) 575-1300
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(Former name or former address, if changed since last report)
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Item 5. Other Events
Shareholder Rights Plan
On March 5, 1999, the Board of Directors of Merrimac Industries, Inc.
(the "Company") approved a shareholder rights plan and declared a dividend of
one common share purchase right (a "Right") for each outstanding share of common
stock, par value $.50 per share (the "Common Stock"), of the Company. The
dividend is payable on March 19, 1999 (the "Record Date") to the shareholders of
record as of the close of business on that date. Each right will entitle the
holder to purchase from the Company, upon the occurrence of certain events, one
share of Common Stock for $25.00 (the "Purchase Price"). The terms and
conditions of the Rights are set forth in a Rights Agreement dated as of March
9, 1999 between the Company and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agreement").
Prior to the Distribution Date (as defined below), the Rights will be
evidenced by the certificates for and will be transferred with the Common Stock
and the registered holders of the Common Stock will be deemed to be the
registered holders of the Rights. After the Distribution Date, the rights agent
will mail separate certificates evidencing the Rights to each record holder of
the Common Stock as of the close of business on the Distribution Date (unless
the Rights were earlier redeemed or exchanged), and thereafter the Rights will
be transferable separately from the Common Stock. The "Distribution Date"
generally means the earlier of (i) the close of business on the 10th day after
the date of the first public announcement that a person (other than the Company
or any of its subsidiaries or any employee benefit plan of the Company or any
such subsidiary) has acquired beneficial ownership of 10% or more of the
outstanding shares of Common Stock (an "Acquiring Person"), (ii) the close of
the business on the 10th business day (or such later day as may be designated
before any person has become an Acquiring Person by the Board of Directors)
after the date of the commencement of, or the announcement of an intention to
commence, a tender or exchange offer by any person which would, if consummated,
result in such person becoming an Acquiring Person.
If any person has become an Acquiring Person (but before the occurrence
of any of the events described in the second succeeding paragraph), each Right
(other than Rights beneficially owned by the Acquiring Person and certain
affiliated persons) will entitle the holder to purchase after the Distribution
Date, for the Purchase Price, a number of shares of Common Stock having a market
value of twice the Purchase Price.
At any time after any person has become an Acquiring Person (but before
any person becomes the beneficial owner of 50% or more of the outstanding shares
of Common Stock or the occurrence of any of the events described in the next
paragraph), the Board of Directors may exchange all or part of the Rights (other
than Rights beneficially owned by an Acquiring Person and certain affiliated
persons) for shares of Common Stock at an exchange ratio of one share of Common
Stock for each Right, subject to adjustment.
If, after any person has become an Acquiring Person, (1) the Company is
involved in a merger or other business combination in which the Company is not
the surviving corporation or its Common Stock is exchanged for other securities
or assets or (2) the Company and/or one or more of its subsidiaries sell or
otherwise transfer assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its subsidiaries, taken as a whole,
then each Right will entitle the holder to purchase after the Distribution Date,
for the Purchase Price, a number of shares of common stock of the other party to
such business combination or sale (or in certain circumstances, an affiliate)
having a market value of twice the Purchase Price.
The Board of Directors may redeem all of the Rights at a price of $0.01
per Right at any time before any person has become an Acquiring Person.
The Rights will expire on March 19, 2009, unless earlier exchanged or
redeemed.
For so long as the Rights are redeemable, the Rights Agreement may be
amended in any respect. At any time when the Rights are no longer redeemable,
the Rights Agreement may be amended in any respect that does not adversely
affect the holders of Rights (other than any Acquiring Person and certain
affiliated persons), or cause the Rights again to become redeemable.
A Rights holder has no rights as a shareholder of the Company,
including the right to vote and to receive dividends, until such holder
exercises his or her Rights.
The Rights Agreement includes antidilution provisions designed to
prevent efforts to diminish the effectiveness of the Rights.
As of March 5, 1999, there were 1,763,819 shares of Common Stock
outstanding and 763,567 shares of Common Stock reserved for issuance under the
Company's stock option plans. Each outstanding share of Common Stock on the
Record Date will receive one Right. Shares of Common Stock issued after the
Record Date and prior to the Distribution Date will be issued with a Right
attached so that all shares of Common Stock outstanding prior to the
Distribution Date will have Rights attached.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of the Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors since the Rights may be redeemed by the Company as
described above.
While the dividend of the Rights will not be taxable to shareholders or
to the Company, shareholders or the Company may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable as set forth above.
The foregoing description of the Rights Agreement is qualified in its
entirety by reference to the full text of the Rights Agreement, which is
attached hereto as Exhibit 1 and incorporated herein by reference.
Amended and Restated By-laws
Also on March 5, 1999, the Board of Directors of the Company amended
and restated the Company's By-laws. The By-laws of the Company, as amended and
restated, provide for advance notice procedures for shareholder nominations to
the Board of Directors of the Company and shareholder proposals of business to
be considered at an annual meeting of the Company's shareholders.
The foregoing description of the amended and restated By-laws of the
Company is qualified in its entirety by reference to the full text of the
Amended and Restated By-laws of the Company, which is attached hereto as Exhibit
3 and incorporated herein by reference.
Item 7. Exhibits
1 Rights Agreement dated as of March 9, 1999 between Merrimac Industries,
Inc. and ChaseMellon Shareholder Services, L.L.C., as Rights Agent,
which includes the Form of Right Certificate as Exhibit A and the
Summary of Terms of the Rights Agreement as Exhibit B.
2 Press Release dated March 9, 1999.
3 Amended and Restated Bylaws of Merrimac Industries, Inc., as adopted on
March 5, 1999.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized.
MERRIMAC INDUSTRIES, INC.
By /s/ Robert V. Condon
--------------------------
Name: Robert V. Condon
Title: Vice President, Finance
and Chief Financial
Officer
Dated: March 9, 1999
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
- ------- -------------
1. Rights Agreement dated as of March 9,
1999 between Merrimac Industries, Inc.
and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, which includes
the Form of Right Certificate as Exhibit
A and the Summary of Terms of the Rights
Agreement as Exhibit B.
2. Press Release dated March 9, 1999.
3. Amended and Restated Bylaws of Merrimac
Industries, Inc., as adopted on March 5,
1999.
Exhibit 1
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RIGHTS AGREEMENT
Dated as of March 9, 1999
between
MERRIMAC INDUSTRIES, INC.
and
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.,
as Rights Agent
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions...........................................1
Section 2. Appointment of Rights Agent...................................4
Section 3. Issue of Right Certificates...................................4
Section 4. Form of Right Certificates....................................6
Section 5. Countersignature and Registration.............................6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.............................7
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.............................8
Section 8. Cancellation and Destruction of Right Certificates............9
Section 9. Availability of Common Shares.................................9
Section 10. Common Shares Record Date....................................11
Section 11. Adjustment of Purchase Price, Number of Shares
or Number of Rights..................................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...20
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power...........................20
Section 14. Fractional Rights and Fractional Shares......................22
Section 15. Rights of Action.............................................23
Section 16. Agreement of Right Holders...................................24
Section 17. Right Holder Not Deemed a Shareholder........................24
Section 18. Concerning the Rights Agent..................................25
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Section 19. Merger or Consolidation or Change of Name of Rights Agent....25
Section 20. Duties of Rights Agent.......................................26
Section 21. Change of Rights Agent.......................................29
Section 22. Issuance of New Right Certificates...........................29
Section 23. Redemption...................................................30
Section 24. Exchange.....................................................30
Section 25. Notice of Certain Events.....................................31
Section 26. Notices......................................................32
Section 27. Supplements and Amendments...................................33
Section 28. Successors...................................................34
Section 29. Determination and Actions by the Board, etc..................34
Section 30. Benefits of this Agreement...................................34
Section 31. Severability.................................................34
Section 32. Governing Law................................................34
Section 33. Counterparts.................................................34
Section 34. Descriptive Headings.........................................35
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights
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RIGHTS AGREEMENT
Agreement dated as of March 9, 1999 between Merrimac Industries,
Inc., a New Jersey corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company, as Rights Agent (the
"Rights Agent").
The Board of Directors of the Company has authorized and declared
a dividend of one common share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding on the close of business on
March 19, 1999 (the "Record Date"), each Right representing the right to
purchase one Common Share (as defined herein), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share of the Company that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
10% or more of the Common Shares of the Company then outstanding, but
shall not include any Exempt Person (as such term is hereinafter
defined). Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by
the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 10% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 10% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner
of any additional Common Shares of the Company (other than an
acquisition that does not directly or indirectly increase the
proportionate share of the Common Shares of the Company beneficially
owned by such Person), then such Person shall be deemed to be an
"Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that
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a Person who would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to have "Beneficial Ownership" of and to "beneficially
own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns (as determined pursuant to Rule 13d-3
under the Exchange Act), directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of certain
events or the passage of time or both) pursuant to any agreement,
arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right to vote or
dispose of (whether such right is exercisable immediately or only
upon the occurrence of certain events or the passage of time or
both) pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under
this clause (B) if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange
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Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent
as contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding", when used with reference
to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder. Notwithstanding the foregoing, the calculation of Beneficial
Ownership for Arthur A. Oliner, with respect to the Common Shares of
the Company, shall exclude, without duplication, (i) any shares of
Common Stock issued or that would be issuable upon the exercise of
options granted to him under the Company's 1993 Stock Option Plan or
any successor plan thereto and (ii) 25,000 shares of Common Stock.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(e) "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.
(f) "Common Shares" shall mean the shares of Common Stock (as such
term is hereinafter defined), except that, when used with reference to
any Person other than the Company, shall mean the capital stock (or
equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned Person.
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(g) "Common Stock" shall mean the Common Stock, par value $.50 per
share, of the Company.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Exempt Person" shall mean the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(l) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(m) "Shares Acquisition Date" shall mean the first date of public
(which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(n) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company 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. If the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine. The Rights Agent shall have no
duty to supervise, and in no event shall be liable for, the acts or omissions of
any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the close of business on the tenth day after the Shares Acquisition Date or
(ii) the close of business on the tenth Business Day (or such later date as may
be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date
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of the commencement 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 entity holding Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Common Shares aggregating 10% or
more of the then outstanding Common Shares (the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares and not by separate Right Certificates and the registered holders
of the Common Shares shall be deemed the registered holders of the associated
Rights, and (y) any transfer of Common Shares (or any interest therein,
including the creation of a security interest) will also effect a transfer of
the associated Rights (or the equivalent interest therein) and neither the
Rights nor any interest therein may be transferred otherwise than by transfer of
the associated Common Shares (or the equivalent interest therein). As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date (other than any Acquiring Person or any
Affiliate or Associate thereof), at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto (a "Right Certificate"), evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) Until the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, certificates for Common Shares shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences certain Rights as set forth in a Rights
Agreement between Merrimac Industries, Inc. and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, dated as of March 9, 1999 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of Merrimac Industries, Inc. Merrimac Industries, Inc. will
mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be evidenced by separate certificates and no longer be
evidenced by this certificate, may be
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redeemed or exchanged or may expire. As set forth in the Rights
Agreement, Rights issued to, or held by, any Person who becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
Notwithstanding this paragraph (b), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder of
a Right.
(c) In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. Subject to the provisions
of Section 22 hereof, the Right Certificates (and the forms of election to
purchase Common Shares and of assignment to be printed on the reverse thereof)
shall be substantially in the form of 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 (which do not affect the
duties or responsibilities of the Rights Agent) and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation 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. The Right Certificates, whenever distributed, shall be dated as of the
Record Date.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent, either manually or by facsimile signature, and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and
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delivered by the Company with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right 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 and receipt by the Rights
Agent of all necessary information, the Rights Agent will keep or cause to be
kept, at an office designated for such purpose (the "Designated Office"), books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of this Agreement, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become null and void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder of the Rights evidenced thereby to
purchase a like number of Common Shares as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred (with, in the case of transfer, the form of assignment on the
reverse side thereof duly executed), split up, combined or exchanged at the
Designated Office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(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 Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights
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Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Each Right (other than Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) shall initially entitle the registered holder thereof to purchase one
Common Share, subject to adjustment from time to time as provided in Section 11
or 13 hereof. The purchase price (the "Purchase Price") for each Common Share
purchasable pursuant to the exercise of a Right shall initially be $25.00, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(b) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon surrender of the Right
Certificate evidencing such Rights, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the Designated Office
of the Rights Agent, together with payment of the Purchase Price for each Common
Share as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on the tenth anniversary of the Record Date (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly and properly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable tax or charge required to be paid by the
holder of the Rights evidenced by such Right Certificate in accordance with
Section 9 hereof by certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares certificates for the
number of Common Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts representing such
number of Common Shares as are to be purchased (in which case certificates for
the Common Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the
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order of the registered holder of the Rights evidenced by such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of the Rights evidenced by such Right
Certificate.
(d) In case the registered holder of the Rights evidenced by any
Right Certificate shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Rights or to his duly authorized assigns, subject to the provisions of Section
14 hereof.
(e) 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 to the Company such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or any Affiliate
or Associate thereof as the Company shall reasonably request. The Company shall
provide to the Rights Agent any such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or any Affiliate or Associate
thereof, and the Rights Agent shall be able to rely on such information as
provided in Section 18 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Common Shares. (a) The Company
covenants and agrees that it will take all such action as may be necessary to
ensure that all Common Shares delivered upon exercise of Rights shall, at the
time of delivery of the certificates for
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such Common Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(b) So long as the Common Shares (or other securities) issuable
upon the exercise of Rights may be listed on any national securities exchange or
automated quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all securities
reserved for such issuance to be listed on any such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of an event
described in Section 11(a)(ii) as of which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii), or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to the securities issuable
upon exercise of the Rights, (ii) to cause such registration statement to become
effective as soon as practicable after such filing and (iii) to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and
(B) the Final Expiration Date. 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 90 days
after the date set forth in clause 9(c)(i), 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 with prompt notice thereof to the Rights Agent stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement with prompt notice thereof to the Rights Agent at such time as the
suspension is no longer in effect. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities in
any jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such securities shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all the Common Shares (and/or other
securities) issuable upon exercise of Rights shall, at the time of delivery of
the certificates for such securities (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable.
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(e) The Company further covenants and agrees that it will pay when
due and payable any and all taxes and charges which may be payable in respect of
the issuance or delivery of the Rights or the Right Certificates or of any
Common Shares upon the exercise of Rights. The Company shall not, however, be
required to pay any tax or charge which may be payable in respect of any
transfer or delivery of Rights or Right Certificates to a Person other than, or
the issuance or delivery of certificates or depositary receipts for the Common
Shares in a name other than that of, the registered holder of the Rights
evidenced by Right Certificates surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Common Shares upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Rights at the time of
surrender of the related Right Certificates) or until it has been established to
the Company's reasonable satisfaction that no such tax or charge is due.
Section 10. Common Shares Record Date. Each Person in whose name
any Common Shares are issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such Common Shares on, and the
date of issuance of such Common Shares and the date of any certificate for such
Common Shares shall be, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable taxes or charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Shares transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and the date of issuance of such Common Shares and the
date of any such certificate shall be, the next succeeding Business Day on which
the Common Shares transfer books of the Company are open. Prior to the exercise
of any Rights, the holder thereof shall not be entitled to any rights of a
holder of Common 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 of Shares or
Number of Rights. The Purchase Price, the number of Common Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company at any time after the Record Date
(A) declares a dividend on the Common Shares payable in Common Shares, (B)
subdivides the outstanding Common Shares, (C) combines the outstanding Common
Shares into a smaller number of Common Shares or (D) issues any shares of its
capital stock in a reclassification of the Common Shares (including, without
limitation, any such
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reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right (except as otherwise provided herein) exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares transfer books of the 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; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, becomes an
Acquiring Person, each registered holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of Common Shares for which a Right is
then exercisable, in accordance with the terms of this Agreement, such number of
shares of Common Stock as shall equal the result obtained by dividing (x) the
product obtained by multiplying the then current Purchase Price by the number of
Common Shares for which a Right is then exercisable by (y) 50% of the then
current per share market price of the Common Stock (determined pursuant to
Section 11(d) hereof) on the date such Person became an Acquiring Person (such
number of shares of Common Stock, the "Adjustment Shares"). In the event that
any Person, alone or together with its Affiliates and Associates, shall become
an Acquiring Person and the Rights shall then be outstanding, the Company shall
not take any action which would eliminate or diminish the benefits intended to
be afforded by the Rights.
From and after the occurrence of such event, any Rights that are
or were acquired or beneficially owned by any Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) shall be null and void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that evidences Rights beneficially owned by an
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) whose
Rights would be void pursuant to the preceding sentence thereof and any Right
Certificate evidencing Rights beneficially owned by any such Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) shall be null and void;
no Right Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
whose Rights
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<PAGE>
would be null and void pursuant to the preceding sentence or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) whose Rights would be
null and void pursuant to the preceding sentence shall be canceled. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates and
Associates or any transferee of any of them hereunder. From and after the
occurrence of an event described in Section 13, any Rights that theretofore have
not been exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this Section
11(a)(ii).
(iii) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company will, upon the exercise of a Right and payment of the
applicable Purchase Price, (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 the second paragraph of Section 11(a)(ii)),
make adequate provision to substitute for the Adjustment Share (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock),
that the Board of Directors has deemed to have essentially the same rights,
privileges and preferences as Common Shares ("equivalent Common Shares")), (4)
debt securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been conclusively determined by the Board of Directors based
upon the advice of an investment banking firm selected by the Board of
Directors; provided, however, that if the Company has not made adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the first occurrence of an event described in Section 11(a)(ii), then the
Company will 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 or cash have an
aggregate value equal to the Spread. The term "Spread" means the excess of (i)
the Current Value over (ii) the Purchase Price. If the Board of Directors
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 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the occurrence of an event described
in Section 11(a)(ii), in order that the Company may seek shareholder approval
for the authorization of such additional shares (such 30-day period, as it may
be extended, being the "Substitution Period"). To the
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extent that action is to be taken pursuant to this Section 11(a)(iii), the
Company (1) will provide, subject to the second paragraph of Section 11(a)(ii),
that such action will 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 any required shareholder approval or to
decide the appropriate form of distribution to be made and the value thereof. In
the event of any such suspension, the Company will 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 no longer remains
in effect in each case, with prompt notice thereof to the Rights Agent. For
purposes of this Section 11(a)(iii), the Current Value of each Adjustment Share
will be the current per share market price of a Common Share (as defined in
Section 11(d)) on the effective date of the occurrence of an event described in
Section 11(a)(ii) and the per share or per unit value of any equivalent Common
Share will be deemed to equal the current per share market price of a Common
Share on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares (or equivalent Common Shares) or
securities convertible into Common Shares or equivalent Common Shares at a price
per Common Share or equivalent Common Share (or having a conversion price per
share, if a security convertible into Common Shares or equivalent Common Shares)
less than the then current per share market price (as defined in Section 11(d))
of the Common Shares on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent Common Shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Common Shares outstanding on such record date plus
the number of additional Common Shares and/or equivalent Common Shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be 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. Common Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
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<PAGE>
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Common Shares) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Common Shares on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to but not including
such date; provided, however, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares, or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after but not including
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such case,
the current per share market price shall be appropriately adjusted to reflect
the current market price per share equivalent of such Security; and provided,
further, that in the event that the current per share market price of
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<PAGE>
the shares of Common Stock is determined as of a date prior to the expiration of
30 Trading Days following the Record Date, the current per share market price of
the Common Stock shall be deemed to be the average of the daily closing prices
per share of Common Stock for the period of Trading Days commencing with the
Record Date and ending immediately prior to such date. The closing price of a
Security 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 American Stock Exchange or, if the Security is not listed or
admitted to trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by The Nasdaq Stock Market, Inc. National Market System ("Nasdaq")
or such other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Common Shares are not
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share 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 conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-hundredth of a
Common Share. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
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(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Common Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Common Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the 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 Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Common Shares (calculated to the nearest one one-hundredth of a Common Share)
obtained by (i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one one-hundredth) 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 with prompt notice
thereof to the Rights Agent. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon
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each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to registered
holders of Rights on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such registered holders in substitution and replacement for
the Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the registered holders of the Rights on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Common Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares 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
Common Shares 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 with prompt notice thereof to
the Rights Agent until the occurrence of such event the issuing to the
registered holder of any Right exercised after such record date of the Common
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Common Shares 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 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 it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Shares, issuance
wholly for cash of any Common Shares at
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less than the current market price, issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for Common
Shares, dividends on Common Shares payable in Common Shares or issuance of
rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Common Shares shall not be taxable to such
shareholders.
(n) In the event that at any time after the Record Date and prior
to the Distribution Date, the Company shall (i) declare or pay any dividend on
the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (A) the number of Common
Shares purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of Common Shares so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(o) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine with or
(ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to 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 other Person or
Persons if (x) at the time of or immediately after such consolidation, merger,
combination or sale there are any rights, warrants or other instruments or
securities outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, combination or sale, the shareholders of a Person
who constitutes, or would constitute, the "Principal Party" for the purposes of
Section 13 shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(p) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such
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<PAGE>
action will substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computations accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Common Shares a copy of such certificate and (c) mail a
brief summary thereof to each registered holder of a Right in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no duty
with respect to and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event, directly or indirectly, at any time after a
Person, alone or together with its Affiliates and Associates, has become an
Acquiring Person, (x) the Company shall consolidate with, merge into or
otherwise combine with, any other Person, (y) any Person shall consolidate with,
merge into or otherwise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination and, in
connection with such merger or combination, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) 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 or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly owned Subsidiaries, then, and in each such case,
proper provision shall be promptly made so that
(i) each registered holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of Common Shares
for which a Right is then exercisable, in accordance with the terms of
this Agreement, such number of duly authorized, validly issued, fully
paid and nonassessable freely tradable Common Shares of the Principal
Party (as hereinafter defined), not subject to any rights of first
refusal, liens, encumbrances or other claims, as shall equal the result
obtained by dividing (A) the product obtained by multiplying the then
current Purchase Price by the number of Common Sharers for which a
Right is then exercisable by (B) 50% of the then current per share
market price of the Common Shares of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, combination, sale or transfer;
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provided, however, that the Purchase Price (as so adjusted pursuant to
the foregoing clause (i)(A)) and the number of shares of Common Stock
of such Principal Party so receivable upon exercise of a Right shall be
subject to further adjustment as appropriate in accordance with Section
11(f) to reflect any events occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation,
merger, combination, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, 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; and
(iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to its Common Shares thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x)
or (y), the Person that is the issuer of any securities into which
Common Shares of the Company are converted in such merger,
consolidation or combination, and if no securities are so issued, the
Person that survives or results from such merger, consolidation or
combination; and
(ii) in the case of any transaction described in Section 13(a)(z),
the person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction or
transactions; provided that in any such case, (A) if the Common Shares
of such Person are not at such time and has not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; and (B)
in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest
aggregate market value.
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(c) The Company shall not consummate any such consolidation,
merger, combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares which are not outstanding or
otherwise 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 Sections 13(a) and
13(b) and providing that, as soon as practicable after the date of any
consolidation, merger, combination, sale or transfer mentioned in Section 13(a);
the Principal Party will:
(i) prepare and file a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the
Rights, and will use its best efforts to cause such registration
statement (A) to become effective as soon as practicable after such
filing and (B) to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Final
Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the American Stock Exchange or, if the Rights are not listed or
admitted to trading on the American Stock Exchange, as
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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 Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company may
pay to the registered holders of Rights at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one Common Share. For the purposes of this Section 14(b), the
current market value of a Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of the Right,
expressly waives his right to receive any fractional Rights or any fractional
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, excepting the rights of action given to the Rights Agent under
this Agreement, are vested in the respective registered holders of the Right
Certificate and any registered holder of any Right Certificate, without the
consent of the Rights Agent or of the holder of any other Right, may, in his or
her own behalf and for his or her 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 or her right to exercise the Rights registered
in his or her name in the manner provided in the Right Certificates and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
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Section 16. Agreement of Right 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 the Common Shares;
(b) after the Distribution Date, the Rights are transferable only
on the registry books of the Rights Agent upon surrender of the Right
Certificates evidencing such Rights at the Designated Office of the
Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the person in whose name the Right is registered as
the absolute owner thereof (notwithstanding any notations of ownership
or writing on the Right Certificates evidencing such Rights or any
certificate for the associated Common Shares made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary, except as required by law.
(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 that 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. Right Holder Not Deemed a Shareholder. No holder, as
such, of any Right shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Common Shares or any other securities of the
Company which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or to
receive
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dividends or subscription rights, or otherwise, until such Right or Rights shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. 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 other disbursements incurred in the execution,
delivery, administration and amendment 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, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for any action taken, suffered 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 arising
therefrom. The indemnity provided herein shall survive until the later of March
19, 2019 or upon the expiration of all applicable statutes of limitation.
Anything to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect, consequential or incidental 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.
The Rights Agent shall be authorized and protected and shall incur
no liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Common Shares 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 written advice of counsel as set forth
in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any Person into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent
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and deliver such Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases the Rights evidenced by such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases the Rights evidenced by such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
only the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the written advice or opinion of
such counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken, suffered or omitted by it in
good faith and in accordance with such written advice or 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 per share market price) be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one
of the Chairman of the Board, the Chief Executive Officer, any Vice
President, the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization
and protection 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.
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(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice pursuant to Section 12 that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Common Shares will, when issued, be
validly authorized and issued, fully paid and 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 any one of the Chairman of the Board, the Chief Executive Officer,
any Vice President, the Secretary or the 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, suffered
or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Company
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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 and/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 omission of, the Rights Agent in
accordance with a proposal included in any such application on or after
the date specified in such application (which date shall not be less
than five Business Days after the date any officer of the 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 specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the 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 Person.
(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 reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has not been completed to certify
that the holder is not an Acquiring Person (or an Affiliate or
Associate thereof), the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
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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 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Common Shares by registered or certified
mail, and to the registered holders of the Rights by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 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 Shares or Common Shares by
registered or certified mail, and to the registered holders of the Rights 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 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 registered holder of a Right (who shall,
with such notice, submit his or her Right Certificate, if any, or his or her
certificate, if any, for the associated Common Shares for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a Person, or an affiliate of such a Person, 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, that is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. 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 Shares, and mail a notice thereof in writing to the registered
holders of the Rights. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Right Certificates to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase
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Price and the number or kind or class of shares or other securities or property
purchasable upon exercise of a Right made in accordance with the provisions of
this Agreement.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person, alone or
together with its Affiliates and Associates, becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, 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"). The redemption
of the Rights by the Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights, the Company shall mail a notice of redemption to
the Rights Agent and to all the registered holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company
may, at its option, at any time after any Person, alone or together with its
Affiliates or Associates, becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 11(a)(ii)
hereof) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the Record Date (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the
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foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after the occurrence of an event described in Section 13.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (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 the
holders 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 with prompt notice to the Rights Agent; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall promptly mail a notice of any such exchange to
all of the registered holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the shares of 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 null and void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights or shall take
such other action specified in Section 11(a)(iii) hereof.
(d) 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, the Company
shall pay to the registered holders of the Rights 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 paragraph (d), 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 at any time
after the Record Date the Company shall propose (i) to pay any dividend payable
in stock of any
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class to the holders of its Common Shares or to make any other distribution to
the holders of its Common Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Common Shares rights or warrants to
subscribe for or to purchase any additional Common Shares or shares of stock of
any class or any other securities, rights or options, (iii) to effect any
reclassification of its Common Shares (other than a reclassification involving
only the subdivision of outstanding Common Shares), (iv) to effect any
consolidation, merger into or combination with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to each
registered holder of a Right Certificate and the Rights Agent, in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, combination, sale, transfer, liquidation, dissolution, or winding up is
to take place and the date of participation therein by the holders of the Common
Shares and/or Common Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of the Common
Shares for purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares, whichever
shall be the earlier. The failure to give notice required by this Section 25 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate, and the Rights Agent, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
32
<PAGE>
Merrimac Industries, Inc.
41 Fairfield Place
West Caldwell, New Jersey 07006
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right to or on the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street
10th Floor
New York, New York 10001
Attention: Yvonne Benn
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate or Right
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 or the registry books of the holders of the Rights
maintained by the Rights Agent after the Distribution Date as herein provided.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights or
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that from
and after such time as any Person, alone or together with its Affiliates or
Associates, becomes an Acquiring Person, this Agreement shall not be amended in
any manner which would (a) adversely affect the interests of the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), (b) cause this Agreement again to become amendable other than
in accordance with this sentence, or (c) cause the Rights again to become
redeemable. 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 Section 27, and such supplement or amendment does
not change or increase the Rights Agent's duties, liabilities or obligations in
any material respect, the Rights Agent shall execute such supplement or
amendment.
33
<PAGE>
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, etc. For all
purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) under the Exchange Act. The Board 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 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 exchange or not to redeem or
exchange the Rights or to amend the Agreement).
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 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.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to
34
<PAGE>
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
MERRIMAC INDUSTRIES, INC.
By /s/ Mason N. Carter
-------------------------------
Name: Mason N. Carter
Title: Chairman and Chief Executive
Officer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Rights
Agent
By /s/ Laura R. Picone
-------------------------------
Name: Laura R. Picone
Title: Vice President
35
<PAGE>
Exhibit A
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER MARCH 19, 2009 OR EARLIER IF
REDEEMED OR EXCHANGED AS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS
OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BE NULL AND VOID.
Right Certificate
Merrimac Industries, Inc.
This certifies that ________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of March 9, 1999 (the "Rights Agreement"),
between Merrimac Industries, Inc., a New Jersey corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., New York City
time, on March 19, 2009 at the designated office of the Rights Agent, or at the
office of its successor as Rights Agent, one fully paid, nonassessable share of
Common Stock, par value $.50 per share, (the "Common Shares"), of the Company,
at a purchase price of $25.00 per one share of a Common Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of Common Shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of March 19, 1999, based on the Common Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of Common Shares which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights. Copies of the
Rights Agreement are on file at the principal executive offices of the Company
and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If the
Rights evidenced by this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for Common Shares or shares of other securities of the Company.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but, in lieu thereof, a cash payment
will be made, as provided in the Rights Agreement.
No holder of Rights evidenced by this Right Certificate shall
be entitled to vote or receive dividends or be deemed for any purpose the holder
of the Common Shares or of any other securities of the Company which may at any
time be issuable on the exercise thereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder of any Rights
evidenced hereby, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________.
MERRIMAC INDUSTRIES, INC.
By:
-------------------------
Name:
Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
By:
------------------------------------
Name:
Title:
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights evidenced by this Right
Certificate.)
FOR VALUE RECEIVED _______________________________ hereby
sells, assigns and transfers unto ___________________
________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
__________________ attorney, to transfer the said Rights on the books of the
within-named Company, with full power of substitution.
Dated:
------------------
---------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States, in each case, participating in a Medallion
program approved by the Securities Transfer Association, Inc.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not being assigned by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement). In addition, the undersigned hereby
certifies that after due inquiry and to the best knowledge of the undersigned,
the undersigned 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.
---------------------------
Signature
- --------------------------------------------------------------------------------
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To: Merrimac Industries, Inc.
The undersigned hereby irrevocably elects to exercise
___________________ Rights evidenced by this Right Certificate to purchase the
Common Shares issuable upon the exercise of such Rights and requests that
certificates for such Common Shares be issued in the name of:
-------------------------------
| |
Please insert social security | |
or other identifying number | |
-------------------------------
- ------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
-------------------------------
| |
Please insert social security | |
or other identifying number | |
-------------------------------
- ------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------
Dated:
------------------
----------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States, in each case, participating in a Medallion program approved
by the Securities Transfer Association, Inc.
- ------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not being exercised by or on behalf of any Person who
is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement). In addition, the undersigned hereby
certifies that after due inquiry and to the best knowledge of the undersigned,
the undersigned 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.
---------------------------
Signature
- ------------------------------------------------------------------------
NOTICE
------
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
<PAGE>
Exhibit B
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID.
SUMMARY OF RIGHTS
-----------------
MERRIMAC INDUSTRIES, INC.
SHAREHOLDER RIGHTS PLAN
Summary of Terms
Form of Security The Board has declared a dividend of one
common stock purchase right for each
outstanding share of the Company's
Common Stock, payable to holders of
record as of the close of business on
March 19, 1999 (each a "Right" and
collectively, the "Rights").
Transfer Prior to the Distribution Date, the
Rights will be evidenced by the
certificates for and will be transferred
with the Common Stock, and the
registered holders of the Common Stock
will be deemed to be the registered
holders of the Rights. After the
Distribution Date, the Company will send
or cause to be sent by mail, separate
certificates evidencing the Rights to
each record holder of the Common Stock
as of the close of business on the
Distribution Date, and thereafter the
Rights will be transferable separately
from the Common Stock.
Distribution Date Distribution Date generally means the
earlier of: (i) the 10th day after
public announcement that any person or
group has become the beneficial owner of
10% or more of the Company's Common
Stock; and (ii) the 10th business day
after the date of the commencement of,
or the announcement of an intention to
commence, a tender or exchange offer by
any person which would, if consummated,
result in such person becoming the
beneficial owner of 10% or more of the
Company's Common Stock.
Exercise Prior to the Distribution Date, the
Rights will not be exercisable.
After the Distribution Date, prior to
the occurrence of an event described
below under "Flip-In" and "Flip-Over",
each Right will be exercisable to
purchase for $25.00 (the "Purchase
Price"), one share of Common Stock.
"Flip-In" Subject to certain exceptions, if any
person or group (an "Acquiring Person")
becomes the beneficial owner of 10% or
more of the Company's Common Stock, then
each Right (other than Rights
beneficially owned by the Acquiring
Person and certain affiliated persons)
will entitle the holder to purchase, for
the Purchase Price, a number of shares
of the Company's Common Stock having a
market value of twice the Purchase
Price.
"Flip-Over" If, after any person has become an
Acquiring Person, (1) the Company is
involved in a merger or other business
combination in which the Company is not
the surviving corporation or its Common
Stock is exchanged for other securities
or assets or (2) the Company and/or one
or more of its subsidiaries sell or
otherwise transfer assets or earning
power aggregating more than 50% of the
assets or earning power of the Company
and its subsidiaries, taken as a whole,
then each Right (other than Rights
beneficially owned by the Acquiring
Person and certain affiliated persons)
will entitle the holder to purchase, for
the Purchase Price, a number of shares
of common stock of the other party to
such business combination or sale (or in
certain circumstances, an affiliate)
having a market value of twice the
Purchase Price.
Exchange At any time after any person has become
an Acquiring Person (but before any
person becomes the beneficial owner of
50% or more of the Company's Common
Stock), the Board may exchange all or
part of the Rights (other than the
Rights beneficially owned by the
Acquiring Person and certain affiliated
persons) for shares of Common Stock at
an exchange ratio of one share of Common
Stock for each Right.
Redemption The Board may redeem all of the Rights
at a price of $0.01 per Right at any
time prior to the time that any person
becomes an Acquiring Person.
Expiration The Rights will expire on March 19, 2009
unless earlier exchanged or redeemed.
Amendments For so long as the Rights are
redeemable, the Rights Agreement may be
amended in any respect.
At any time after the Rights are no
longer redeemable, the Rights Agreement
may not be amended in any respect that
would adversely affect the Rights
holders (other than any Acquiring Person
and certain affiliated persons) or cause
the Rights again to become redeemable.
Voting Rights A Rights holder has no rights as a
shareholder of the Company, including
the right to vote and to receive
dividends, until such Rights holder
exercises its Rights.
Antidilution Provisions The Rights Agreement includes standard
antidilution provisions designed to
protect the efficacy of the Rights.
Taxes While the dividend of the Rights will
not be taxable to shareholders or to the
Company, shareholders or the Company
may, depending upon the circumstances,
recognize taxable income in the event
that the Rights become exercisable as
set forth above.
------------------
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, as amended from time to time,
the complete terms of which are hereby incorporated by reference.
Exhibit 2
Merrimac Adopts Shareholder Rights Plan
West Caldwell, N.J., March 9, 1999: Merrimac Industries, Inc. (the "Company")
announced today that its Board of Directors adopted a Shareholder Rights Plan
designed to enhance the Board's ability to protect shareholders against, among
other things, unsolicited attempts to acquire control of the Company that do not
offer an adequate price to all shareholders or are otherwise not in the best
interests of the Company and its shareholders.
Chairman and CEO Mason N. Carter commented: "The adoption of the Rights Plan is
intended as a means to guard against abusive takeover tactics and enable all the
Merrimac shareholders to realize the long-term value of their investment in the
Company. While the Board is not aware of any specific effort to acquire control
of Merrimac Industries, we believe the Rights Plan is appropriate given the
current takeover environment. The Shareholder Rights Plan should encourage
anyone seeking to acquire Merrimac Industries to negotiate with the Board prior
to attempting a takeover."
Under the Rights Plan, each common shareholder at the close of business on
March 19, 1999 will receive a dividend of one right for each share held of
Common Stock, par value $.50 per share ("Common Stock"), of the Company. Each
right entitles the holder to purchase from the Company one share of Common Stock
of the Company at an initial purchase price of $25.00.
Initially the rights will be represented by the Company's Common Stock
certificates and will not be exercisable. The rights will become exercisable
after any person has become the beneficial owner of 10% or more of the Company's
Common Stock or has commenced a tender or exchange offer which, if consummated,
would result in any person becoming the beneficial owner of 10% or more of the
Common Stock of the Company.
If any person becomes the beneficial owner of 10% or more of the Company's
Common Stock, each right will entitle the holder, other than the acquiring
person, to purchase for the purchase price Company Common Stock having a value
of twice the purchase price.
If, following an acquisition of 10% or more of the Company's Common Stock, the
Company is involved in certain mergers or other business combinations or sells
or transfers more than 50% of its assets or earning power, each right will
entitle the holder to purchase for the purchase price common stock of the other
party to such transaction having a value of twice the purchase price.
At any time after a person has acquired 10% or more (but before any person has
acquired more than 50%) of the Company's Common Stock, the Company may exchange
all or part of the rights for shares of Common Stock at an exchange ratio of one
share of Common Stock per right.
The Company may redeem the rights at a price of $.01 per right at any time prior
to the time that any person has become the beneficial owner of 10% or more of
the Common Stock of the Company. The rights will expire on March 9, 2009 unless
earlier exchanged or redeemed.
Certain statements in this news release are forward-looking statements based on
current management expectations and are subject to risks and uncertainties.
Factors that could cause future results to differ from these expectations
include general economic and industry conditions, competitive products and
pricing pressures, risks relating to governmental regulatory actions in
communications and defense programs, and inventory risks due to technological
innovation. Additional factors to which the Company's performance is subject are
described in the Company's reports filed from time to time with the Securities
and Exchange Commission.
Merrimac Industries, Inc., with locations in West Caldwell, NJ and San Jose,
Costa Rica, and, as a result of its recent acquisition of Filtran Microcircuits
Inc., Ottawa, Ontario, Canada, an industry leader in gold plating of high
frequency microstrip, bonded stripline and thick metal-backed Teflon (PTFE)
micro circuitry, has approximately 220 co-workers in the design and manufacture
of signal processing components, micro-multifunction modules (MMFM(TM)) and
subsystems providing Total Integrated Packaging Solutions for high-performance,
mission-critical applications in communications, defense, and aerospace markets.
Merrimac (MRM) is listed on the American Stock Exchange.
Contact: Mason N. Carter Fax: (973) 882-5989
Chairman and CEO Email: [email protected]
Phone: (973) 575-1300, Ext. 202 Internet: http://www.merrimacind.com
Note: Merrimac Industries, Inc. news releases are available in fax form by
calling Company News On-Call. Dial (800) 758-5804, ext. 567525. These news
releases are also available on the Internet at: http://www.prnewswire.com.
Exhibit 3
AMENDED AND RESTATED BY-LAWS
OF MERRIMAC INDUSTRIES, INC.
Section 1. LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS
1.1. These by-laws are subject to the certificate of incorporation
of the corporation. In these by-laws, references to law, the certificate of
incorporation and by-laws mean the law, the provisions of the certificate of
incorporation and the by-laws as from time to time in effect.
Section 2. SHAREHOLDERS
2.1. Annual Meeting. The annual meeting of shareholders shall be
held at the principal office of the Corporation, or at such other place within
or without the State of New Jersey, and at such time, as shall be determined by
the board of directors, on the last Thursday in April of each year, or on such
other day as the board of directors may designate. Such annual meeting shall be
held for the purpose of electing directors, and for the transaction of such
other business as may be required by law or these by-laws or as may properly
come before the meeting.
2.2. Special Meetings. A special meeting of the shareholders may
be called at any time by the president or by a majority of the board of
directors. It shall also be the duty of the president, or in his absence, the
duty of a vice president, to call such special meetings whenever so requested in
writing by shareholders owning a majority of the shares of capital stock
entitled to vote at such meeting. At any such special meeting only such business
may be transacted which is related to the purpose or purposes set forth in the
notice thereof. Any such call shall state the place, date, hour, and purposes of
the meeting.
2.3. Place of Meeting. All meetings of the shareholders for the
election of directors or for any other purpose shall be held at such place
within or without the State of New Jersey as may be determined from time to time
by the board of directors. Any adjourned session of any meeting of the
shareholders shall be held at the place designated in the vote of adjournment.
2.4. Notice of Meetings. Except as otherwise provided by law, a
written notice of each meeting of shareholders stating the place, day and hour
thereof and, in the case of a special meeting, the purposes for which the
meeting is called, shall be given not less than ten nor more than sixty days
before the meeting, to each shareholder entitled to vote thereat, and to each
shareholder who, by law, by the certificate of incorporation or by these
by-laws, is entitled to notice, by leaving such notice with him or at his
residence or usual place of business, or by depositing it in the United States
mail, postage prepaid, and addressed to such shareholder at his address as it
appears in the records of the corporation (or at such other address as such
shareholder requests in writing to the secretary of the corporation). If mailed,
such notice shall be deemed as given when deposited in the United States mail in
the manner provided above. Such notice shall be given by the secretary, or by an
officer or person designated by the board of directors, or in the case of a
special meeting by the officer calling the meeting. As to any adjourned session
of any meeting of shareholders, notice of the adjourned meeting need not be
given if the time and place thereof are announced at the meeting at which the
adjournment was taken except that if after the adjournment a new record date is
set for the adjourned session, notice of any such adjourned session of the
meeting shall be given in the manner heretofore described. No notice of any
meeting of shareholders or any adjourned session thereof need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
or such adjourned session by such shareholder, in person or by proxy, is filed
with the records of the meeting or if the shareholder attends such meeting, in
person or by proxy, without objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the shareholders or any adjourned session thereof need be specified
in any written waiver of notice.
2.5. Quorum of Shareholders. At any meeting of the shareholders a
quorum as to any matter shall consist of a majority of the votes entitled to be
cast on the matter, except where a larger quorum is required by law, by the
certificate of incorporation or by these by-laws. Any meeting may be adjourned
from time to time by a majority of the votes properly cast upon the question,
whether or not a quorum is present. If a quorum is present at an original
meeting, a quorum need not be present at an adjourned session of that meeting.
Shares of its own stock belonging to the corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held, directly or indirectly, by the corporation,
shall neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of any corporation to vote
stock, including but not limited to its own stock, held by it in a fiduciary
capacity.
2.6. Action by Vote. When a quorum is present at any meeting, a
plurality of the votes properly cast for election to any office shall elect to
such office and a majority of the votes properly cast upon any question other
than an election to an office shall decide the question, except when a larger
vote is required by law, by the certificate of incorporation or by these
by-laws. No ballot shall be required for any election unless requested by a
shareholder present or represented at the meeting and entitled to vote in the
election.
2.7. Proxy Representation. Every shareholder may authorize another
person or persons to act for him by proxy in all matters in which a shareholder
is entitled to participate, whether by waiving notice of any meeting, objecting
to or voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the shareholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after eleven months from
its date unless such proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and, if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. The authorization of a proxy may but need
not be limited to specified action, provided, however, that if a proxy limits
its authorization to a meeting or meetings of shareholders, unless otherwise
specifically provided such proxy shall entitle the holder thereof to vote at any
adjourned session but shall not be valid after the final adjournment thereof.
2.8. Inspectors. The directors or the person presiding at the
meeting may, but need not, appoint one or more inspectors of election and any
substitute inspectors to act at the meeting or any adjournment thereof. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors, if
any, shall determine the number of shares of stock outstanding and the voting
power of each, the shares of stock represented at the meeting, the existence of
a quorum, the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all shareholders. On request of the person
presiding at the meeting, the inspectors shall make a report in writing of any
challenge, question or matter determined by them and execute a certificate of
any fact found by them.
2.9. List of Shareholders. The secretary shall prepare and make,
at least ten days before every meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each shareholder and the number of shares registered
in his name. The stock ledger shall be the only evidence as to who are
shareholders entitled to examine such list or to vote in person or by proxy at
such meeting.
2.10. Notice of Shareholder Business and Nominations.
(a) Annual Meetings of Shareholders. (1) Nominations of persons
for election to the Board of Directors of the Corporation and the proposal of
business to be considered by the shareholders may be made at an annual meeting
of shareholders (i) pursuant to the Corporation's notice of meeting, (ii) by or
at the direction of the Board of Directors or (iii) by any shareholder of the
Corporation who was a shareholder of record at the time of giving of notice
provided for in this by-law, who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this by-law.
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of paragraph
(a)(1) of this by-law, the shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
shareholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a shareholder's notice as described above. Such shareholder's
notice shall set forth (i) as to each person whom the shareholder proposes to
nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Rule 14a-11 thereunder (including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected); (ii) as to any other business that the
shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (x) the name
and address of such shareholder, as they appear on the Corporation's books, and
of such beneficial owner and (y) the class and number of shares of the
Corporation which are owned beneficially and of record by such shareholder and
such beneficial owner.
(b) Special Meetings of Shareholders. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of shareholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (i) by or at the direction of the Board of
Directors or (ii) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareholder of the
Corporation who is a shareholder of record at the time of giving of notice
provided for in this by-law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this by-law. In the event
the Corporation calls a special meeting of shareholders for the purpose of
electing one or more directors to the Board of Directors, any such shareholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
shareholder's notice required by paragraph (a)(2) of this by-law shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a shareholder's notice as described
above.
(c) General. (1) Only such persons who are nominated in accordance
with the procedures set forth in this by-law shall be eligible to serve as
directors and only such business shall be conducted at a meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this by-law. Except as otherwise provided by law, the Certificate
of Incorporation or these by-laws, the Chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this by-law and, if any proposed
nomination or business is not in compliance with this by-law, to declare that
such defective proposal or nomination shall be disregarded.
(2) For purposes of this by-law, "public announcement" shall
include, without limitation, disclosure in a press release reported by the Dow
Jones News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this by-law,
a shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this by-law. Nothing in this by-law shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 3. BOARD OF DIRECTORS
3.1. Number. The number of directors which shall constitute the
whole board shall be determined by resolution adopted by a majority of the whole
board of directors, provided that such number shall not be less than three.
Until otherwise determined by such resolution, the Board of Directors shall
consist of five directors. The number of directors may be decreased to any
number permitted by the foregoing at any time by the directors by vote of a
majority of the directors then in office, provided that no decrease shall have
the effect of reducing the term of any director. Directors shall be at least
eighteen years of age but need not be shareholders.
3.2. Tenure. Except as otherwise provided by law, by the
certificate of incorporation or by these by-laws, each director shall hold
office until the next annual meeting and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed or becomes disqualified.
3.3. Powers. The business and affairs of the corporation shall be
managed under the direction of the board of directors who shall have and may
exercise all the powers of the corporation and do all such lawful acts and
things as are not by law, the certificate of incorporation or these by-laws
directed or required to be exercised or done by the shareholders.
3.4. Vacancies. Vacancies and any newly created directorships
resulting from any increase in the number of directors may be filled by vote of
the shareholders at a meeting called for the purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the board, effective at a
future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the certificate of incorporation or of
these by-laws as to the number of directors required for a quorum or for any
vote or other actions.
3.5. Committees. The board of directors may, by vote of a majority
of the entire board, (a) designate, change the membership of or terminate the
existence of any committee or committees, each committee to consist of three or
more of the directors; (b) designate one or more directors as alternate members
of any such committee who may replace any absent or disqualified member at any
meeting of the committee; and (c) determine the extent to which each such
committee shall have and may exercise the powers of the board of directors in
the management of the business and affairs of the corporation, including the
power to authorize the seal of the corporation to be affixed to all papers which
require it and the power and authority to declare dividends or to authorize the
issuance of stock; excepting, however, such powers which by law, by the
certificate of incorporation or by these by-laws they are prohibited from so
delegating. In the absence or disqualification of any member of such committee
and his alternate, if any, the member or members thereof present at any meeting
and not disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Committees
established by the board of directors may meet either regularly at stated times
or specially on notice given twenty-four hours in advance by any member thereof
by mail, telegram, telephone or in person to all the other members thereof; but
no notice of any regular meeting need be given; and no notice of any special
meeting need be given to members who shall be present or to absent members who
shall waive notice in writing before or after such meeting. Such committees may
make rules for the holding and conduct of their meetings and may appoint such
sub-committees and assistants as they from time to time may deem necessary. The
number of regular and alternate members present, if equal to at least a majority
of the regular members of a committee, shall constitute a quorum and the action
of a majority of those present at a meeting at which a quorum is present and
acting shall be the act of a committee.
3.6. Regular Meetings. Regular meetings of the board of directors
may be held without call or notice at such places within or without the State of
New Jersey and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the same
place as the annual meeting of shareholders.
3.7. Special Meetings. Special meetings of the board of directors
may be held at any time and at any place within or without the State of New
Jersey designated in the notice of the meeting, when called by the chairman of
the board, the president, or by one-third or more in number of the directors,
reasonable notice thereof being given to each director by the secretary or by
the chairman of the board, the president or any one of the directors calling the
meeting.
3.8. Notice. It shall be reasonable and sufficient notice to a
director to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to him at his usual or last
known business or residence address or to give notice to him in person or by
telephone at least twenty-four hours before the meeting. Notice of a meeting
need not be given to any director if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
director who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. Neither notice of a meeting nor a waiver
of a notice need specify the purposes of the meeting.
3.9. Quorum. Except as may be otherwise provided by law, by the
certificate of incorporation or by these by-laws, at any meeting of the
directors a majority of the directors then in office shall constitute a quorum;
a quorum shall not in any case be less than one-third of the total number of
directors constituting the whole board. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
3.10. Action by Vote. Except as may be otherwise provided by law,
by the certificate of incorporation or by these by-laws, when a quorum is
present at any meeting the vote of a majority of the directors present shall be
the act of the board of directors.
3.11. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the board of directors or a committee thereof may
be taken without a meeting if all the members of the board or of such committee,
as the case may be, consent thereto in writing, and such writing or writings are
filed with the records of the meetings of the board or of such committee. Such
consent shall be treated for all purposes as the act of the board or of such
committee, as the case may be.
3.12. Participation in Meetings by Conference Telephone. Members
of the board of directors, or any committee designated by such board, may
participate in a meeting of such board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other or by any other means permitted
by law. Such participation shall constitute presence in person at such meeting.
3.13. Compensation. In the discretion of the board of directors,
each director may be paid such fees for his services as director and be
reimbursed for his reasonable expenses incurred in the performance of his duties
as director as the board of directors from time to time may determine. Nothing
contained in this section shall be construed to preclude any director from
serving the corporation in any other capacity and receiving reasonable
compensation therefor.
3.14. Interested Directors and Officers.
(a) No contract or transaction between the corporation and one or
more of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of the corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if any one of the following is true:
(1) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(2) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the shareholders; or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the board of
directors, a committee thereof, or the shareholders.
(b) Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the board of directors or of a
committee which authorizes the contract or transaction.
Section 4. OFFICERS AND AGENTS
4.1. Enumeration; Qualification. The executive officers of the
corporation shall be a chairman, a president, one or more vice presidents, a
treasurer, a secretary and such other officers, if any, as the board of
directors from time to time may in its discretion elect or appoint. The
corporation may also have such agents, if any, as the board of directors from
time to time may in its discretion choose. Any officer may be but none need be a
director or shareholder. Any two or more offices may be held by the same person,
except that the same person shall not serve both as President and Secretary. Any
officer may be required by the board of directors to secure the faithful
performance of his duties to the corporation by giving bond in such amount and
with sureties or otherwise as the board of directors may determine.
4.2. Powers. Subject to law, to the certificate of incorporation
and to the other provisions of these by-laws, each officer shall have, in
addition to the duties and powers herein set forth, such duties and powers as
are commonly incident to his office and such additional duties and powers as the
board of directors may from time to time designate.
4.3. Election. The officers may be elected by the board of
directors at their first meeting following the annual meeting of the
shareholders or at any other time. At any time or from time to time the
directors may delegate to any officer their power to elect or appoint any other
officer or any agents.
4.4. Tenure. Each officer shall hold office until the first
meeting of the board of directors following the next annual meeting of the
shareholders and until his respective successor is chosen and qualified unless a
shorter period shall have been specified by the terms of his election or
appointment, or in each case until he sooner dies, resigns, is removed or
becomes disqualified. Each agent shall retain his authority at the pleasure of
the directors, or the officer by whom he was appointed or by the officer who
then holds agent appointive power.
4.5. Chairman of the Board of Directors, President and Vice
President. The chairman of the board shall have such duties and powers as shall
be designated from time to time by the board of directors. Unless the board of
directors otherwise specifies, the chairman of the board, or if there is none
the chief executive officer, shall preside, or designate the person who shall
preside, at all meetings of the shareholders and of the board of directors.
Unless the board of directors otherwise specifies, the president shall be the
chief executive officer of the corporation and shall have direct charge of all
business operations of the corporation and, subject to the control of the
directors, shall have general charge and supervision of the business of the
corporation.
The vice presidents, one or more of whom may be designated
executive vice president or senior vice president, shall have such duties and
powers as shall be set forth in these by-laws or as shall be designated from
time to time by the board of directors or by the president. In the absence or
inability to act of the president, the duties of the president and chairman of
the board shall be performed by the vice presidents in the order of priority
established by the board unless and until the board of directors shall otherwise
direct.
4.6. Treasurer and Assistant Treasurers. The treasurer shall be
the chief financial officer of the corporation and shall be in charge of its
books of account, accounting records and accounting procedures. He shall be
responsible for the verification of all of the assets of the corporation and the
preparation of all tax returns and other financial reports to governmental
agencies by the corporation. He shall also have the care and custody of the
funds and securities of the corporation, sign checks, drafts, notes and orders
for the payment of money, pay out and dispose of the funds and securities of the
corporation and in general perform the duties customary to the office of
treasurer. The treasurer may have such additional duties and powers as may be
designated from time to time by the board of directors or the president. He
shall be responsible to and shall report to the board of directors but in the
ordinary conduct of the corporation's business shall be under the supervision of
the president or such other officer as the board of directors shall designate.
Any assistant treasurers shall have such duties and powers as
shall be designated from time to time by the board of directors, the president
or the treasurer.
4.7. Secretary and Assistant Secretaries. The secretary shall (a)
keep the minutes of the meetings of the board of directors, the shareholders and
any committee designated by the board of directors; (b) see that all required
notices of meetings of the directors, shareholders and members of such
committees are duly given in accordance with the provisions of these by-laws or
as required by law; and (c) have custody of the seal of the corporation and
affix and attest the same to all instruments requiring the seal when authorized
by the board of directors or the president. He shall also have charge of the
corporate records and such books and papers as the board of directors may
specify and shall perform all other duties incident to the office of secretary
or which may be assigned to him from time to time by the board of directors or
the president. In the absence of the secretary from any meeting, an assistant
secretary, or if there be none or he is absent, a temporary secretary chosen at
the meeting, shall record the proceedings thereof. Unless a transfer agent has
been appointed the secretary shall keep or cause to be kept the stock and
transfer records of the corporation, which shall contain the names and record
addresses of all shareholders and the number of shares registered in the name of
each shareholder. He shall have such other duties and powers as may from time to
time be designated by the board of directors or the president.
Any assistant secretaries shall have such duties and powers as
shall be designated from time to time by the board of directors, the president
or the secretary.
4.8. Salaries. The salaries of all officers shall be fixed or
approved by the board of directors and the fact that any officer is a director
shall not preclude him from receiving a salary as an officer.
Section 5. RESIGNATIONS AND REMOVALS
5.1. Any director or officer may resign at any time by delivering
his resignation in writing to the chairman of the board, the president, or the
secretary or to a meeting of the board of directors. Such resignation shall be
effective upon receipt unless specified to be effective at some other time, and
without in either case the necessity of its being accepted unless the
resignation shall so state. A director (including persons elected by directors
to fill vacancies in the board) may be removed from office with cause by the
vote of the holders of a majority of the shares issued and outstanding and
entitled to vote in the election of directors. The board of directors may at any
time remove any officer either with or without cause. The board of directors may
at any time terminate or modify the authority of any agent. No director or
officer resigning and (except where a right to receive compensation shall be
expressly provided in a duly authorized written agreement with the corporation)
no director or officer removed shall have any right to any compensation as such
director or officer for any period following his resignation or removal, or any
right to damages on account of such removal, whether his compensation be by the
month or by the year or otherwise; unless, in the case of a resignation, the
directors, or, in the case of removal, the body acting on the removal, shall in
their or its discretion provide for compensation.
Section 6. VACANCIES
6.1. If the office of the chairman, the president or the treasurer
or the secretary becomes vacant, the directors may elect a successor by vote of
a majority of the directors then in office. If the office of any other officer
becomes vacant, any person or body empowered to elect or appoint that officer
may choose a successor. Each such successor shall hold office for the unexpired
term, and in the case of the chairman, the president, the treasurer and the
secretary until his successor is chosen and qualified or in each case until he
sooner dies, resigns, is removed or becomes disqualified. Any vacancy of a
directorship shall be filled as specified in Section 3.4 of these by-laws.
Section 7. CAPITAL STOCK
7.1. Stock Certificates. Each shareholder shall be entitled to a
certificate stating the number and the class and the designation of the series,
if any, of the shares held by him, in such form as shall, in conformity to law,
the certificate of incorporation and the by-laws, be prescribed from time to
time by the board of directors. Such certificate shall be signed by the chairman
or vice chairman of the board, if any, or the president or a vice president and
may be countersigned by the treasurer or an assistant treasurer or by the
secretary or an assistant secretary. Any of or all the signatures on the
certificate may be a facsimile. In case an officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed on such certificate
shall have ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent, or registrar at the time of its
issue.
7.2. Loss of Certificates. In the case of the alleged theft, loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim on account thereof, as
the board of directors may prescribe.
Section 8. TRANSFER OF SHARES OF STOCK
8.1. Transfer on Books. Subject to the restrictions, if any,
stated or noted on the stock certificate, shares of stock may be transferred on
the books of the corporation by the surrender to the corporation or its transfer
agent of the certificate therefor properly endorsed or accompanied by a written
assignment and power of attorney properly executed, with necessary transfer
stamps affixed, and with such proof of the authenticity of signature as the
board of directors or the transfer agent of the corporation may reasonably
require. Except as maybe otherwise required by law, by the certificate of
incorporation or by these by-laws, the corporation shall be entitled to treat
the record holder of stock as shown on its books as the owner of such stock for
all purposes, including the payment of dividends and the right to receive notice
and to vote or to give any consent with respect thereto and to be held liable
for such calls and assessments, if any, as may lawfully be made thereon,
regardless of any transfer, pledge or other disposition of such stock until the
shares have been properly transferred on the books of the corporation.
It shall be the duty of each shareholder to notify the corporation
of his post office address.
8.2. Record Date and Closing Transfer Books. In order that the
corporation may determine the shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days (or such longer period as may be required by law) before the date of such
meeting, nor more than sixty days prior to any other action.
If no record date is fixed:
(a) The record date for determining shareholders entitled to notice
of or to vote at a meeting of shareholders shall be at the close of
business on the day next preceding the day on which notice is given, or,
if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held.
(b) The record date for determining shareholders entitled to express
consent to corporate action in writing without a meeting, when no prior
action by the board of directors is necessary, shall be the day on which
the first written consent is expressed.
(c) The record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the board
of directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 9. CORPORATE SEAL
9.1. Subject to alteration by the directors, the seal of the
corporation shall consist of a flat-faced circular die with the word "New
Jersey" and the name of the corporation cut or engraved thereon, together with
such other words, dates or images as may be approved from time to time by the
directors.
Section 10. EXECUTION OF PAPERS
10.1. Except as the board of directors may generally or in
particular cases authorize the execution thereof in some other manner, all
deeds, leases, transfers, contracts, bonds, notes, checks, drafts or other
obligations made, accepted or endorsed by the corporation shall be signed or
endorsed in such manner as shall be determined by the directors. The funds of
the corporation shall be deposited in such banks or trust companies, and checks
drawn against such funds shall be signed in such manner as may be determined
from time to time by the directors.
Section 11. FISCAL YEAR
11.1. The fiscal year of the corporation shall be the 52-week or
53-week period beginning on or about the 1st day of January and ending on the
Saturday closest to the 31st day of December, or such other period as may be
fixed by the board of directors.
Section 12. INDEMNIFICATION
12.1. Indemnification of Directors and Officers. The corporation
shall, to the fullest extent permitted by applicable law, indemnify any person
(and the heirs, executors and administrators thereof) who was or is made, or
threatened to be made, a party to an action, suit or proceeding, whether civil,
criminal, administrative or investigative, whether involving any actual or
alleged breach of duty, neglect or error, any accountability, or any actual or
alleged misstatement, misleading statement or other act or omission and whether
brought or threatened in any court or administrative or legislative body or
agency, including an action by or in the right of the corporation to procure a
judgment in its favor and an action by or in the right of any other corporation
of any type or kind, domestic or foreign, or any partnership, joint venture,
trust, employee benefit plan or other enterprise, which any director or officer
of the corporation is serving or has served in any capacity at the request of
the corporation, by reason of the fact that he, his testator or intestate is or
was a director or officer of the corporation, or is serving or has served such
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity, against judgments, fines, amounts paid in
settlement, and costs, charges and expenses, including attorneys' fees, incurred
therein or in any appeal thereof.
12.2. Indemnification of Others. The Corporation shall indemnify
other persons and reimburse the expenses thereof, to the extent required by
applicable law, and may indemnify any other person to whom the Corporation is
permitted to provide indemnification or the advancement of expenses, whether
pursuant to rights granted pursuant to, or provided by, the New Jersey Business
Corporation Act or otherwise.
12.3. Advances or Reimbursement of Expenses. The corporation
shall, from time to time, reimburse or advance to any person referred to in
Section 12.1 the funds necessary for payment of expenses, including attorneys'
fees, incurred in connection with any action, suit or proceeding referred to in
Section 12.1, upon receipt of a written undertaking by or on behalf of such
person to repay such amount(s) if a judgment or other final adjudication adverse
to the director or officer establishes that his acts or omissions (i) constitute
a breach of his duty of loyalty to the corporation or its shareholders, (ii)
were not in good faith, (iii) involved a knowing violation of law, (iv) resulted
in his receiving an improper personal benefit, or (v) were otherwise of such a
character that New Jersey law would require that such amount(s) be repaid.
12.4. Service of Certain Entities Deemed Requested. Any director
or officer of the corporation serving (i) another corporation, of which a
majority of the shares entitled to vote in the election of its directors is held
by the corporation, or (ii) any employee benefit plan of the corporation or any
corporation referred in clause (i), in any capacity shall be deemed to be doing
so at the request of the Corporation.
12.5. Interpretation. Any person entitled to be indemnified or to
the reimbursement or advancement of expenses as a matter of right pursuant to
this Article may elect to have the right to indemnification (or advancement of
expense) interpreted on the basis of the applicable law in effect at the time of
the occurrence of the event or events giving rise to the action, suit or
proceeding, to the extent permitted by applicable law, or on the basis of the
applicable law in effect at the time indemnification is sought.
12.6. Indemnification Right. The right to be indemnified or to the
reimbursement or advancement of expenses pursuant to this Article (i) is a
contract right pursuant to which the person entitled thereto may bring suit as
if the provisions hereof were set forth in a separate written contract between
the corporation and the director or officer, (ii) is intended to be retroactive
and shall be available with respect to events occurring prior to the adoption
hereof, (iii) shall continue to exist after any elimination of or amendment to
this Article 12 hereof with respect to events occurring prior thereto, and (iv)
and shall not be deemed exclusive of any other rights to which any person
claiming indemnification hereunder may be entitled.
12.7. Indemnification Claims. If a request to be indemnified or
for the reimbursement or advancement of expenses pursuant hereto is not paid in
full by the corporation within thirty days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled also to be paid
the expenses of prosecuting such claim. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of or reimbursement or advancement of expenses to
the claimant is proper in the circumstances, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel, or its
shareholders) that the claimant is not entitled to indemnification or to the
reimbursement or advancement of expenses, shall be a defense to the action or
create a presumption that the claimant is not so entitled. 12.8. Insurance. The
corporation may maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, whether or not the
corporation would have the power to provide indemnification to such person.
Section 13. AMENDMENTS
13.1. These by-laws may be adopted, amended or repealed by vote of
a majority of the stock outstanding at the time entitled to vote in the election
of directors. Provided that notice of the proposed alteration, amendment or
repeal of these by-laws has been stated in the notice of the meeting, such
by-laws may also be adopted, amended or repealed by the board of directors by
vote of a majority of the entire board of directors, but any by-laws adopted by
the board of directors may be amended or repealed by the shareholders entitled
to vote thereon as herein provided. Any by-law, whether adopted, amended or
repealed by the shareholders or directors, may be amended or reinstated by the
shareholders or the directors.
