SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE MACNEAL-SCHWENDLER CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-2239450
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(State of incorporation or (IRS Employer
organization) Identification Number)
815 Colorado Boulevard, 90041
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Los Angeles, California (Zip Code)
(Address of principal executive offices)
If this form relates to the If this form relates to
registration of a class of the registration of a
securities pursuant to class of securities
Section 12(b) of the pursuant to Section 12(g)
Exchange Act and is of the Exchange Act and is
effective pursuant to effective pursuant to
General Instruction A.(c), General Instruction A.(d),
please check the following please check the following
box. [X] box. [ ]
Securities Act registration statement file number to which
this form relates:
----------------------
(If applicable)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of Each Class Name of Each Exchange on
to be so Registered Which Each Class is to be
Registered
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Preferred Stock Purchase New York Stock Exchange
Rights
Securities to be registered pursuant to Section 12(g) of the
Act:
None
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(Title of Class)
Item 1. Description of Registrant's Securities to be
Registered.
On October 5, 1998, the Board of Directors of The
MacNeal-Schwendler Corporation, a Delaware corporation (the
"Company"), declared a distribution of one Right for each
outstanding share of common stock (the "Common Shares") of the
Company. The distribution is to be made as of October 16,
1998 (the "Record Date") to the stockholders of record on
that date. Each Right entitles the registered holder to
purchase from the Company, initially, one one-hundredth of
a share of Junior Participating Preferred Stock ("Preferred
Shares") at a price of $35.00 (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement"),
attached hereto as Exhibit 2.1, between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
The Board of Directors adopted the Rights Agreement
and declared the distribution of Rights following the expiration
of the Company's shareholder rights plan that was in effect
from September 19, 1988 until September 19, 1998.
Under the Rights Agreement, Preferred Shares
purchasable upon exercise of the Rights will be entitled to
dividends of 100 times the dividends per share declared on
the Common Shares and in the event of liquidation will be
entitled to a minimum preferential liquidating distribution
of $l00 per share and an aggregate liquidating distribution
per share of 100 times the distribution made per Common Share.
The Preferred Shares will vote together with the Common Shares
and in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the
amount received per Common Share.
Because of the Preferred Shares' dividend and
liquidation rights, the value when issued of the one one-
hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the Company's
general voting power other than pursuant to a Qualified Offer
(as defined below), the date of such public announcement
being called the "Stock Acquisition Date," or (ii) 10 business
days (or such later date as may be determined by action of the
Board of Directors) following the commencement of, or
announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 20% or more
of the Company's general voting power (the date of such
earlier occurrence being called the "Distribution Date"), the
Rights will be evidenced by the certificates representing the
Common Shares and will be transferred with and only with the
Common Shares. New Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by
reference,
and the surrender for transfer of any certificate for Common
Shares, even without such notation or a copy of this Summary
of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. A "Qualified Offer"
is a tender offer or exchange offer for all outstanding
Common Shares which is determined by at least a majority
of the members of the Board of Directors to be adequate
and otherwise in the best interests of the Company and
its stockholders.
In the event that any person becomes an Acquiring
Person other than by a purchase pursuant to a Qualified Offer,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will not be entitled to the benefit of such adjustment)
will thereafter have the right to receive upon exercise that
number of Common Shares or Common Share equivalents having a
market value of two times the exercise price of the Right.
In the event that, at any time after an Acquiring
Person has become such, the Company is acquired in a merger or
other business combination transaction (other than a merger
which follows a Qualified Offer at the same or a higher price)
or 50% or more of its consolidated assets or earning power
are sold, proper provision will be made so that each holder
of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
The Rights are not exercisable until the
Distribution Date. The Rights will expire on the tenth
anniversary of the Record Date (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as
described below.
The Purchase Price payable, the number of shares or
other securities or property issuable upon exercise of the
Rights and the number of outstanding Rights are subject to
adjustment from time to time to prevent dilution. With
certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No
fractional shares will be issued upon the exercise of the
Rights and in lieu thereof, a cash payment will be made
based on the market price of the Company's common stock on
the last trading date prior to the date of exercise.
At any time after an Acquiring Person has become
such, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group),
in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).
Up to and including the tenth business day after a
Stock Acquisition Date, the Board of Directors of the Company
may redeem the Rights in whole, but not in part, at a price
of $.01 per Right (the "Redemption Price"). Immediately
upon any redemption of the Rights, the right to exercise
them will terminate and the only right of the holders will
be to receive the Redemption Price.
The terms of the Rights may be amended by the Board
of Directors without the consent of the holders of the
Rights at any time prior to the Distribution Date. Thereafter,
subject to certain limitations set forth in the Rights
Agreement, the Rights may be amended to make changes which
do not adversely affect the interests of the holders of the
Rights or which shorten or lengthen time periods.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
subject to federal taxation to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable
for common stock (or other consideration) of the Company or
for common stock of the acquiring company as set forth above.
The foregoing description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Exhibits attached hereto. The Rights
Agreement, attached hereto as Exhibit 2.1, specifies
the terms of the Rights and includes the Form of Right
Certificate (Exhibit 1.1 hereto and Exhibit A to the
Rights Agreement), the Summary of Rights to Purchase
Junior Participating Preferred Stock (Exhibit B to the Rights
Agreement) and the Form of Certificate of Designations of
Junior Participating Preferred Stock (Exhibit C to the Rights
Agreement). The Certificate of Designations of Junior
Participating Preferred Stock is attached hereto as Exhibit
2.2. The form of the letter to be sent to the Company's
stockholders
describing the Rights is attached hereto as Exhibit 2.3.
Each of the Exhibits attached hereto is incorporated herein
by this reference.
Item 2. Exhibits.
Exhibit No. Description of Exhibit
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1.1 Form of Right Certificate (included as
Exhibit A to Exhibit 2.1 hereto).
2.1 Rights Agreement dated as of October 5, 1998
between The MacNeal-Schwendler Corporation and
ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, including the Form of Right
Certificate (Exhibit A), the Summary of Rights to
Purchase Junior Participating Preferred Stock
(Exhibit B) and the Form of Certificate of
Designations of Junior Participating Preferred
Stock (Exhibit C).
2.2 Certificate of Designations of Junior
Participating Preferred Stock.
2.3 Form of letter to be sent to the Company's
stockholders describing the Rights.
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
THE MACNEAL-SCHWENDLER CORPORATION
Date: October 5, 1998 By: /s/ Thomas C. Curry
-------------------------
Thomas C. Curry
President and Chief Executive
Officer
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
______________________
RIGHTS AGREEMENT
______________________
Dated as of October 5, 1998
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent. 4
Section 3. Issuance of Right Certificates 4
Section 4. Form of Right Certificates. 6
Section 5. Countersignature and Registration 7
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. 10
Section 9. Reservation and Availability of Shares;
Registration 10
Section 10. Record Date. 11
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. 11
Section 12. Certification of Adjusted Purchase Price
or Number of Shares. 18
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. 19
Section 14. Fractional Rights and Fractional Shares. 22
Section 15. Rights of Action. 22
Section 16. Agreement of Right Holders 23
Section 17. Right Certificate Holder Not Deemed a
Stockholder. 23
Section 18. Concerning the Rights Agent. 24
Section 19. Merger or Consolidation or Change of Name
of Rights Agent. 24
Section 20. Duties of Rights Agent. 25
Section 21. Change of Rights Agent. 27
Section 22. Issuance of New Right Certificates. 27
Section 23. Redemption. 28
Section 24. Notice of Proposed Actions. 28
Section 25. Notices. 29
Section 26. Supplements and Amendments. 29
Section 27. Exchange 30
Section 28. Successors 31
Section 29. Determination and Actions Taken by the
Board of Directors. 31
Section 30. Benefits of this Agreement. 31
Section 31. Governing Law. 31
Section 32. Counterparts. 31
Section 33. Section Headings. 31
Section 34. Severability. 32
Exhibits.
Exhibit A Form of Right Certificate
Exhibit B Form of Summary of Rights
Exhibit C Form of Certificate of Designations of Junior
Participating Preferred Stock
<PAGE>
RIGHTS AGREEMENT
AGREEMENT, dated as of October 5, 1998 between The
MacNeal-Schwendler Corporation, a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has
authorized and declared the distribution of one right for
(i) each share of Common Stock of the Company ("Common
Stock") outstanding at the Close of Business (as hereinafter
defined) on October 16, 1998 (the "Rights Record Date"),
each right representing the right to purchase one Unit
consisting, initially, of one one-hundredth of a share of
Junior Participating Preferred Stock, and (ii) each
additional share of Common Stock which shall become
outstanding between the Rights Record Date and the earliest
of the Distribution Date, the Expiration Date (as such terms
are hereinafter defined) and the date, if any, on which such
rights may be redeemed, all upon the terms and subject to
the conditions hereinafter set forth (each such right being
hereinafter referred to as a "Right");
NOW, THEREFORE, the parties agree as follows:
Section 1. Certain Definitions.
(a) For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or
which, alone or together with all Affiliates and Associates
of such Person, shall be the Beneficial Owner (within the
meaning of Section 1(b)) of a Substantial Block of Voting
Stock, but shall not include (i) an Exempt Person or
(ii) any Person who or which acquires a Substantial Block of
Voting Stock in connection with a transaction or series of
transactions approved prior to such transaction or
transactions by the Board of Directors of the Company;
provided that no person shall become an Acquiring Person
solely as a result of a reduction in the number of shares of
Voting Stock outstanding, unless and until such Person shall
thereafter become the Beneficial Owner of additional shares
constituting 1% or more of the general voting power of the
Company. If the Board of Directors determines in good
faith that a Person who would otherwise be an Acquiring
Person has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of
shares so that such Person would no longer be an Acquiring
Person as herein defined, then such Person shall not be
deemed to be an Acquiring Person unless and until such
Person shall become the Beneficial Owner of additional
shares constituting 1% or more of the general voting power
of the Company.
"Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as
in effect as of the date hereof.
"Business Day" shall mean any day other than a
Saturday, Sunday or day on which banking institutions in the
State of California are authorized or obligated by law or
executive order to close.
"Close of Business" on any given date shall mean
5:00 p.m., Los Angeles time, on such date; provided,
however, that if such date is not a Business Day it shall
mean 5:00 p.m., Los Angeles time, on the next succeeding
Business Day.
"Common Stock" shall have the meaning assigned to
it in the preamble; and "common stock" when used with
reference to Persons other than the Company shall mean:
(i) in the case of Persons organized in corporate form, the
capital stock or equity security with the greatest voting
power of such Person or, if such Person is a Subsidiary of
another Person, of the Person or Persons which ultimately
control such first-mentioned Person; and (ii) in the case of
Persons not organized in corporate form, the units of
beneficial interest which (A) represent the right to
participate generally in the profits and losses of such
Person (including without limitation any flow-through tax
benefits resulting from an ownership interest in such
Person) and (B) are entitled to exercise the greatest voting
power of such Person or, in the case of a limited
partnership, shall have the power to remove the general
partner or partners.
"Distribution Date" shall have the meaning
assigned to it in Section 3(a).
"Equivalent Stock" shall have the meaning assigned
to it in Section 7(a).
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
"Exempt Person" shall mean the Company, any
Subsidiary of the Company and any employee benefit plan or
employee stock plan of the Company or of any Subsidiary of
the Company, or any trust or other entity organized,
established or holding shares of Common Stock by, for or
pursuant to, the terms of any such plan.
"Expiration Date" shall have the meaning assigned
to it in Section 7(a).
"Offer Date" shall have the meaning assigned to it
in Section 3(a).
"Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust
or other entity and shall include any successor by merger
(or otherwise) of any of the foregoing.
"Principal Party" shall have the meaning assigned
to it in Section 13(b).
"Purchase Price" shall mean the price payable for
one Unit upon exercise of a Right.
"Qualified Offer" shall mean a tender or exchange
offer for all outstanding Common Stock at a price and on
terms determined to be adequate and otherwise in the best
interests of the Company and its stockholders (other than
the Person or an Affiliate or Associate thereof on whose
behalf the offer is made) by at least a majority of the
members of the Board of Directors who are not representatives
of or affiliated with the Person making such offer or any
Affiliate or Associate of such Person.
"Redemption Price" shall have the meaning assigned
to it in Section 23(a).
"Right" shall have the meaning assigned to it in
the preamble.
"Rights Record Date" shall have the meaning
assigned to it in the preamble.
"Subject Shares" shall mean the class or series of
shares then issuable on exercise of the Rights.
"Stock Acquisition Date" shall mean the date of
the first public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
"Subsidiary" shall mean, with respect to any
Person, a corporation or other entity the securities or
other ownership interests of which having ordinary voting
power sufficient to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by such Person and
any Affiliate of such Person.
"Substantial Block" shall mean a number of shares
of Voting Stock having in the aggregate 20 percent or more
of the general voting power.
"Trading Day" shall have the meaning assigned to
it in Section 11(d).
"Unit" shall mean the shares or other securities
issuable upon exercise of one Right, initially one one-
hundredth of a share of Junior Participating Preferred Stock
of the Company having the rights and preferences set forth
in Exhibit C, before any adjustment pursuant to Section
11(a)(ii) or Section 13.
"Voting Stock" shall mean shares of the Company's
capital stock the holders of which have general voting
power.
(b) For purposes of this Agreement, a Person
shall be deemed the "Beneficial Owner" of any securities:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially owns,
directly or indirectly, for purposes of Section 13(d)
of the Exchange Act and Rule 13d-3 promulgated under
the Exchange Act, in each case as in effect on the date
hereof;
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of any conversion,
exchange or purchase rights (other than the Rights),
warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial
Owner" of 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 payment or
exchange; or (B) the right to vote or to direct the
voting of, pursuant to any agreement, arrangement or
understanding (whether or not in writing); or (C) the
right to dispose or to direct the disposition of,
pursuant to any agreement, arrangement or understanding
(whether or not in writing); 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 for the purpose of acquiring, holding,
voting or disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, any security if
the agreement, arrangement or understanding to vote such
security (1) arises solely from the grant of a revocable
proxy or consent given to such Person in connection with a
public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations
under the Exchange Act, and (2) is not also then reportable
on Schedule 13D (or any comparable or successor report)
under the Exchange Act; provided, further, that a Person
engaged in business as an underwriter of securities shall
not be deemed the "Beneficial Owner" of securities acquired
through such person's participation in good faith in a firm
commitment underwriting until the expiration of the 40-day
period immediately following the date of such acquisition.
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
Agent or Agents as it may deem necessary or desirable and
determine the respective duties of the Rights Agent and
the Co-Rights Agents.
Section 3. Issuance of Right Certificates.
(a) Until the Close of Business on the earlier of
(i) the tenth Business Day after a Stock Acquisition Date or
(ii) the tenth Business Day (or such later date as the
Company's Board of Directors shall determine) after the date
of the commencement by any Person (other than an Exempt
Person) of, or the date of the first public announcement
(such commencement date or announcement date being herein
referred to as the "Offer Date") of the intent of any Person
(other than an Exempt Person) to commence, a tender or
exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of 20 percent or more of the
then outstanding Voting Stock (irrespective of whether any
shares are actually purchased pursuant to such offer) (the
tenth Business Day after the first to occur of a Stock
Acquisition Date or an Offer Date being herein referred to
as the "Distribution Date"),
(i) the Rights will automatically attach to,
and be evidenced by, the certificates for Common Stock
registered in the names of the holders of Common Stock
(which certificates for Common Stock shall be deemed
also to be Right Certificates) and not by separate
Right Certificates, and
(ii) each Right will be transferable only in
connection with the transfer of the underlying shares
of Common Stock.
As soon as practicable after the Distribution
Date, the Rights Agent will mail, by first-class, insured,
postage prepaid mail, to each record holder of Common Stock
as of the Close of Business on the Distribution Date, as
shown by the records of the Company at the Close of Business
on the Distribution Date, at the address of such holder
shown on such records, a Right Certificate, in substantially
the form of Exhibit A hereto, evidencing one Right for each
share of Common Stock so held.
(b) As soon as practicable after the Rights
Record Date, the Company will send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit
B, by first-class mail, postage prepaid, to each record
holder of Common Stock as of the Close of Business on the
Rights Record Date, at the address of such holder shown on
the records of the Company.
(c) The Company will cause certificates for
Common Stock issued after the Rights Record Date (including
replacement certificates for shares of Common Stock
outstanding on or prior to the Rights Record Date), but
prior to the earliest of (i) the Distribution Date, (ii) the
Expiration Date and (iii) the date, if any, on which the
Rights may be redeemed, to have impressed on, printed on,
written on or otherwise affixed to them the following
legend:
This certificate also entitles the holder hereof
to certain Rights as set forth in the Rights
Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, as
the same shall be amended from time to time (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 the Company. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt
of a written request therefor. Under certain
circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) or certain
transferees of any thereof, whether currently held
by or on behalf of such Person or by any
subsequent holder, may be limited as provided in
Section 7(f) of the Rights Agreement.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate.
(d) Until the Distribution Date, the surrender
for transfer of any of the certificates for Common Stock
outstanding on or after the Rights Record Date, with or
without a copy of the Summary of Rights attached thereto and
with or without the legend set forth in subsection (c)
above, shall also constitute the transfer of the Rights
associated with such Common Stock. After the Distribution
Date, the Rights will be evidenced solely by the Right
Certificates.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of
assignment and certification and of election to purchase
shares to be printed on the reverse thereof) shall be in
substantially 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 and as are not inconsistent with the
provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be
listed, or to conform to usage.
(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 that represents Rights
Beneficially Owned by: (i) an Acquiring Person or any
Associate or Affiliate of any Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights, or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of
Section 7(f), and any Right Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in
this sentence, shall contain (to the extent feasible and
reasonably identifiable as such) the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement) or certain
transferees thereof. Accordingly, under certain
circumstances as provided in the Rights Agreement,
this Right Certificate and the Rights represented
hereby may be limited as provided in Section 7(f)
of such Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its
President or any of its Vice Presidents, either manually or
by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who
shall have signed any of the 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, issued and delivered 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 (as specified above) 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, the Rights
Agent will keep or cause to be kept 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 Right Certificate, the
date of each Right Certificate and the number of each Right
Certificate.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(f) and Section 14, at any time after the Close of
Business on the Distribution Date, and prior to the Close of
Business on the Expiration Date or the day prior to the day,
if any, on which the Rights are to be redeemed pursuant to
Section 23, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the
registered holder to purchase such number of Units 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 shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate(s) to be transferred, split up, combined or
exchanged, with the form of assignment on the reverse
side(s) thereof duly completed and executed, at the stock
transfer office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the persons entitled
thereto the Right Certificate(s) requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right
Certificates. Notwithstanding the foregoing, neither the
Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate unless and until the
registered holder shall have completed and signed the
certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably
request.
(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 reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right
Certificate, if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(f), and unless earlier
redeemed as provided in Section 23, the registered holder of
any Right Certificate may exercise the Rights evidenced
thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly completed and executed, to the Rights Agent at
the stock transfer office of the Rights Agent, together with
payment of the Purchase Price for each Unit as to which the
Rights are exercised, at or prior to the Close of Business
on the tenth anniversary of the Rights Record Date or such
other date to which the Rights may be extended as provided
in this Agreement (the latest of such dates being herein
referred to as the "Expiration Date"). If at any time after
the Distribution Date but prior to the Expiration Date the
Company is unable, under its Certificate of Incorporation,
to issue the number and class of shares required to be
issued upon the exercise of all of the outstanding Rights,
the Company may issue upon exercise of any of the Rights
shares of capital stock or other securities of the Company
of equivalent value to the shares so required to be issued
("Equivalent Stock"), as determined by the Board of
Directors.
(b) The Purchase Price for each Unit pursuant to
the exercise of a Right shall initially be $35.00, shall be
subject to adjustment from time to time as provided in
Sections 11 and 13 and shall be payable in lawful money of
the United States of America.
(c) Upon receipt of a Right Certificate, with the
form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Units to be purchased
and an amount equal to any applicable transfer tax in cash,
or by certified check, bank draft or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the Company or any transfer
agent of the Company a certificate for the number of shares
to be purchased and the Company will comply, and hereby
irrevocably authorizes its transfer agent to comply, with
all such requests, (ii) requisition from the Company the
amount of cash to be paid in lieu of issuance of a
fractional share, when appropriate, in accordance with
Section 14, and (iii) promptly after receipt of such
certificate from any such transfer agent, cause the same to
be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names
as may be designated by such holder, and, when appropriate,
after receipt promptly deliver such cash in lieu of a
fractional share to or upon the order of the registered
holder of such Right Certificate; provided, however, that in
the case of the purchase, in connection with the exercise of
a Right, of securities other than shares of stock, the
Rights Agent shall promptly take the appropriate actions
with respect thereto as shall as nearly as practicable
correspond to the actions described in the foregoing clauses
(i) through (iii).
(d) The Company shall not be required to pay any
transfer tax which may be payable in respect of any transfer
involved in the transfer or delivery of Right Certificates,
or the issuance or delivery of certificates in a name other
than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or
deliver any certificates upon the exercise of any Rights,
until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(e) In case the registered holder of any Right
Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject
to the provisions of Section 14.
(f) Notwithstanding any provision of this
Agreement to the contrary, upon the occurrence of any of the
events described in any of clauses (A), (B), (C) or (D) of
Section 11(a)(ii), the adjustment provided for under Section
11(a)(ii) shall not apply with respect to any Rights that
are at the time of the occurrence of such event Beneficially
Owned by (i) an Acquiring Person or by any Associate or
Affiliate of such Acquiring Person (which Acquiring Person
or Affiliate or Associate engages in, or realizes the
benefit of, one or more of the transactions described in
clause (A) or clause (B) of Section 11(a)(ii), realizes the
benefits set forth in clause (C) of Section 11(a)(ii) or,
alone or together, become the Beneficial Owner(s) of a
number of shares of Voting Stock which equals or exceeds the
percentage of the general voting power as provided in clause
(D) of Section 11(a)(ii), as the case may be), or (ii) a
transferee of an Acquiring Person or of any Associate or
Affiliate of such Acquiring Person (which Acquiring Person
or Associate or Affiliate engages in, or realizes the
benefit of, one or more of the transactions described in
clause (A) or clause (B) of Section 11(a)(ii), realizes the
benefits set forth in clause (C) of Section 11(a)(ii) or,
alone or together with such Acquiring Person or any such
Associate or Affiliate, become the Beneficial Owner(s) of a
number of shares of Voting Stock which equals or exceeds the
percentage of the general voting power as provided in clause
(D) of Section 11(a)(ii), as the case may be) (A) who
becomes a transferee after the Acquiring Person becomes
such, or (B) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (1) a transfer
(whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (2) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(f). Upon the
exercise of such Rights, the holders thereof shall be
entitled to receive, upon payment of the Purchase Price, the
number of Units issuable upon exercise of such Rights
without giving effect to the adjustment provided for under
Section 11(a)(ii). The Company shall use all reasonable
efforts to insure that the provisions of this Section 7(f)
and Section 4(b) are complied with, but shall have no
liability to any holder of Right Certificates or other
Person as a result of its making or failing to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(g) 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 Right Certificate
surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
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 cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of
Shares; Registration.
(a) The Company covenants and agrees that it
shall (i) on or prior to the Rights Record Date, take all
such action as shall be necessary to cause to be reserved
and kept available out of its authorized and unissued
capital stock, the number, class and series of shares that
will be sufficient to permit the exercise in full of all
Rights to be outstanding as of the Rights Record Date,
(ii) no later than promptly following the Distribution Date,
take all such action as shall be necessary to cause to be
reserved and kept available out of its authorized and
unissued capital stock, or its authorized and issued shares
held in its treasury, the number of additional shares that
will, from time to time, be sufficient to permit the
exercise in full of all Rights from time to time
outstanding, (iii) take all such action as may be necessary
to insure that all shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable, and (iv) pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right
Certificates or of any shares upon the exercise of Rights
(except as otherwise provided in Section 7(d)).
(b) The Company agrees to take all such action,
from and after the Distribution Date, as may be necessary or
appropriate to permit the issuance of shares in connection
with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as
amended from time to time (the "Securities Act"), and
(ii) the securities or "blue sky" laws of the various
states. The Company may temporarily suspend, for a period of
time not to exceed 90 days, the exercisability of the Rights
in order to prepare and file a registration statement or
statements for the purpose of effecting any such
registration and permit such statement(s) to become
effective. At the commencement and termination of any such
suspension, the Company shall issue a public announcement
and shall provide written notice to the Rights Agent,
stating that the exercisability of the Rights has been
temporarily suspended, or that such suspension has
terminated, as the case may be.
(c) If and so long as the stock issuable upon the
exercise of Rights is listed on any national securities
exchange, the Company shall use its reasonable efforts to
cause all shares reserved for issuance upon exercise of
Rights to be listed on such exchange upon official notice of
issuance upon such exercise.
Section 10. Record Date. Each Person in whose
name any stock certificate is issued upon the exercise of
Rights shall for all purposes be deemed to have become the
holder of record of the shares represented thereby on, and
such certificate shall be dated, the date upon which the
Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which
the Rights shall be exercisable, including without
limitation the right to vote or to receive dividends or
other distributions, and such holder 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 and kind of shares or other securities covered by
each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare and
pay a dividend on the shares which are subject to the
Rights ("Subject Shares") payable in shares of stock of
the Company, (B) subdivide or split the Subject Shares,
(C) combine or consolidate the Subject Shares into a
smaller number of shares or effect a reverse stock
split of the Subject Shares or (D) issue any shares of
its capital stock in a reclassification of the Subject
Shares (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation),
then, and in each such event, 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, split,
reverse split, combination, consolidation or
reclassification, and the number and kind of the
Subject Shares or other securities issuable upon the
exercise of a Right on such date shall be
proportionately adjusted so that the holder of any
Right exercised on or after such time shall be entitled
to receive upon the exercise thereof and payment of the
Purchase Price, the aggregate number and kind of shares
of capital stock or other property, as the case may be,
that if such Right had been exercised immediately prior
to such date and at a time when the transfer books of
the Company were open, such holder would have owned
upon such exercise and would have been entitled to
receive by virtue of such dividend, subdivision, split,
reverse split, combination, consolidation or
reclassification. If an event occurs that would
require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event that at any time after the
date of this Agreement
(A) any Acquiring Person, or any
Associate or Affiliate of any Acquiring Person,
directly or indirectly (1) shall merge into the
Company or any of its Subsidiaries or otherwise
combine with the Company or any of its
Subsidiaries and the Company or such Subsidiary
shall be the continuing or surviving corporation
of such merger or combination and the Common Stock
shall remain outstanding and the outstanding
shares thereof shall not be changed into or
exchanged for stock or other securities of the
Company or of any other Person or cash or any
other property, or (2) shall sell or otherwise
transfer in one or more transactions, assets to
the Company or any of its Subsidiaries in exchange
for 25 percent or more of the shares of any class
of capital stock of the Company or any of its
Subsidiaries, and the Common Stock shall remain
outstanding and unchanged, or
(B) directly or indirectly, any
Acquiring Person, or any Associate or Affiliate of
any Acquiring Person, shall (1) in one or more
transactions, transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole
or in part) for shares of any class of capital
stock of the Company or any of its Subsidiaries or
for securities exercisable for or convertible into
shares of any class of capital stock of the
Company or any of its Subsidiaries or otherwise
obtain from the Company or any of its
Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of
the Company or any of its Subsidiaries or other
securities exercisable for or convertible into
shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as
part of a pro rata distribution by the Company or
such Subsidiary to all holders of Common Stock),
(2) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or
more transactions), to, from or with, as the case
may be, the Company or any of its Subsidiaries,
assets on terms and conditions less favorable to
the Company or such Subsidiary than the Company or
such Subsidiary would be able to obtain in arm's-
length negotiation with an unaffiliated third
party, (3) receive any compensation from the
Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a
regular employee, or fees for serving as director,
at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (4) receive the
benefit, directly or indirectly (except
proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial
assistance provided by the Company or any of its
Subsidiaries, on terms and conditions less
favorable to the Company or such Subsidiary than
the Company or such Subsidiary would be able to
obtain in arm's-length negotiation with an
unaffiliated third party, or
(C) during any such time as there
is an Acquiring Person, there shall be any
reclassification of securities (including any
reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other
similar transaction or series of transactions
involving the Company or any of its Subsidiaries
(whether or not with or into or otherwise
involving an Acquiring Person or any Affiliate or
Associate of such Acquiring Person) which has the
effect, directly or indirectly, of increasing by
more than one percent the proportionate share of
the outstanding shares of any class of equity
securities, or of securities exercisable for or
convertible into equity securities, of the Company
or any of its Subsidiaries which is directly or
indirectly owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an
Acquiring Person otherwise than pursuant to a
Qualified Offer,
then, and in each such case, but subject to the provisions
of Section 27, proper provision shall be made so that each
holder of a Right, except as provided below and in Section
7(f), shall, on and after the later of (I) the date of the
occurrence of an event described in clause (A), (B), (C) or
(D) of this Section 11(a)(ii), or (II) the date of the
expiration of the period within which the Rights may be
redeemed pursuant to Section 23 (as the same may have been
amended as provided in Section 26), have the right to
receive, upon exercise thereof at the then current Purchase
Price, such number of shares of Common Stock as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the then number of Units for which a Right
is then exercisable and dividing that product by (y) 50
percent of the current market price per share of Common
Stock (determined in accordance with Section 11(d)) on the
date of the occurrence of the relevant event listed above in
clause (A), (B), (C) or (D) of this subparagraph (ii);
provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13, then only the
provisions of Section 13 shall apply and no adjustment shall
be made pursuant to this Section 11(a)(ii). The Company
shall not consummate any such merger, combination, transfer
or transaction referred to in any of such clauses (A), (B)
and (C) unless prior thereto there shall be sufficient
authorized but unissued Common Stock to permit the exercise
in full of the Rights in accordance with the foregoing
sentence, unless the Board of Directors has determined to
issue Equivalent Stock in accordance with Section 7(a);
provided, however, that in no case may the Company
consummate any such merger, combination, transfer or
transaction if at the time of or immediately after such
transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights.
In the event that the Company issues Equivalent
Stock upon the exercise of any Rights pursuant to the
immediately preceding paragraph, then, upon any such
exercise, proper provision shall be made so that the holder
of a Right (except as provided in Section 7(f)) shall have
the right to receive, upon such exercise at the then current
Purchase Price, such number of shares or other units of
Equivalent Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price
by the number of Units for which a Right is then exercisable
and dividing that product by (y) 50 percent of the current
market price per share or other unit of the Equivalent Stock
of the Company (determined on substantially the same basis
as is prescribed by Section 11(d) with respect to the
valuation of Common Stock) on the date of occurrence of the
relevant event listed above in clause (A), (B), (C) or (D)
of this subparagraph (ii). In the event that at any time
the Company should be prohibited by law, by any provision of
its Certificate of Incorporation, or by any instrument or
agreement to which the Company is a party or by which it is
bound, from issuing, or should be unable under its
Certificate of Incorporation to issue, sufficient Equivalent
Stock to permit the exercise of all outstanding Rights in
accordance with the foregoing sentence, then, in lieu of
issuing such Equivalent Stock upon such exercise, the
Company shall pay to each holder of a Right (except as
provided in Section 7(f)) upon surrender of the Right as
provided herein but without payment of the Purchase Price,
an amount in cash for each Right equal to the Purchase
Price.
(b) In case the Company shall at any time after
the Rights Record Date fix a record date for the issuance of
rights or warrants to all holders of Common Stock or Subject
Shares entitling them for a period expiring within 45
calendar days after such record date to subscribe for or
purchase Common Stock or Subject Shares or securities
convertible into Common Stock or Subject Shares at a price
per share (or having a conversion price per share, if a
security convertible into Common Stock) less than the
current market price per share (determined in accordance
with Section 11(d)) 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, of which the
numerator shall be the total number of shares of Common
Stock and Subject Shares outstanding on such record date
plus the number of shares of Common Stock which the
aggregate offering price of the total number of 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 of which the denominator
shall be the total number of shares of Common Stock and
Subject Shares outstanding on such record date plus the
number of additional shares to be offered for subscription
or purchase (or into which the convertible securities to be
offered are initially convertible). In case such
subscription or purchase price may be paid, in whole or in
part, 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.
Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(c) In case the Company shall at any time after
the Rights Record Date fix a record date for the making of a
distribution on the shares of Common Stock or the Subject
Shares, whether by way of a dividend, distribution,
reclassification of stock, recapitalization, reorganization
or partial liquidation of the Company or otherwise (and
including any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing corporation), of subscription rights or warrants
(excluding those referred to in Section 11(b)), evidences of
indebtedness or other assets (other than (i) regular
periodic cash dividends, (ii) a dividend payable in Common
Stock or (iii) a distribution which is part of or is made in
connection with a transaction to which Section 11(a)(ii) or
Section 13 applies), 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, of which the numerator shall be
the current market price per share of Common Stock
(determined in accordance with Section 11(d)) on such record
date, less the fair market value applicable to one share of
Common Stock (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
such assets or evidences of indebtedness or of such
subscription rights or warrants so to be distributed, and of
which the denominator shall be such current market price per
share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had
not been fixed.
(d) For the purpose of any computation hereunder,
the "current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the 30 consecutive
Trading Days immediately prior to such date; provided,
however, that in the event that the current market price per
share of Common Stock is determined during a period
following the announcement by the issuer of such Common
Stock of a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of Common Stock (other than the
Rights), and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the
current market price per share of Common Stock in connection
with ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities
exchange, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc., Automated Quotation
System ("NASDAQ"). If on any such date the shares of Common
Stock are not quoted by any such organization, the fair
market value of such shares on such date as determined in
good faith by the Board of Directors of the issuer of such
Common Stock shall be used. Any such determination of
current market price shall be described in a statement filed
with the Rights Agent.
For the purpose of any computation hereunder, the
"current market price" of a Unit shall be deemed to be equal
to the current market price per share of Common Stock, and
the "current market price" of a Subject Share shall be
deemed to be equal to the current market price per share of
Common Stock divided by the number of Subject Shares which
comprise a Unit.
For purposes of this Agreement, the term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least one percent in such 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-hundredth of a share, as
the case may be. Notwithstanding the proviso to 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 gives
rise to such adjustment or (ii) the date of the expiration
of the right to exercise any Rights.
(f) In the event that at any time, as a result of
an adjustment made pursuant to Section 11(a), the holder of
any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other
than shares of Common Stock, 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 such shares, contained in
Sections 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the shares of
Common Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall represent the right to purchase, at the
adjusted Purchase Price, the number of 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 shares (calculated to the
nearest one-hundredth) obtained by (i) multiplying (x) the
number of shares covered by a Right immediately prior to
such 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
shares purchasable upon the exercise of each Right. Each of
the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Units 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-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. 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
each adjustment of the number of Rights pursuant to this
Section 11(i) the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the 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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of shares issuable upon the
exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase
Price per share and the number of shares which were
expressed in the initial Right Certificates issued
hereunder.
(k) In any case in which this Section 11 requires
that an adjustment in the Purchase Price be made effective
as of the record date for a specified event, the Company may
elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such
record date the additional shares or securities of the
Company, if any, issuable as a consequence of 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 or securities upon the occurrence of such
event.
(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
adjustments in the number of shares which may be acquired
upon exercise of the Rights, and such adjustments in the
Purchase Price, in addition to those adjustments expressly
required by the other subsections of this Section 11, as and
to the extent that the Company, in its sole discretion,
shall determine to be advisable, in order that, in the event
of (i) any reclassification, consolidation or subdivision of
the Common Stock, (ii) any reorganization or partial
liquidation of the Company or similar transaction, (iii) any
issuance wholly for cash of any Common Stock at less than
the current market price, (iv) any issuance wholly for cash
of Common Stock or securities which by their terms are
convertible into or exchangeable for Common Stock, (v) any
stock dividends or (vi) any issuance of rights, options or
warrants, hereafter made by the Company to holders of its
Common Stock as provided herein-above in this Section 11,
(A) the holders of the Rights in any such event shall be
treated equitably and in accordance with the purpose and
intent of this Agreement, and (B) to the extent reasonably
possible, such event shall not, in the opinion of counsel
for the Company, result in the stockholders of the Company
being subject to any United States federal income tax
liability by reason thereof.
Section 12. Certification of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is made
as provided in Section 11 or 13, the Company shall
(i) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting
for such adjustment, (ii) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a
copy of such certificate, and (iii) mail a brief summary
thereof to each holder of a Right Certificate in accordance
with Section 25. Notwithstanding the foregoing sentence,
the failure of the Company to give such notice shall not
affect the validity of, or the force or effect of, the
requirement for such adjustment.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, at any time after an
Acquiring Person has become such,
(i) the Company shall consolidate with, or
merge with and into, any other Person and the Company
shall not be the continuing or surviving corporation of
such consolidation or merger,
(ii) any other Person(s) shall consolidate or
merge with and into the Company, the Company shall be
the continuing or surviving corporation of such merger
and, in connection with such consolidation or merger,
all or part of the Common Stock shall be changed into
or exchanged for stock or other securities of the
Company or of any other Person or cash or any other
property, or
(iii) 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 more than 50
percent of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other
Person, (other than a pro rata distribution by the
Company of assets (including securities) of the Company
or any of its Subsidiaries to all holders of the
Company's Common Stock),
then, on and after the later of (I) the date of the
occurrence of an event described in clause (i), (ii) or
(iii) of this Section 13(a), or (II) the date of the
expiration of the period within which the Rights may be
redeemed pursuant to Section 23 (as the same may have been
amended as provided in Section 26):
(A) proper provision shall be made
so that each holder of a Right shall thereafter
have the right to receive, upon the exercise
thereof at the then current Purchase Price, such
number of shares of common stock of the Principal
Party as shall be equal to the result obtained by
(x) multiplying the then current Purchase Price by
the number of Units for which a Right is then
exercisable and dividing that product by (y) 50
percent of the current market price per share of
the common stock of the Principal Party
(determined in the same manner as the current
market price of Common Stock is determined under
Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer;
(B) the Principal Party shall
thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the
Company pursuant to this Agreement, and proper
provision shall be made for the foregoing,
provided that the Principal Party shall, prior to
the first occurrence of an event described in
clause (i), (ii) or (iii) of this Section 13(a),
have caused to be reserved out of its authorized
and unissued shares of common stock (or its
authorized and issued shares of common stock held
in its treasury), for issuance pursuant to this
Agreement, the number of shares of common stock
that will be sufficient to permit the exercise in
full of the Rights after the occurrence of such
event;
(C) the term "Company" wherever
used in this Agreement shall thereafter be deemed
to refer to such Principal Party; and
(D) the Principal Party shall, in
addition to the reservation of shares of its
common stock as provided in the proviso to clause
(B) above, take such steps (including without
limitation compliance with the Company's other
obligations as set forth in Section 9) 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 the shares of
its Common Stock thereafter deliverable upon the
exercise of the Rights; provided, however, that,
upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all
assets, recapitalization, reclassification of
shares, reorganization or other extraordinary
transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled
to receive, upon exercise of a Right and payment
of the Purchase Price, such cash, shares, rights,
warrants and other property which such holder
would have been entitled to receive had such
holder, at the time of such transaction, owned the
shares of common stock of the Principal Party
purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including,
but not limited to, reservation of shares of
stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares,
rights, warrants and other property.
(b) For purposes of this Agreement, "Principal
Party" shall mean
(i) in the case of any transaction described
in clause (i) or (ii) of Section 13(a), (A) the Person
that is the issuer of the securities into which shares
of Common Stock are converted in such merger or
consolidation, or, if there is more than one such
issuer, the issuer the common stock of which has the
greatest market value, or (B) if no securities are so
issued, (x) the Person that is the other party to the
merger or consolidation and that survives said merger
or consolidation, or, if there is more than one such
Person, the Person the common stock of which has the
greatest market value or (y) if the Person that is the
other party to the merger or consolidation does not
survive the merger or consolidation, the Person that
does so survive (including the Company if it survives);
and
(ii) in the case of any transaction described
in clause (iii) of Section 13(a), the Person that is
the party receiving the greatest portion of the assets
or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is
a party to such transaction or transactions receives
the same portion of the assets or earning power so
transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of
common stock having the greatest market value of shares
outstanding;
provided, however, that in any such case, (1) if the common
stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another corporation the
common stock of which is and has been so registered,
"Principal Party" shall refer to such other corporation;
(2) if the common stock of such Person is not and has not
been so registered and such Person is not a direct or
indirect Subsidiary of another corporation the common stock
of which is and has been so registered, "Principal Party"
shall refer to the corporation which ultimately controls
such Person; (3) in case such Person is a Subsidiary,
directly or indirectly, of more than one corporation, the
common stocks of all of which are and have been so
registered, "Principal Party" shall refer to whichever of
such corporations is the issuer of common stock having the
greatest market value of shares held by the public; and (4)
if the common stock of such Person is not and has not been
so registered and such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1), (2) and (3)
above shall apply to each of the chains of ownership having
an interest in such joint venture as if such Person were a
"Subsidiary" of both or all of such joint venturers and the
Principal Party in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio
as its direct or indirect interests in such Person bear to
the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto
the Company and the Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement
making valid provision for the results described in clause
(A) of Section 13(a) and confirming that the Principal Party
will perform its obligations under this Section 13(a);
provided, however, that in no case may the Company
consummate any such consolidation, merger, sale or transfer
if (i) at the time of or immediately after such transaction
there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (ii) prior to,
simultaneously with or immediately after such transaction,
the stockholders of the Person which constitutes, or would
constitute, the Principal Party for purposes of this Section
13 shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and
Associates.
(d) The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or
sales or other transfers. This Section 13 shall not be
applicable to a transaction described in Subparagraphs (i),
(ii) or (iii) of Subsection (a) of this Section if (i) such
transaction is consummated with a Person or Persons who
acquired Common Stock pursuant to a Qualified Offer (or a
wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such
transaction or distributable to stockholders upon conclusion
of such transaction is not less than the price per share of
Common Stock paid to all holders of Common Stock whose
shares were purchased pursuant to such Qualified Offer and
(iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such
transaction or distributable to stockholders upon conclusion
of such transaction is the same as the form of consideration
paid pursuant to such Qualified Offer. Upon conclusion of
any transaction described in the foregoing sentence, all
Rights shall expire.
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. If the Company shall
elect not to issue such fractional Rights, in lieu of such
fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such
Fractional Rights would otherwise be issuable an amount in
cash equal to the same fraction of the current market value
of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any
national securities exchange, the average of the high bid
and low asked prices in the over-the-counter market, as
reported by NASDAQ. If on any such date the Rights are not
quoted by any such organization, 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. Any such
determination of current market value shall be described in
a statement filed with the Rights Agent.
(b) The Company shall not be required to issue
fractions of shares upon exercise of a Right or to
distribute certificates which evidence fractional shares.
In lieu of fractional shares, the Company shall pay to the
registered holders of Right Certificates at the time such
Right Certificates are exercised as herein provided an
amount in cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of
this Section 14, the current market value of a 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)) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance
thereof expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Right Certificates (and
prior to the Distribution Date, the registered holders of
the Common Stock), and any registered holder of any Right
Certificate (or, prior to the Distribution Date, any
registered holder of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, any other
registered holder of the Common Stock), may, on his own
behalf and for his own benefit, enforce, and may institute
and maintain, any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual
or threatened violations of the obligations of any Person
subject to, this Agreement.
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
Common Stock;
(b) on and after the Distribution Date, the Right
Certificates will be transferable only on the registry books
of the Rights Agent and then if surrendered at the stock
transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in
Section 24), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and reasonable legal fees and
other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense incurred, without
negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect,
consequential or incidental loss or damage of any kind
whatsoever (including, without limitation, lost profits),
even if the Rights Agent has been advised of the likelihood
of such loss or damage.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right
Certificate or Certificate for Common Stock or for other
securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it, acting with reasonable
care, to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or
persons.
If and for so long as the Rights are listed on the
New York Stock Exchange or the American Stock Exchange, the
Rights Agent, if its principal offices are located outside
New York City, shall maintain in the New York City area
facilities for the servicing of the Rights in the area of
Manhattan located south of Chambers Street. Such facilities
may consist of either an office or agency where transactions
in the Rights are serviced directly or a "drop" where Common
Stock certificates, Right Certificates, and other
instruments relating to transactions in Rights may be
received for redelivery to an office or agency outside New
York City, all in accordance with the applicable rules of
the stock exchange on which the Rights are listed.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. 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 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 such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so
countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its
prior name or in its changed name, and in all such cases
such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the
President, any Vice President, or the Secretary of the
Company and delivered to the Rights Agent, and such
certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals
contained in this Agreement or in the 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
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 adjustment required under
the provisions of Section 11 or 13 or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice
of any such adjustment), nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock to be
issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of stock 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
performance by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the
Board, the President, any Vice President or the Secretary of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise
or transfer without first obtaining the Company's approval.
Section 21. Change of Rights Agent. Unless the
Company and the Rights Agent agree to a shorter time period,
the Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon
15 days' notice in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-
class mail. Unless the Company and the Rights Agent agree
to a shorter time period, the Company may remove the Rights
Agent or any successor Rights Agent upon 15 days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of
Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of 15
days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the 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 corporation
organized and doing business under the laws of the United
States or of the State of California (or of any other state
of the United States so long as such corporation is
authorized to do business as a banking institution in the
State of California) in good standing, having a stock
transfer office in the State of California, which is
authorized under such laws to exercise 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
$100,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as
Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of Common
Stock and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or
of the Rights 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 Expiration Date, the
Purchase Price per share or the number or kind or class of
shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at
its option and as provided herein, and notwithstanding the
provisions of Sections 11 and 13 of this Agreement, elect to
redeem all but not less than all of the then outstanding
Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock
dividend, reclassification or similar transaction occurring
after the date hereof (such redemption price being herein
referred to as the "Redemption Price") at any time up to the
Close of Business on the tenth Business Day after a Stock
Acquisition Date.
(b) Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, the
Company shall make a public announcement thereof, and from
and after the date of such announcement, without any further
action and without any further 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. As soon as practicable after the election of the
Board of Directors to redeem the Rights, the Company shall
give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such
holders 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 redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Notice of Proposed Actions. In case
the Company, after the Rights become exercisable, shall
propose (i) to pay any dividend payable in stock of any
class to the holders of its Common Stock or the Subject
Shares or to make any other distribution to the holders of
its Common Stock or Subject Shares (other than a regular
periodic cash dividend), or (ii) to offer to the holders of
its Common Stock or Subject Shares rights or warrants to
subscribe for or to purchase any additional shares of Common
Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Common Stock or Subject Shares
(other than a reclassification involving only the
subdivision of outstanding shares of Common Stock) or any
recapitalization or reorganization of the Company, or
(iv) to effect any consolidation or merger into or 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 more than 50
percent of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, or
(v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give
to each holder of a Right, in accordance with Section 25, a
notice of such proposed action, which shall specify the
record date for the purposes of such dividend, distribution
of rights or warrants, or the date on which such
reclassification, recapitalization, reorganization,
consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock and/or
Subject Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty days prior to
the record date for determining holders of the Common Stock
and/or Subject Shares for purposes of such action, and in
the case of any such other action, at least twenty days
prior to the date of the taking of such proposed action or
the date of participation therein by the holders of Common
Stock and/or Subject Shares, whichever shall be the earlier.
The failure to give notice required by this Section 24 or
any defect thereon shall not affect the legality or validity
of the action taken by the Company or the vote upon any such
action.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or
on the Company shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent)
as follows:
The MacNeal-Schwendler Corporation
815 Colorado Boulevard
Los Angeles, California 90041
Attention: President
Subject to the provisions of Section 21, any
notice or demand authorized by this Agreement to be given or
made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with
the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
400 South Hope Street
Los Angeles, California 90071
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to or on the
holder of any Right Certificate shall be sufficiently given
or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to
the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of
Right Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the
provisions hereof in any manner which the Company may deem
necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates; provided,
however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a
time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any
other time period, unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this
Agreement to the contrary: (1) no supplement or amendment
shall be made which changes the Redemption Price, the
Purchase Price or the number of shares or Units for which a
Right is exercisable; and (2) the duration of the Rights may
not be shortened without the written consent of the
registered holders thereof (other than by a redemption of
the Rights pursuant to Section 23). Prior to the
Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders
of Common Stock.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become subject to the provisions of Section
7(f) hereof) for Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange
Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of this Section and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the
Common 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 subject to the provisions of Section 7(f) hereof)
held by each holder of Rights.
(c) In the event that there shall not be
sufficient authorized Common Stock to permit an exchange of
Rights as contemplated in accordance with this Section, the
Company shall take all such action as may be necessary to
authorize additional Common Stock or Equivalent Stock for
issuance upon exchange of the Rights.
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. Determination and Actions Taken by
the Board of Directors. For all purposes of this Agreement,
any calculation of the number of shares of Common Stock (or
other applicable securities hereunder) outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common
Stock (or other securities) of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) (as in effect on the date of
this Agreement) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers
specifically granted to such Board or to the Company, or as
may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power
to (i) interpret the provisions of this Agreement, and
(ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend
the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes
of clause (B) below, all omissions with respect to the
foregoing) which are done or made by the Board in good
faith, shall (A) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (B) not subject the Board to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or
equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock).
Section 31. 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 Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to
contracts to be made and performed entirely within such
State. The rights and obligations of the Rights Agent under
this Agreement shall be governed by and construed in
accordance with the laws in effect in such state.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Section 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.
Section 34. 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, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or
restriction shall nevertheless be valid, legal and
enforceable to the extent, if any, provided by such court or
authority, and (ii) 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.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year
first above written.
THE COMPANY:
THE MACNEAL-SCHWENDLER
CORPORATION
By: /s/ Thomas C. Curry
---------------------
Thomas C. Curry
President and Chief
Executive Officer
RIGHTS AGENT:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Mary Ann McElroy
---------------------
Mary Ann McElroy
Relationship Manager
Exhibit A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IN THE EVENT THAT THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
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 October 5, 1998 (the "Rights Agreement")
between The MacNeal-Schwendler Corporation, a Delaware
corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent"), to
purchase from the Company, unless the Rights have been
previously redeemed, at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to
the Expiration Date (as such term is defined in the Rights
Agreement), or the date, if any, on which the Rights evidenced
by this Certificate may be redeemed, at the stock transfer
office of the Rights Agent, or its successors as Rights Agent,
one one-hundredth of a fully paid and nonassessable share of
Junior Participating Preferred Stock ("Preferred Shares"), at
a purchase price of $35.00 (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly completed and executed. The
number of Rights evidenced by this Right Certificate as set
forth above (and the number of shares which may be purchased
upon exercise thereof), and the Purchase Price set forth
above, are the number and Purchase Price as of the date of the
Rights Agreement based on the shares of Common Stock of the
Company as constituted at such date.
Upon the occurrence of an event described in clause
(A), (B), (C) or (D) of Section 11(a)(ii) of the Rights
Agreement, the holder of any Rights that are, or were,
beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights
Agreement) or certain transferees thereof which engaged in, or
realized the benefit of, an event or transaction or
transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the
adjustment described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase
Price and the number and class of 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 Right Certificates, which limitations of rights
include the temporary suspension of the exercisability of such
Rights under specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and at the
principal office of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the stock transfer office of
the Rights Agent set forth above, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase such number
of shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate may be redeemed by
the Company at its option at a redemption price of $.01 per
Right.
No fractional shares will be issued upon the
exercise of any Rights evidenced hereby, but in lieu thereof a
cash payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares or of any other securities of the
Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive
dividends or 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 signatures of the proper
officers of the Company.
Dated as of ____________ ___, _____.
Attest:
__________________________ By: ________________________
Secretary Title:
Countersigned:
ChaseMellon Shareholder Services, L.L.C.
By:
Authorized Signature
[Form of Reverse Side of Right Certificate]
<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 Right Certificate.)
FOR VALUE RECEIVED, _____________________________
hereby sells, assigns and transfers unto ____________________
(please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ____________________ attorney to transfer the within
Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ____________ ___, _____
______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry
and to the best knowledge of the undersigned) by checking the
appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any Person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Date: ______________ ___, _____ _________________________
Signature
Signature Guaranteed:
<PAGE>
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the
face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To the Company and the Rights Agent:
The undersigned hereby irrevocably elects to
exercise _________________ Rights represented by this Right
Certificate and to purchase the shares issuable upon the
exercise of such Rights and requests that certificates for
such shares be issued in the name
of:
________________________________________________________.
(please print name, address and social security or
other identifying number)
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 print name, address and
social security or other identifying number)
Dated: ______________ ___, _____
Signature: _________________________
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies (after due inquiry
and to the best knowledge of the undersigned) by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement); and
(2) the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Date: __________ ___, _____ _______________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS
On October 5, 1998, the Board of Directors of The
MacNeal-Schwendler Corporation, a Delaware corporation (the
"Company"), declared a distribution of one Right for each
outstanding share of common stock (the "Common Shares") of
the Company. The distribution is to be made as of October
16, 1998 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to
purchase from the Company, initially, one one-hundredth of a
share of Junior Participating Preferred Stock ("Preferred
Shares") at a price of $35.00 (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement, dated as of
October 5, 1998, between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent.
Preferred Shares purchasable upon exercise of the
Rights will be entitled to dividends of 100 times the
dividends per share declared on the Common Shares and in the
event of liquidation will be entitled to a minimum
preferential liquidating distribution of $l00 per share and
an aggregate liquidating distribution per share of 100 times
the distribution made per Common Share. The Preferred
Shares will vote together with the Common Shares and in the
event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will
be entitled to receive 100 times the amount received per
Common Share.
Because of the Preferred Shares' dividend and
liquidation rights, the value when issued of the one one-
hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a
Qualified Offer (as defined below), the date of such public
announcement being called the "Stock Acquisition Date," or
(ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following
the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person
or group of 20% or more of the Company's general voting
power (the date of such earlier occurrence being called the
"Distribution Date"), the Rights will be evidenced by the
certificates representing the Common Shares and will be
transferred with and only with the Common Shares. New
Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference,
and the surrender for transfer of any certificate for Common
Shares, even without such notation or a copy of this Summary
of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date. The Rights will expire on the tenth
anniversary of the Record Date (the "Final Expiration
Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the
Company, as described below.
The Purchase Price payable, the number of shares
of common stock or other securities or property issuable
upon exercise of the Rights and the number of outstanding
Rights are subject to adjustment from time to time to
prevent dilution.
A "Qualified Offer" is a tender offer or exchange
offer for all outstanding Common Shares which is determined
by at least a majority of the members of the Board of
Directors to be adequate and otherwise in the best interests
of the Company and its stockholders.
In the event that any person becomes an Acquiring
Person other than by a purchase pursuant to a Qualified
Offer, proper provision shall be made so that each holder of
a Right, other than Rights beneficially owned by the
Acquiring Person (which will not be entitled to the benefit
of such adjustment) will thereafter have the right to
receive upon exercise that number of Common Shares or Common
Share equivalents having a market value of two times the
exercise price of the Right.
In the event that, at any time after an Acquiring
Person has become such, the Company is acquired in a merger
or other business combination transaction (other than a
merger which follows a Qualified Offer at the same or a
higher price) or 50% or more of its consolidated assets or
earning power are sold, proper provision will be made so
that each holder of a Right will thereafter have the right
to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the
exercise price of the Right.
At any time after an Acquiring Person has become
such, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group), in
whole or in part, at an exchange ratio of one Common Share
per Right (subject to adjustment).
Up to and including the tenth business day after a
Stock Acquisition Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to
exercise them will terminate and the only right of the
holders will be to receive the Redemption Price.
The terms of the Rights may be amended by the
Board of Directors without the consent of the holders of the
Rights at any time prior to the Distribution Date.
Thereafter the Rights may be amended to make changes which
do not adversely affect the interests of the holders of the
Rights, or which shorten or lengthen time periods, subject
to certain limitations set forth in the Rights Agreement.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company.
A copy of the Rights Agreement will be 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 and the exhibits thereto, each of which
is incorporated herein by reference.
<PAGE>
EXHIBIT C
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
THE MACNEAL-SCHWENDLER CORPORATION
The MacNeal-Schwendler Corporation, a Delaware
corporation (the "Corporation"), hereby certifies that the
following resolution has been duly adopted by the Board of
Directors of the Corporation:
RESOLVED, that pursuant to the authority granted
to the Board of Directors of the Corporation by the
Certificate of Incorporation, a series of shares of the
Preferred Stock of the Corporation is hereby established and
the number of shares constituting such series and the
designation thereof, and the rights, preferences, privileges
and restrictions of the shares of such series, are fixed and
established as follows:
I. Designation and Amount
The shares of such series shall be designated as
"Junior Participating Preferred Stock" (the "Junior
Preferred Stock") and the number of shares constituting the
Junior Preferred Stock shall be 2,000,000. Such number of
shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce
the number of shares of Junior Preferred Stock to a number
less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
II. Dividends and Distributions
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Junior Preferred
Stock with respect to dividends, the holders of shares
of Junior Preferred Stock, in preference to the holders
of Common Stock of the Corporation, shall be entitled
to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each
such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior
Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction
of a share of Junior Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of
Junior Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such
event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Junior Preferred Stock as provided in
paragraph (A) of this Section immediately after it
declares
a dividend or distribution on the Common Stock (other than
a
dividend payable in shares of Common Stock); provided
that,
in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Junior Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of
such
shares, or unless the date of issue is a Quarterly
Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred
Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative
from
such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Junior Preferred Stock in an amount less than
the
total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of
Junior Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Junior Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted
to
a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, or in any other
resolutions of the Board creating a series of Preferred
Stock or any similar stock, or by law, the holders of
shares of Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall
vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, in the Corporation's
Certificate of Incorporation or as otherwise provided
by law, holders of Junior Preferred Stock shall have
no voting rights.
IV. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as
provided in Section II are in arrears, thereafter and
until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Junior Preferred
Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Junior Preferred Stock, except dividends
paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are
payable or in arrears in proportion to the total
amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange
for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred
Stock, or any shares of stock ranking on a parity
with the Junior Preferred Stock, except in
accordance with a purchase offer made in writing
or by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences of
the respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of
this Section IV purchase or otherwise acquire such
shares at such time and in such manner.
V. Reacquired Shares
Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Junior Preferred Stock unless, prior thereto, the
holders of shares of Junior Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the
holders of shares of Junior Preferred Stock shall be
entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except distributions made
ratably on the Junior Preferred Stock and all such parity
stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
VII. Consolidation, Merger, etc.
In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any
other property, then in any such case each share of Junior
Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to
the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
VIII. Redemption
The shares of Junior Preferred Stock shall not be
redeemable.
IX. Rank
The Junior Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock.
X. Amendment
The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would
alter or change the powers, preferences or special rights of
the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Junior Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of
Designations is executed on behalf of the Corporation by its
President and attested by its Secretary this 5th day of
October, 1998.
---------------------------------
Thomas C. Curry
President
Attest:
- --------------------------
Louis A. Greco
Secretary
<PAGE>
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
THE MACNEAL-SCHWENDLER CORPORATION
The MacNeal-Schwendler Corporation, a Delaware
corporation (the "Corporation"), hereby certifies that the
following resolution has been duly adopted by the Board of
Directors of the Corporation:
RESOLVED, that pursuant to the authority granted
to the Board of Directors of the Corporation by the
Certificate of Incorporation, a series of shares of the
Preferred Stock of the Corporation is hereby established and
the number of shares constituting such series and the
designation thereof, and the rights, preferences, privileges
and restrictions of the shares of such series, are fixed and
established as follows:
I. Designation and Amount
The shares of such series shall be designated as
"Junior Participating Preferred Stock" (the "Junior
Preferred Stock") and the number of shares constituting the
Junior Preferred Stock shall be 2,000,000. Such number of
shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce
the number of shares of Junior Preferred Stock to a number
less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
II. Dividends and Distributions
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Junior Preferred
Stock with respect to dividends, the holders of shares
of Junior Preferred Stock, in preference to the holders
of Common Stock of the Corporation, shall be entitled
to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each
such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Junior Preferred
Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction
of a share of Junior Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares
of Junior Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Junior Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares
a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Junior Preferred
Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Junior Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Junior
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the
payment thereof.
III. Voting Rights
The holders of shares of Junior Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, or in any other
resolutions of the Board creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares
of Junior Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of
the Corporation.
(C) Except as set forth herein, in the Corporation's
Certificate of Incorporation or as otherwise provided by
law, holders of Junior Preferred Stock shall have no voting
rights.
IV. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as
provided in Section II are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Junior Preferred Stock, except
dividends paid ratably on the Junior Preferred Stock
and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either
as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred
Stock, or any shares of stock ranking on a parity
with the Junior Preferred Stock, except in
accordance with a purchase offer made in writing
or by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences of
the respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this
Section IV, purchase or otherwise acquire such shares at
such time and in such manner.
V. Reacquired Shares
Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Junior Preferred Stock unless, prior thereto, the
holders of shares of Junior Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the
holders of shares of Junior Preferred Stock shall be
entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except distributions made
ratably on the Junior Preferred Stock and all such parity
stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
VII. Consolidation, Merger, etc.
In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any
other property, then in any such case each share of Junior
Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to
the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
VIII. Redemption
The shares of Junior Preferred Stock shall not be
redeemable.
IX. Rank
The Junior Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock.
X. Amendment
The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would
alter or change the powers, preferences or special rights of
the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Junior Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its President and
attested by its Secretary this 5th day of October, 1998.
/s/ Thomas C. Curry
-------------------
Thomas C. Curry
President
Attest:
/s/ Louis A. Greco
- ------------------
Louis A. Greco
Secretary
<PAGE>
[MACNEAL-SCHWENDLER LETTERHEAD]
October 16, 1998
TO OUR STOCKHOLDERS:
On September 19, 1988, the Board of Directors of The
MacNeal-Schwendler Corporation adopted a Shareholder Rights
Plan and declared a distribution of rights to shareholders
to deal with the very serious problem of unilateral actions
by hostile acquirors which are calculated to deprive the
Company's Board and shareholders of their ability to determine
the destiny of the Company. This plan was in effect for ten
years, but recently expired on September 19, 1998.
In response, your Board of Directors has adopted a new
Stockholder Rights Plan (the "Plan") and declared a distribution
of rights, at the rate of one right for each share of the
Company's common stock held, to stockholders of record on October
16, 1998. This letter explains our reasons for adopting the new
Plan. A summary description of the Plan is enclosed, and we urge
you to read it carefully. No action is necessary on your part.
After careful consideration your Board concluded that having
a Stockholder Rights Plan in place is a reasonable and appropriate
response to the risks posed to stockholder interests by coercive
or inadequate takeover attempts, including creeping accumulations
in the open market, partial and two-tier tender offers and other
tactics that do not treat all stockholders equally. The Board
believes that such tactics, which continue to be commonplace in
the takeover environment, are not in the best interests of
stockholders and that the new Plan will enable the Board to act
more effectively in protecting stockholder values.
The distribution of rights to stockholders will have certain
anti-takeover effects. The Rights will cause substantial dilution
to a person or group that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being
acquired, or in a manner or on terms not approved by the Board of
Directors. But like the prior rights plan, the Plan is not
intended to prevent a takeover of the Company and will not do so.
The existence of the Plan should not deter any prospective offeror
willing to make an all cash offer at a full and fair price or to
negotiate in good faith with the Board. Nor should the Plan
interfere with any merger or other business combination approved
by the Board.
Issuance of the rights does not in any way weaken the
financial strength of the Company nor interfere with its business
plans. The issuance of the rights has no dilutive effect, will
not affect reported earnings per share, is not taxable to the
Company or to you, and will not change the way in which you can
currently trade the Company's shares. As explained in detail in
the summary, the rights only will be exercisable if and when a
situation arises which triggers their effectiveness. The rights
are intended to protect you against being deprived of your right
to share in the full measure of the Company's long-term potential.
The Plan was not adopted in response to any specific effort to
acquire control of the Company.
Similar plans have been adopted by more than 800 major
companies. If you have any questions, please call Louis A. Greco
at (213) 258-9111.
Sincerely,
__________________ ___________________
George N. Riordan Thomas C. Curry
Chairman of the Board President and
Chief Executive Officer
