SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 1996
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NORTEK, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-6112 05-0314991
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
50 Kennedy Plaza, Providence, RI 02903-2360
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (401) 751-1600
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
On April 1, 1996, the Board of Directors of Nortek, Inc. (the
"Company") voted to amend and restate the Company's Rights Agreement (the
April 1, 1996 Agreement being referred to herein as the "Second Amended and
Restated Rights Agreement") between the Company and State Street Bank and
Trust Company, as Rights Agent. The events preceding this amendment and
restatement are as follows:
On March 31, 1986, the Company initially declared a dividend
distribution of one preference stock purchase right (a "Right"' collective,
the "Rights") for every outstanding share of Common Stock, $1.00 par value
(the "Common Stock") of the Company. The distribution was payable on April
11, 1986 (the "Divided Record Date") to the shareholders of record at the
close of business on the Divided Record Date. On March 18, 1991, the
Company amended and restated the Rights Agreement adopted on March 31, 1986
between the Company and State Street Bank and Trust Company, as Rights
Agent (the March 18,1991 Agreement being referred to herein as the "Amended
and Restated Rights Agreement"). As of October 6, 1993, the Company
amended the Amended and Restated Rights Agreement as provided in Amendment
No. 1 to the Amended and Restated Rights Agreement. As of September 27,
1995, the Company further amended the Amended and Restated Rights Agreement
as provided in Amendment No. 2 to the Amended and Restated Rights
Agreement.
The Second Amended and Restated Rights Agreement, sets forth the terms
of the Rights. It is filed as Exhibit 1 attached hereto and is
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits:
1. Second Amended and Restated Rights Agreement dated as of April 1,
1996, ("Second Amended and Restated Rights Agreement") between
the Company and State Street Bank and Trust Company, as Rights
Agent.
2. Form of Rights Certificate (attached as Exhibit B to the Second
Amended and Restated Rights Agreement). Pursuant to the Rights
Agreement, printed Rights Certificates will not be mailed until
the Distribution Date (as defined in the Second Amended and
Restated Rights Agreement).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NORTEK, INC.
Date: April 2, 1996 By: /s/Richard L. Bready
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Title: Chairman
EXHIBIT INDEX
The following designated exhibits are filed herewith: Page Number
Exhibit
1. Second Amended and Restated Rights Agreement 5
dated as of April 1, 1996 ("Second Amended
and Restated Rights Agreement") between the
Company and State Street Bank and Trust Company,
as Rights Agent.
2. Form of Rights Certificate (attached as
Exhibit B to the Second Amended and Restated
Rights Agreement). Pursuant to the Rights
Agreement, printed Rights Certificates will
not be mailed until the Distribution Date (as
defined in the Rights Agreement). 51
EXHIBIT 1
NORTEK, INC.
and
STATE STREET BANK AND TRUST COMPANY,
as Rights Agent
Second Amended and Restated Rights Agreement
Dated as of April 1, 1996
RIGHTS AGREEMENT
INDEX
Page
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SECTION 1. CERTAIN DEFINITIONS 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT 6
SECTION 3. ISSUE OF RIGHT CERTIFICATES 6
SECTION 4. FORM OF RIGHT CERTIFICATES 7
SECTION 5. COUNTERSIGNATURE AND REGISTRATION 8
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHT CERTIFICATES 9
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS 10
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES 11
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF
PREFERENCE STOCK; COVENANTS 11
SECTION 10.PREFERENCE STOCK RECORD DATE; ETC 13
SECTION 11.ANTIDILUTION ADJUSTMENTS 14
SECTION 12.CERTIFICATE OF ADJUSTMENTS 22
SECTION 13.CONSOLIDATION, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER 22
SECTION 14.FRACTIONAL RIGHTS AND FRACTIONAL SHARES 24
SECTION 15.RIGHTS OF ACTION 25
SECTION 16.AGREEMENT OF RIGHT HOLDERS 25
SECTION 17.RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER 26
SECTION 18.CONCERNING THE RIGHTS AGENT 26
SECTION 19.MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT 27
SECTION 20.DUTIES OF RIGHTS AGENT 27
SECTION 21.CHANGE OF RIGHTS AGENT 30
SECTION 22.ISSUANCE OF NEW RIGHT CERTIFICATES 30
SECTION 23.REDEMPTION AND TERMINATION 31
SECTION 24.EXCHANGE 31
SECTION 25.NOTICE OF PROPOSED ACTIONS 33
SECTION 26.NOTICES 34
SECTION 27.SUPPLEMENTS AND AMENDMENTS 34
SECTION 28.SUCCESSORS 35
SECTION 29.DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS; ETC. 35
SECTION 30.BENEFITS OF THIS AGREEMENT 35
SECTION 31.GOVERNING LAW 35
SECTION 32.COUNTERPARTS 35
SECTION 33.DESCRIPTIVE HEADINGS 36
SECTION 34.SEVERABILITY 36
RIGHTS AGREEMENT
This Second Amended and Restated Rights Agreement, dated as of April
1, 1996 (the "Rights Agreement"), amends and restates the Rights Agreement
dated as of March 31, 1986, as amended and restated as of March 18, 1991,
as amended as of October 6, 1993 and as amended as of September 27, 1995 by
and between Nortek, Inc., a Delaware corporation (the "Company"), and State
Street Bank and Trust Company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on March 31, 1986, the Board of Directors of the Company (the
"Board") authorized the issuance of rights (collectively, the "Rights," and
individually a "Right"), each Right being a right to purchase, on the terms
and subject to the provisions of this Agreement, one one-hundredth of a
share of the Company's Series A Participating Preference Stock (the
"Preference Stock") (or in certain circumstances provided in this
Agreement, the Common Stock or other securities of the Company or of
certain other Persons); and
WHEREAS, on March 31, 1986 (the "Declaration Date") the Board
authorized and declared a dividend distribution of one Right for every
share of Common Stock of the Company outstanding at the close of business
on April 11, 1986 (the "Dividend Record Date") and authorized the issuance
of, and agreed to issue, one Right (as such number may be adjusted in
accordance with Sections 11(i) or 11(o) hereof) for every share of Common
Stock of the Company issued between the Dividend Record Date and the
Distribution Date; and
WHEREAS, on April 1, 1996, the Board adopted resolutions providing for
the further amendment and extension of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings indicated:
(a) The term "Acquiring Person" shall mean any Person who or which,
together with all Affiliates of such Person, acquires Beneficial Ownership
(whether such Beneficial Ownership is of shares of Common Stock, shares of
Special Common Stock or shares of Common Stock and Special Common Stock) of
17% or more of the then outstanding shares of Common Stock and Special
Common Stock (taken together as a single class, treating each share of
Special Common Stock outstanding as one share of Common Stock outstanding
for the purposes of calculating such Beneficial Ownership); provided,
however, that none of (i) the Company, (ii) any wholly owned Subsidiary of
the Company, (iii) any employee benefit plan of the Company or any wholly
owned Subsidiary of the Company, or any trustee in respect thereof acting
in such capacity, (iv) any Exempt Person or (v) any Person who would
otherwise become an Acquiring Person solely as a result of decreases in the
outstanding number of shares of Common Stock and Special Common Stock,
provided that such Person does not thereafter purchase or otherwise acquire
Beneficial Ownership of any additional shares, shall be an "Acquiring
Person" for any purpose of this Agreement.
(b) The term "Affiliate", with respect to any Person, shall mean any
other Person who is, or who would be deemed to be, an "affiliate" or an
"associate" of such Person within the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such
Rule is in effect on the Declaration Date.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own" or have "Beneficial Ownership" of, any
securities:
(i) which such Person or any of such Person's Affiliates has
Beneficial Ownership of within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as such
Rule is in effect on April 1, 1996.
(ii) which such Person or any of such Person's Affiliates has,
directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or after the passage of time)
pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion, exchange
or other rights (other than the Rights), warrants or options, or
otherwise; provided, however, that for purposes of this clause
(A) a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's
Affiliates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that for purposes of this clause (B)
a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own any security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii)which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate of such Person with which such
Person or any of such Person's Affiliates has any agreement,
arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except as provided in the
proviso to Section l(c)(ii)(B) hereof) or disposing of any
securities of the Company;
provided, however, that for purposes of this Section 1(c) a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own, (A)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Common Stock Event, (B) securities issuable upon exercise
of Rights which were held by a Person or its Affiliates prior to the
Distribution Date as long as such Person is not responsible for the
occurrence of the Common Stock Event giving rise to the Distribution Date;
and provided, further, however, that nothing in this Section 1(c) shall
cause a Person engaged in business as an underwriter of securities to be
the Beneficial Owner of, or to Beneficially Own, any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition.
(d) The term "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in The State of Rhode Island
or The Commonwealth of Massachusetts are authorized or obliged by law or
executive order to close.
(e) The term "Close of Business" on any given date shall mean 5:00
P.M., Providence, Rhode Island time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., Providence,
Rhode Island time, on the next succeeding Business Day.
(f) The term "Common Stock" shall mean the Common Stock, $1.00 par
value, of the Company; provided, however, that the term "Common Stock" when
used with respect to any Person other than the Company shall mean the
common stock (or other equity securities) with the greatest voting power
(or similar rights) of such Person, or if such Person is a Subsidiary of
another Person, the Person who ultimately controls such first mentioned
Person.
(g) The term "Common Stock Event" shall mean the occurrence of any
event described in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or
(c) of the first sentence of Section 13 hereof.
(h) The term "Directors" shall mean the members of the Board at the
time then in office.
(i) The term "Disqualified Transferee" shall mean any Person who is a
direct or indirect transferee of any Right from an Acquiring Person or an
Affiliate of an Acquiring Person and becomes such a transferee (i) after
the occurrence of a Common Stock Event or (ii) prior to or concurrently
with the Acquiring Person becoming such and receives such Right pursuant to
a transfer (whether or not for value) (A) from the Acquiring Person to
holders of its Common Stock or other equity securities or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Right or (B) which a majority of
the Directors of the Company reasonably determines is part of a plan,
arrangement or understanding which has as a primary purpose or effect, the
avoidance of Section 7(e) hereof.
(j) The term "Distribution Date" shall mean the date which is the
later of (A) the earlier of (x) the tenth Business Day following the Stock
Acquisition Date or (y) the tenth Business Day following the Offer
Commencement Date or (B) such specified or unspecified date thereafter
which is on or after the Dividend Record Date, as may be determined by a
majority of the Directors; provided, however, that if such earlier date
occurs prior to the Dividend Record Date, the "Distribution Date" shall be
the Dividend Record Date.
(k) The term "Exempt Person" shall mean Richard L. Bready and Bready
Associates, a general partnership, and the general partners of Bready
Associates solely in their capacity as such general partners; provided,
however, that in the event that Richard L. Bready ceases to be a general
partner of Bready Associates, Bready Associates will no longer be an Exempt
Person if it thereafter acquires, directly or indirectly, Beneficial
Ownership of any additional shares of Common Stock or Special Common Stock,
other than shares of Common Stock or Special Common Stock acquired as a
result of a stock split, stock dividend or similar corporate transaction.
(l) The term "Offer Commencement Date" shall mean the date of the
commencement of, or the first public announcement of the intent of any
Person, other than the Company, an Exempt Person, a Subsidiary of the
Company or any employee benefit plan of the Company, (including any
statement of such intention appearing in any publicly available document
filed with any governmental authority, other than documents made publicly
available as a result of subpoena or other legal process) to commence a
tender or exchange offer if, upon consummation thereof, the Person and
Affiliates thereof would be the Beneficial Owner of 30% or more of the then
outstanding shares of Common Stock or Special Common Stock (taken together
as a single class, treating each share of Special Common Stock outstanding
as one share of Common Stock outstanding for the purposes of calculating
such Beneficial Ownership) (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights).
(m) The term "Person" shall mean a corporation, association,
partnership, joint venture, trust, organization, business, individual or
government or any governmental agency or political subdivision thereof.
(n) The term "Preference Stock" shall mean the Series A Participating
Preference Stock, par value $1.00 per share, of the Company, having the
rights and preferences set forth in the form of Certificate of
Incorporation of the Company attached hereto, in relevant part, as Exhibit
A.
(o) The term "Special Common Stock" shall mean the Special Common
Stock, $1.00 par value per share, of the Company.
(p) The term "Stock Acquisition Date" shall mean the later of (i) the
date of the first public announcement by the Company or an Acquiring Person
(or an Affiliate thereof) that an Acquiring Person has become such
(including the first date on which any filing with any governmental
authority disclosing that an Acquiring Person has become such becomes
available to the public) or (ii) the date on which an executive officer of
the Company has actual knowledge that an Acquiring Person has become such.
(q)The term "Subsidiary" shall mean any Person of which the Company
(or other specified parent) now or hereafter shall at the time own directly
or indirectly through a Subsidiary or Subsidiaries at least a majority of
the outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally, or holds directly, or indirectly through a
Subsidiary or Subsidiaries at least a majority of partnership or similar
interests, or is a general partner. The term "Wholly Owned Subsidiary"
shall mean any Subsidiary of which all of the outstanding capital stock (or
other shares of beneficial interest) entitled to vote generally other than
directors' qualifying shares, is owned by the Company (or other specified
Person) directly, or indirectly through one or more Wholly Owned
Subsidiaries.
(r) The following terms defined elsewhere in this Agreement in the
Sections set forth below shall have the respective meanings therein
defined:
Term Definition
-------------------------------------------
"Act" Section 9(e)
"Board" Preamble
"Closing Price" Section 11(d)
"Common Stock Equivalents" Section 11(a)(iii)
"Company" Preamble
"Current Market Price" Section 11(d)
"Current Value" Section 11(a)(iii)
"Declaration Date" Preamble
"Dividend Record Date" Preamble
"Equivalent Preference Stock" Section 11(b)
"Excess Value" Section 11(a)(iii)
"Exchange Act" Section l(b)
"Exchange Ratio" Section 24(a)
"Expiration Date" Section 7
"Officers' Certificate" Section 20(b)
"Other Consideration" Section 6(a)
"Preference Stock" Preamble
"Principal Office" Section 5
"Purchase Price" Sections 4(a); 11(a)(ii); 13
"Redemption Price" Section 23
"Right Certificate" Section 3(a)
"Rights" Preamble
"Rights Agent" Preamble; Section 21
"Substitution Period" Section 11(a)(iii)
"Summary of Rights" Section 3(b)
"Trading Day" Section 11(d)
Any determination of any fact or matter required by the definitions
contained in this Agreement shall be conclusive on all concerned if
approved by a majority of the Directors then in office.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the
Common Stock), and the Rights Agent hereby accepts such appointment upon
the terms and conditions hereof. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
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(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates
representing shares of the Common Stock registered in the names of the
holders of the Common Stock (which certificates shall be deemed also to be
certificates for the associated Rights) and not by separate Right
Certificates and (ii) the Rights will be transferable only in connection
with the transfer of the associated shares of Common Stock. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B hereto (each a
"Right Certificate"), evidencing, in the aggregate, that number of Rights
to which such holder is entitled in accordance with the provisions of this
Agreement. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11(o) hereof, at
the time of distribution of the Right Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Right Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Right Certificates. The Rights are exercisable
only in accordance with the provisions of Section 7 hereof and are
redeemable only in accordance with Section 23 hereof.
(b) The Company caused a copy of a Summary of Rights (the "Summary of
Rights") to be sent, by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the Close of Business on the Dividend
Record Date, at the address of such holder shown on the stock transfer
records of the Company. With respect to certificates for the Common Stock
outstanding as of the Dividend Record Date, until the Distribution Date,
the Rights associated with the shares of Common Stock represented by such
certificates will be evidenced by such certificates for the Common Stock
and the registered holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), the surrender
for transfer of any of the certificates representing shares of the Common
Stock outstanding on the Dividend Record Date shall also constitute the
transfer of the Rights associated with, with or without a copy of the
Summary of Rights, the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued (whether originally issued or delivered from the Company's treasury)
after the Dividend Record Date, but prior to the earliest of (i) the
Distribution Date, (ii) the Expiration Date or (iii) the redemption of the
Rights. Certificates representing such shares of Common Stock and
certificates issued on transfer of such shares of Common Stock, with or
without a copy of the Summary of Rights, prior to the Distribution Date
(or earlier expiration or redemption of the Rights) shall be deemed also to
be certificates for the associated Rights, and commencing as soon as
reasonably practicable following April 1, 1996 shall bear the following
legend (or a legend substantially in the form thereof):
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between the issuer
and State Street Bank and Trust Company, as Rights Agent (the "Rights
Agent"), dated as of March 31, 1986, as amended and restated on March
18, 1991, as amended on October 6, 1993 and September 27, 1995, and as
further amended and restated on April 1, 1996 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
both the issuer and the Rights Agent. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the registered holder of
this certificate a copy of the Rights Agreement without charge within
five days after receipt of a written request therefore. Under certain
circumstances as set forth in the Rights Agreement, Rights issued to,
or held by any Person who is, was, becomes or acquires shares from an
Acquiring Person or any Affiliate thereof (as each such term is
defined in the Rights Agreement), whether currently held by or on
behalf of such Person, Affiliate or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date (or the earlier redemption, expiration or termination
of the Rights), the Rights associated with the Common Stock shall be
evidenced by the Common Stock certificates alone, and the registered
holders of such Common Stock shall also be the registered holders of the
associated Rights, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the form of assignment and the form
of exercise notice to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Dividend
Record Date (or, if the shares pursuant to which the Rights are attached
are issued thereafter, such date of issuance), shall include the date of
countersignature, and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preference Stock
as shall be set forth therein at a price of $72.00 per each one
one-hundredth of a share (the "Purchase Price"), but the amount and type of
securities issuable upon the exercise of each Right and the Purchase Price
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Sections 3(a) or 22
hereof that represents Rights beneficially owned by (i) any Acquiring
Person or any Affiliate of an Acquiring Person or (ii) any Disqualified
Transferee, and any other Right Certificate issued pursuant to Section 6 or
11 hereof upon the transfer, exchange, replacement or adjustment of any
such Right Certificate shall contain (to the extent feasible) 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 (which includes both affiliates and associates) of an
Acquiring Person (as each such term is defined in the Rights
Agreement). Accordingly, this Right Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement. The Rights Agent
will mail to the registered holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge,
upon written request.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary 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 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.
Following the Distribution Date, the Rights Agent will keep, or cause
to be kept, at that office of the Rights Agent at which it conducts its
corporate trust affairs (its "Principal Office"), books for registration
and transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of countersignature thereof by the Rights
Agent.
SECTION 6 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14 hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the earlier of the Close of Business on the Expiration Date or the
redemption of the Rights, 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 a like
number of one one-hundredths of a share of Preference Stock (or, following
a Common Stock Event, Common Stock and/or such other securities, cash or
other property as shall be issuable in respect of the Rights in accordance
with the terms of this Agreement (such other securities, cash or other
property being referred to herein as "Other Consideration")) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the Principal Office of
the Rights Agent accompanied by a signature guarantee and such other
documentation as the Rights Agent may reasonably request. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner from whom the Rights evidenced by such
Rights Certificate are to be transferred (or the Beneficial Owner to whom
such Rights are to be transferred) or Affiliates thereof as the Company
shall reasonably request. Thereupon, subject to Sections 4(b), 7(e) and 14
hereof, the Company shall execute and the Rights Agent shall countersign
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment by the holders of Rights 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 which the Company
is not required to pay in accordance with Section 9(d) hereof.
(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, the receipt of indemnity or security satisfactory to them, and
upon 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 countersignature and 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) Except as otherwise provided herein, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby in whole or in
part at any time from and after the Distribution Date and at or prior to
the Close of Business on March 31, 2006 (the "Expiration Date") (or the
earlier redemption of the Rights). At the Expiration Date or earlier
redemption of the Rights, all Rights will be extinguished and all Right
Certificates shall become null and void. To exercise Rights, the
registered holder of the Right Certificate evidencing such Rights shall
surrender such Right Certificate, with the form of election to purchase on
the reverse side thereof and the certificate contained therein duly
executed, to the Rights Agent at the Principal Office of the Rights Agent,
together with payment in cash, or by certified check or bank check, of the
Purchase Price with respect to the total number of one one-hundredths of a
share of Preference Stock (or, after a Common Stock Event, shares and/or
similar units of Common Stock and/or Other Consideration) as to which the
Rights are exercised (which payment shall include any additional amount
payable by such Person in accordance with Section 9(d) hereof). The Rights
Agent shall promptly deliver to the Company all payments of the Purchase
Price received in respect of Right Certificates accepted for exercise.
(b) The Purchase Price for each one one-hundredth of a share of
Preference Stock issuable pursuant to the exercise of a Right shall
initially be $72.00, shall be subject to adjustment as provided in Section
11 hereof and shall be payable in lawful money of the United States of
America.
(c) Upon receipt of a Right Certificate representing the Rights, with
the form of election to purchase set forth on the reverse side thereof and
the certificate contained therein duly executed, accompanied by payment of
the Purchase Price, with respect to each Right so exercised, the Rights
Agent, subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall
thereupon promptly (i) requisition from any transfer agent of the
Preference Stock (or from the Company if there shall be no such transfer
agent, or make available if the Rights Agent is such transfer agent)
certificates for the total number of one one-hundredths of a share of the
Preference Stock to be purchased and the Company hereby irrevocably
authorizes such transfer agent to comply with any such request, (ii) after
receipt of such certificates, 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 in writing by such holder, and
(iii) when appropriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of a fractional share in accordance with
Section 14 hereof and after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate. After the
occurrence of a Common Stock Event, the Company will make all necessary
arrangements so that the Common Stock and/or Other Consideration then
deliverable in respect of the Rights are available for distribution by the
Rights Agent. For purposes of this Section 7, the Rights Agent shall be
entitled to rely, and shall be protected in relying, on an Officers'
Certificate from the Company to the effect that the Distribution Date has
occurred.
(d) Subject to Sections 4(b), 7(e) and 14 hereof, 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 executed and
delivered by the Company to the Rights Agent and countersigned and
delivered by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Common Stock Event, any Rights
beneficially owned by (i) an Acquiring Person or an Affiliate of an
Acquiring Person or (ii) a Disqualified Transferee shall become null and
void without any further action, and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but the Company shall have no
liability to any holder of Right Certificates or other Person, and none of
the terms of this Agreement or the Rights shall be deemed waived with
respect to such holder or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any Affiliates of
an Acquiring Person or Disqualified Transferees hereunder or any failure to
have a legend placed on any Right Certificate in accordance with Section
4(b) hereof or on any Common Stock certificate in accordance with Section
3(c) hereof.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of any Right Certificate
upon the occurrence of any purported exercise thereof 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 thereof as the Company shall reasonably
request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of and accepted for
exercise, or surrendered for the purpose of redemption, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of
its agents (other than the Rights Agent), be delivered to the Rights Agent
for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of
this Agreement. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9.RESERVATION AND AVAILABILITY OF SHARES OF PREFERENCE STOCK;
COVENANTS.
(a) The Company covenants and agrees as long as any of the Rights are
outstanding, it will use reasonable efforts to be reserved and kept
available out of its authorized and unissued shares of Preference Stock
(or, following the occurrence of a Common Stock Event, out of its
authorized and unissued shares or similar units of Common Stock and/or
other securities, or out of its authorized and issued shares held in its
treasury), the number of shares of Preference Stock (or, following a Common
Stock Event, shares or units of Common Stock and/or other securities) that,
except as provided in Section 11(a)(iii) hereof, would then be sufficient
to permit the exercise in full of all outstanding Rights; provided,
however, that the reservation of such shares shall be subject and
subordinate to any other reservation of such shares made by the Company at
any time for any lawful purpose; provided, further, however, that in no
event shall such failure to so reserve shares affect the rights of any
holder of Rights hereunder.
(b) The Company covenants and agrees that so long as the Preference
Stock (or, following a Common Stock Event, the Common Stock or other
securities) issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to
cause all shares (or similar units) reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that each one one-hundredth of a share
of Preference Stock (or, following a Common Stock Event, each share and/or
similar unit of Common Stock or other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such
shares (or units), subject to payment of the Purchase Price, be duly and
validly authorized and issued and fully paid and nonassessable.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and similar
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any shares of Preference Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar units of
Common Stock or other securities) upon the exercise of Rights; provided,
however, that 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 in the issuance or delivery of
certificates for any number of one one-hundredths of a share of Preference
Stock (or, following the occurrence of a Common Stock Event, shares and/or
similar units of Common Stock or other securities) 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 for a
number of one one-hundredths of a share of Preference Stock (and, following
the occurrence of a Common Stock Event, all shares and/or similar units of
Common Stock or Other Consideration) 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) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Common Stock Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the securities issuable
upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, or (B) the Expiration Date or earlier
redemption of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(e), the exercisability of the Rights in
order to prepare and file such registration statement or to permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
SECTION 10.PREFERENCE STOCK RECORD DATE; ETC.
Each person in whose name any certificate for any number of one
one-hundredths of a share of Preference Stock (or, following the occurrence
of a Common Stock Event, shares and/or similar units of Common Stock or
other securities) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such fractional
shares of Preference Stock (or such shares and or units of Common Stock or
other securities, as the case may be) represented thereby, and such
certificate shall be dated, the date which is the later of (i) the date
upon which the Right Certificate evidencing such Rights was duly
surrendered or (ii) the date upon which payment of the Purchase Price (and
any applicable transfer taxes) in respect thereof was made; provided,
however, that if such date is a date upon which the relevant transfer books
of the Company are closed, such person shall be deemed to have become the
record holder of such shares (or units) on, and such certificate shall be
dated, the next succeeding Business Day on which such transfer books of the
Company are open; provided, further, that the Company covenants and agrees
that it shall not close such transfer books for a period exceeding ten
consecutive days. Prior to the exercise of the Rights evidenced thereby
(which shall be deemed to have occurred on the date such certificate shall
be dated in accordance with this Section 10), the holder of a Right
Certificate shall not be entitled to any rights of a security holder of the
Company with respect to shares of Common Stock (and/or such shares or
similar units of Other Consideration) for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as expressly provided herein.
SECTION 11.ANTIDILUTION ADJUSTMENTS.
The Purchase Price and the number and kind of 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 that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Preference Stock
payable in shares of Preference Stock, (B) subdivide the outstanding
Preference Stock, (C) combine the outstanding Preference Stock into a
smaller number of shares, or (D) issue, change, or alter any shares of its
capital stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, then, and in each
such case, the Purchase Price in effect at the time of the record date for
such dividend or the effective time of such subdivision, combination,
reclassification or recapitalization, and the number and kind of shares of
Preference or capital stock issuable at such time, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of Preference
Stock or other capital stock which, if such Right had been exercised
immediately prior to such time and at a time when the Preference Stock (or
other capital stock) transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination, reclassification or
recapitalization. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided 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
(A) any Person shall at any time after the Declaration Date
become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any Acquiring
Person, at any time after the Declaration Date, directly or
indirectly, (1) shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or surviving
corporation of such merger or combination and the Common Stock and the
Special Common Stock of the Company shall remain outstanding and
unchanged, (2) shall, in one or more transactions, transfer any assets
to the Company in exchange (in whole or in part) for shares of any
class of its equity securities or for securities exercisable for or
convertible into shares of any such class or otherwise obtain from the
Company, with or without consideration, any additional shares of any
such class or securities exercisable for or convertible into shares of
any such class (other than as part of a pro rata distribution to all
holders of such class), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one transaction or
a series of transactions), to, from or with the Company or any of the
Company's Subsidiaries, assets with an aggregate fair market value in
excess of 25% of the assets of the Company on terms and conditions
less favorable to the Company than the Company would be able to obtain
through arm's-length negotiation with an unaffiliated third party, (4)
shall engage in any transaction with the Company not in the ordinary
course of the Company's business involving the sale, purchase, lease,
exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) of assets having an aggregate
fair market value of more than $5,000,000, (5) shall receive any
compensation from the Company or any of the Company's Subsidiaries
other than compensation for full-time employment as a regular employee
at rates in accordance with the Company's (or such Subsidiary's) past
practices, (6) shall receive the benefit (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries or (7) shall
commence a tender or exchange offer for securities of the Company; or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any combination
thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries, or any
repurchase by the Company or any of its Subsidiaries of shares of the
Common Stock or Special Common Stock of the Company, or any other
class or series of securities issued by the Company, or any other
transaction or series of transactions involving the Company which
reclassification, recapitalization, merger or consolidation,
repurchase or other transaction or series of transactions is not
effected with the approval of a majority of the Directors then in
office, or a repurchase or another transaction or series of
transactions is effected at a time when a majority of the Board
consists of persons who are the Acquiring Person or its Affiliates,
nominees or designees thereof (whether or not with or into or
otherwise involving an Acquiring Person or any Affiliate of an
Acquiring Person), which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities or securities exercisable for
or convertible into any class of equity securities of the Company or
any of its Subsidiaries which is directly or indirectly owned by any
Acquiring Person or any Affiliate of an Acquiring Person,
then, in each such case, upon the Close of Business 10 Business Days after
the occurrence of such event, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, in
lieu of a number of one one-hundredths of a share of Preference Stock, such
number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying an amount equal to the then current Purchase
Price by an amount equal to the number of one one-hundredths of a share of
Preference Stock for which a Right was or would have been exercisable
immediately prior to the first occurrence of any such event whether or not
such Right was then exercisable, and (y) dividing that product (which
product, following such first occurrence, shall be the "Purchase Price" for
each Right for all purposes of this Agreement) by 50% of the Current Market
Price per share of the Common Stock of the Company (as defined in Section
11(d) hereof) determined as of the date of such first occurrence.
(iii) In lieu of issuing shares of Common Stock in accordance with
Section 11(a)(ii) hereof, the Company shall, (i) in the event that the
number of shares of Common Stock which are authorized by the Company's
articles of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii) hereof, or (ii) if a majority of the Board determines that it
would be appropriate and not contrary to the interests of the holders of
Rights (other than any Acquiring Person or Disqualified Transferee or any
Affiliate of the Acquiring Person or Disqualified Transferee) (A) determine
an amount, if any (the "Excess Amount") equal to the excess of (1) the
value (the "Current Value") of the shares of Common Stock issuable upon the
exercise of a Right in accordance with Section 11(a)(ii) hereof, over (2)
the Purchase Price, and (B) with respect to each Right, (subject to Section
7(e) hereof) make adequate provision to substitute for such shares of
Common Stock, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares or units
of preferred stock which the Board of Directors of the Company has deemed,
in good faith, to have the same value as a share of Common Stock (such
shares of preferred stock hereinafter referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Directors of the Company, in good faith, based upon the advice of a
nationally recognized investment banking firm selected by the Board;
provided, however, subject to the provisions of Section 9(e), that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within 30 days following first occurrence of a Common
Stock Event described in Section 11(a)(ii) hereof, then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, securities, and/or
assets which in the aggregate are equal to the Excess Amount. If the
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set forth
above may be extended to the extent necessary, but not more than 90 days
following the later of (x) 10 Business Days after the first occurrence of
such a Common Stock Event and (y) the date on which the Company's right of
redemption pursuant to Section 23 hereof expires, in order that the Company
may seek shareholder approval for the authorization of such additional
shares (such 30-day period, as it may be extended to 90 days, is referred
to herein as the "Substitution Period"). To the extent that the Company
determines that some action is to be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights which shall not have become null and void and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended. The
Company shall thereafter issue a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the Current Market Price
per share of the Common Stock (as determined pursuant to Section 11(d)
hereof) on the later of (x) 10 Business Days after the date of the first
occurrence of such a Common Stock Event and (y) the date on which the
Company's right of redemption pursuant to Section 23 hereof expires, and
the value of any Common Stock Equivalent shall be deemed to have the
Current Market Price per share as the Common Stock on such date.
(b) In the event the Company shall, after the Dividend Record Date,
fix a record date for the issuance of any options, warrants, or other
rights to all holders of Preference Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for
or purchase (i) Preference Stock, (ii) shares having the same rights,
privileges and preferences as the shares of any number of one
one-hundredths of a share of Preference Stock ("Equivalent Preference
Stock") or (iii) securities convertible into Preference Stock (or
Equivalent Preference Stock), at a price per share of Preference Stock or
Equivalent Preference Stock (or having a conversion price per share of
Preference Stock or Equivalent Preference Stock, if a security is
convertible into Preference Stock or Equivalent Preference Stock) less than
the Current Market Price per share of Preference Stock (determined in
accordance with Section 11(d) hereof) determined as of such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number
of shares of Preference Stock outstanding on such record date plus the
number of shares of Preference Stock and/or Equivalent Preference Stock
which the aggregate minimum offering price of the total number of shares of
one one-hundredths of a share of Preference Stock and/or Equivalent
Preference Stock so to be offered (and/or the aggregate minimum conversion
price of such convertible securities so to be offered) would purchase at
such Current Market Price and the denominator of which shall be the number
of shares of Preference Stock outstanding on such record date plus the
maximum number of additional shares of Preference Stock and/or Equivalent
Preference Stock to be offered for subscription or purchase (or the maximum
number of shares into which such convertible securities so to be offered
are convertible). In case such subscription price may be paid by delivery
of consideration part or all of which shall be in a form other than cash,
for purposes of this Section 11(b) the value of such consideration shall be
the fair market value thereof as determined in good faith by the Board of
Directors of the Company (which determination (i) shall be conclusive on
all concerned if approved by a majority of the Directors of the Company and
(ii) shall be described in an Officers' Certificate filed with the Rights
Agent). Shares of Preference Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed
(subject, however, to such other adjustments as are provided herein).
(c) In the event that the Company shall, after the Dividend Record
Date fix a record date for the making of a distribution to all holders of
Preference Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving or continuing
corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividends paid out of the earnings or retained earnings of
the Company), other property (other than a dividend payable in a number of
one one-hundredths of a share of Preference Stock, but including any
dividend payable in stock other than Preference Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per one one-hundredth of a share of Preference Stock (as
defined in Section 11(d) hereof) determined as of such record date, less
the sum of that portion of cash plus the fair market value, as determined
in good faith by the Board of Directors of the Company (which determination
shall be described in an Officers' Certificate filed with the Rights Agent)
of that portion of such evidences of indebtedness, such other property
and/or such subscription rights or warrants applicable to one share of
Common Stock and of which the denominator shall be such Current Market
Price per share of the Preference Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event 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 (subject, however, to such other adjustments as are provided
herein).
(d) For the purpose of any computation hereunder, the "Current Market
Price" per share (or unit) of any security on any date shall be deemed to
be the average of the daily Closing Price of such security for the 20
consecutive Trading Days immediately prior to such date; provided, however,
that in the event that the Current Market Price per share of such security
is determined during a period following the announcement by the issuer of
such security of (i) a dividend or distribution on such security payable in
shares (or units) of such security or securities convertible into shares
(or units) of such security or (ii) any subdivision, combination or
reclassification of such security, and prior to the expiration of 20
Trading Days after (A) the ex-dividend date for such dividend or
distribution, or (B) the record date for such subdivision, combination or
reclassification, as the case may be, then, and in each such case, the
"Current Market Price" shall be the Closing Price of such security on the
last day of such 20 Trading Day period. The term "Trading Day" shall mean
a day on which the principal national securities exchange on which such
security is listed or admitted to trading is open for the transaction of
business or, if such security is not listed or admitted to trading on any
national securities exchange, a day which is a Business Day. For purposes
of this Agreement, the "Closing Price" of any security on any day shall be
the last sale price, regular way, with respect to shares (or units) of such
security, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, with respect to such
security, 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 such security is not
listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
such security is listed or admitted to trading; or, if such security is not
so listed or admitted to trading, the last quoted sale price with respect
to shares (or units) of such security, or, if not so quoted, as the average
of the high bid and low asked prices in the over-the-counter market with
respect to shares (or units) of such security, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such
other similar system then in use; or, if on any such date such security is
not quoted by any such organization, the average of the closing bid and
asked prices with respect to shares (or units) of such security, as
furnished by a professional market maker making a market in such security
selected by the Directors of the Company in good faith; or, if no such
market maker is available, the fair market value of shares (or units) of
such security as of such day as determined in good faith by the Directors
of the Company (which determination shall be described in an Officers'
Certificate filed with the Rights Agent); provided, however, that the
"Closing Price" of one one-hundredth of a share of Preference Stock as of
any Trading Day shall be equal to the Closing Price of a whole share of
Preference Stock on such Trading Day divided by 100; provided, further,
that if the Closing Price of such a share of Preference Stock as of any
Trading Day cannot be reasonably determined by the foregoing provisions,
the "Closing Price" of one one-hundredth of a share of Preference Stock on
such Trading Day shall be the Closing Price of a share of Common Stock on
such Trading Day.
(e) No adjustment in the Purchase Price shall be required unless
adjustment would require an increase or decrease of at least 1% 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 (x)
ten-thousandth of a share of Common Stock or securities other than
Preference Stock or Equivalent Preference Stock or (y) one-millionth of a
share of Preference Stock or Equivalent Preference Stock. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 hereof shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates the adjustment or
(ii) the date of the expiration of the right to exercise the Rights.
Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in
addition to those required by this Section 11, as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights to purchase shares of
beneficial interest or other stock or securities, or distribution of
securities convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made
in respect of a Common Stock Event, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of
the Company other than shares of Preference Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to such other shares contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j) (k), (m) and (p) hereof, and the provisions of Sections
7, 9, 10, 11(d), 13 and 14 hereof with respect to the shares of Preference
Stock shall apply on like terms to any such other shares.
(g) All Right Certificates originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a share of Preference Stock purchasable from time
to time hereunder upon exercise of the Rights represented thereby, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made pursuant to Sections 11(b) and 11(c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of Preference
Stock (calculated to the nearest one-millionth of a share) obtained by (i)
multiplying (x) the number of one one-hundredths of a share of Preference
Stock covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) Assuming that no other adjustment pursuant to Section 11 has been
made, 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 one one-hundredths of a share of Preference
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preference
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price by the Purchase
Price in effect immediately after such 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 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the 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 of Preference Stock issuable upon exercise of such
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a share and
such number of one one-hundredth of a share of Preference Stock which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number of
one one-hundredths of a share of Preference Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable such number of one one-
hundredths of a share of Preference Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of Preference Stock
and other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-hundredths of a share of
Preference Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it, by means of a resolution of the Board acting in good
faith, shall determine to be advisable in order that any consolidation or
subdivision of the Common Stock, issuance wholly for cash of any Common
Stock at less than the Current Market Price thereof, issuance wholly for
cash of Common Stock (or other securities which by their terms are
convertible into or exchangeable for Common Stock), dividends payable in
shares of Common Stock or other capital stock or shares of beneficial
interest, or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made or declared by the Company
to the holders of its Common Stock, shall not be taxable to such holders.
(n) The Company covenants and agrees that it shall not at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 25% of (A) the
assets (taken at net asset value as stated on the books of the Company and
determined in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company (on an
individual basis) or the Company and its Subsidiaries (on a consolidated
basis) (determined in accordance with generally accepted accounting
principles consistently applied) to any other Person or Persons, if (x) at
the time of or immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities outstanding or
agreement or arrangements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, or
(y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of such other Person shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Dividend Declaration
Date and prior to the Distribution Date (i) declare or pay a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of shares or (iv) issue any shares of
its capital stock in a reclassification of the outstanding Common Stock, or
Common Stock issued in connection with such dividend, subdivision or
combination, then, in any such case, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share
of Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator which shall be
the total number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock. The adjustments provided for in this
Section 11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
SECTION 12.CERTIFICATE OF ADJUSTMENTS.
Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare an Officers' Certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preference Stock and the Common Stock a copy of such
Officers' Certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such Officers' Certificate
and on any adjustment therein contained, and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received
such an Officers' Certificate.
SECTION 13.CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (b)
any Person shall consolidate, merge with and into the Company (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the Common Stock and Special Common Stock of the
Company shall be changed or otherwise transformed into stock or other
securities of any other Person or the Company or cash or any other
property, or (c) 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 25% of (A) the
assets (taken at net asset value as stated on the books of the Company and
determined in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company (on an
individual basis) or the Company and its Subsidiaries (on a consolidated
basis) to any other Person or Persons, then, from and after such event,
proper provision shall be made so that (i) each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of shares of
Common Stock of such other Person (or, in the case of a transaction or
series of transactions described in clause (c) above, the Person receiving
the greatest amount of assets or earning power of the Company, or if the
Common Stock of such other Person is not and has not been continuously
registered under Section 12 of the Exchange Act for the preceding 12-month
period and such Person is a direct or indirect Subsidiary of another
Person, that other Person, or if such other Person is a direct or indirect
Subsidiary of more than one other Person, the Common Stock of two or more
of which are and have been so registered, such other Person whose issued
Common Stock has the greatest aggregate value), free and clear of any
liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (x) multiplying the Purchase Price
in effect immediately prior to the first occurrence of any Common Stock
Event by the number of one one-hundredths of a share of Preference Stock
for which a Right is exercisable immediately prior to such first occurrence
and dividing that product (which product, following such adjustment, shall
be the "Purchase Price" for each Right and for all purposes of this
Agreement) by (y) 50% of the Current Market Price per share (as defined in
Section 11(d) hereof) of the Common Stock of such other Person determined
as of the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Stock 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; (iii) the term "Company" shall thereafter be deemed for all
purposes of this Agreement to refer to such issuer, it being specifically
intended that the provisions of Section 11 hereof (other than Section
11(a)(ii) hereof) shall apply only to such issuer following the first
occurrence of a Common Stock Event under this Section 13; (iv) such issuer
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) 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; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Common Stock Event
described in clauses (a), (b) or (c) of this Section 13. The Company shall
not consummate any such consolidation, merger, sale or transfer unless (i)
such issuer shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance as will
permit the exercise in full of the Rights in accordance with this Section
13 and (ii) prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing and
further providing that as soon as practicable after the date of any Common
Stock Event described above in this Section 13 such issuer will (A) prepare
and file a registration statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (I) become effective as soon as practicable after such filing
and (II) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date and (B) will deliver to
holders of the Rights historical financial statements of such issuer and
each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act. Furthermore, in case
the Person which is to be party to a transaction referred to in this
Section 13 has any provision in any of its authorized securities or in its
charter or by-laws or other agreement or instrument governing its affairs,
which provision would have the effect of causing such Person to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Person at
less than the then current market price per share thereof (as defined in
Section 11(d) hereof), or to issue securities exercisable for, or
convertible into, Common Stock of such Person at less than such then
Current Market Price; then, in such event, the Company hereby agrees with
each holder of the Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Person shall have executed and
delivered to the Rights Agent a supplemental agreement providing that such
provision in question shall have been canceled, waived, or amended so that
it will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales
or other transfers. In the event that a Common Stock Event described in
this Section 13 shall occur at any time after the occurrence of a Common
Stock Event described in Section 11(a)(ii) hereof, the Rights which have
not therefore been exercised shall thereafter become exercisable except as
provided in Section 7(e) hereof, in the manner described in this Section
13.
SECTION 14.FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu
of issuing such fractional Rights, at the election of the Company, there
shall be paid to the registered holders of the Rights with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right
shall be the Closing Price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable.
(b) The Company shall not be required to issue fractions of shares of
its capital stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares (other than, in each case with respect to
Preference Stock or Equivalent Preference Stock, fractions which are
integral multiples of one one-hundredth of a share of Preference Stock or
Equivalent Preference Stock, as the case may be). Fractions of shares of
Preference Stock or Equivalent Preference Stock, as the case may be, in
integral multiples of one one-hundredth of a share of Preference Stock or
Equivalent Preference Stock may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preference Stock or the Equivalent Preference
Stock represented by such depositary receipts. In lieu of fractional
shares, at the election of the Company there shall be paid to the
registered holders of Rights at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of a share of such capital stock. For purposes of this
Section 14(b), the current market value of a share of such capital stock
shall be the Closing Price of such capital stock for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or (except as provided in
Section 14(b) hereof) any fractional share upon exercise of a Rights.
SECTION 15.RIGHTS OF ACTION.
Excepting the rights of action given the Rights Agent under Section 18
hereof, and except as set forth in Section 20(e) hereof, all rights of
action in respect of this Agreement are vested in the respective registered
holders of the Rights; and any registered holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Right, may, in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Rights in the manner provided in such Right Certificate and in this
Agreement, and the Company hereby agrees to reimburse such registered
holder for all expenses (including reasonable attorneys' fees) incurred by
such registered holder in connection therewith. 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 the obligations hereunder, and
shall be entitled to injunctive relief against actual or threatened
violations of the obligations hereunder 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) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the Principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a 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 prior to the Distribution Date, the
associated Common Stock certificates, made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation; provided, however,
the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned.
SECTION 17.RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right shall be entitled to vote, receive
dividends or otherwise be deemed for any purpose the holder of the number
of one one-hundredths of a share of Preference Stock or the shares or
similar units of any other securities of the Company which may 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 in the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any action by the Company, or to
receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25), or to receive dividends or preemptive rights,
or otherwise, until the time specified in Section 10 hereof.
SECTION 18.CONCERNING THE RIGHTS AGENT.
The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses (including reasonable attorneys' fees) of
defending against any claim of liability for any of the foregoing.
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 any number of one one-hundredths of a share
of Preference Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 19.MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the 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 shall be a party, or any
corporation succeeding to the shareholder services business of the Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement and 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.
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 such 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 only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent. The Rights
Agent shall perform its duties and obligations hereunder upon the following
terms and conditions:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel to the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person) 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 (an "Officers'
Certificate") signed by the Chairman of the Board, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such Officers' 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 Officer's
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 on such Rights Certificate)
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 Sections 11 or 13 hereof or be responsible for the
manner, method or amount of any such adjustment or procedures or the
ascertaining of the existence of facts that would require any such
adjustment or procedure (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment
or procedures); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preference Stock, Common Stock, or other securities to be issued pursuant
to this Agreement or any Right Certificate or as to whether any number of
one one-hundredths of a share of Preference Stock, or any shares or similar
units of other securities, will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, that
reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certification appearing on the
reverse side thereof following the form of election to purchase has either
not been completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first consulting with the
Company.
(l) The provisions of this Section 20 are solely for the benefit of
the Rights Agent or the Company and any failure or omission under this
Section 20 shall not affect the rights of the Company under this Agreement
and the Rights Agent or the Company shall have no liability to any holder
of Rights or other Person on account of such failure or omission.
SECTION 21.CHANGE OF RIGHTS.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the Preference
Stock and the Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent, to each transfer agent of the
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 30 days after giving notice of
such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a 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, the State of Rhode Island, The Commonwealth of Massachusetts or the
State of New York (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 Rhode Island, The Commonwealth of Massachusetts or the State
of New York), in good standing, having a Principal Office in the State of
Rhode Island, The Commonwealth of Massachusetts or the State of New York,
which is authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital
and surplus of at least $50,000,000. 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; and, except as the context herein
otherwise requires, such successor Rights Agent shall be deemed to be the
"Rights Agent" for all purposes of this Agreement. Not later than the
effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Preference Stock and the Common Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22.ISSUANCE OF NEW 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 the Board
to reflect any adjustment or change in the Purchase Price per share and the
number or kind or class of shares of stock or other securities or property
purchasable under the Rights Certificate made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale by the Company of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Right Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights evidenced by a
Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to
whom such Rights would be issued, and (ii) no such Right Certificate shall
be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
SECTION 23.REDEMPTION AND TERMINATION.
The Board may, at its option, upon the affirmative vote or written
consent of not less than two-thirds of such Board, at any time prior to the
earlier of (i) the first occurrence of a Common Stock Event or (ii) Close
of Business on the Expiration Date, 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,
combination of shares or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). Immediately upon the taking of such action ordering
the redemption of all of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights so redeemed will terminate and the
only right thereafter of the holders of such Rights so redeemed shall be to
receive the Redemption Price (without the payment of any interest thereon).
Within 10 days after such action ordering the redemption of all of 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 or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
SECTION 24.EXCHANGE.
(a) The Board, by majority vote, 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 for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such plan), together with
all Affiliates of such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock and Special Common Stock (taken together as a single
class, treating each share of Special Common Stock outstanding as one share
of Common Stock) then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly given 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 void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preference Stock (or shares of Equivalent
Preference Stock) for shares of Common Stock exchangeable for Rights, at
the initial rate of one one-hundredth of a share of Preference Stock (or
share of Equivalent Preference Stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of
shares of Preference Stock pursuant to the terms thereof, so that the
fraction of a share of Preference Stock delivered in lieu of each share of
Common Stock shall have the same voting rights as one share of Common
Stock.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preference Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Stock or Preference Stock for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to each registered holder of a Right Certificate with
regard to which a fractional share of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph
(e), the current market value of a whole share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
SECTION 25.NOTICE OF PROPOSED ACTIONS.
In case the Company shall after the Distribute Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Preference
Stock or to make any other distribution to the holders of its Preference
Stock (other than a regular quarterly cash dividend out of earnings or the
retained earnings of the Company), or (b) to offer to the holders of its
Preference Stock rights or warrants to subscribe for or to purchase any
additional shares of Preference Stock, Common Stock or shares of stock of
any class or any other securities, rights or options, or (c) to effect any
reclassification of the Preference Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preference Stock),
or (d) 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 transaction or a series of
related transactions, of more than 25% of the assets (determined on the
basis of the net asset value thereof as reflected on the books of the
Company and in accordance with generally accepted accounting principles
consistently applied) or earning power of the Company (on an individual
basis) or of the Company and its Subsidiaries (on a consolidated basis) to
any other Person or Persons or (e) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall
give to the Rights Agent and each holder of a Right, in accordance with
Section 26, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of Preference
Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (a) or (b) above at least
twenty days prior to the record date for determining holders of the
Preference Stock 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
Preference Stock whichever shall be the earlier. The failure to give
notice required by this Section 25 or any defect therein shall not affect
the legality or validity of the action taken by the Company or the vote
upon any such action.
In case any Common Stock Event described in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such Common Stock Event, which shall specify such event and
the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given.
SECTION 26.NOTICES.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to 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:
NORTEK, INC.
50 Kennedy Plaza
Providence, Rhode Island 02903
Attention: Treasurer
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or
by the holder of any Right 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:
STATE STREET BANK AND TRUST COMPANY
P.O. Box 366
Boston, Massachusetts 02101
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27.SUPPLEMENTS AND AMENDMENT.
Prior to the Distribution Date, the Board, upon a vote of the majority
of the Board may from time to time supplement or amend this Agreement
without the approval of any holders of the Rights. From and after the
Distribution Date, the Board, upon a vote of the majority of the Board, may
from time to time amend this Agreement without the approval of any holders
of the Rights 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 change any time
period governing redemption of the Rights or any other time period (iv) to
reduce the Purchase Price pursuant to the last sentence of Section 11(e)
hereof, or (v) to make any other provisions in regard to matters or
questions arising hereunder which the Board, upon a vote of the majority of
the Board may deem necessary or desirable and which shall not adversely
affect the interests of the holders of the Rights (other than any Acquiring
Person, Disqualified Transferee or any Affiliate of an Acquiring Person or
Disqualified Transferee). Any amendment made pursuant to this Section 27
after a Stock Acquisition Date shall require the approval of a majority of
the Board. The Rights Agent shall join with the Company in the execution
and delivery of any such supplement or amendment, unless such supplement or
amendment affects any of the rights, duties, or obligations of the Rights
Agent hereunder, in which case the Rights Agent may, but shall not be
required to, join in such execution and delivery.
SECTION 28.SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 29.DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS; ETC.
The Board shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted
to the Board, or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below all omissions with respect to the foregoing) which are done or made
by the Board of Directors in good faith and with the concurrence of a
majority of the Board then in office shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject any Director 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 associated
shares of Common Stock) any legal or equitable right, remedy or claim under
this Agreement or the Rights; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights (and, prior to the Distribution Date, the associated
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 said State applicable to contracts to be made and performed
entirely within said 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.DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
SECTION 34.SEVERABILITY.
The invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of any other term or
provision hereof. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination
by the Board.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of April 1, 1996.
NORTEK, INC.
By /s/ Richard L. Bready
---------------------
Chairman
Attest:
By /s/ Kevin W. Donnelly
---------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
/s/ Vincent J. Quealy, Jr.
---------------------------------------------
Title: Vice President
EXHIBIT A
---------
EXCERPT FROM THE RESTATED
CERTIFICATE OF INCORPORATION OF THE COMPANY
ARTICLE FIFTH
(D) Series A Participating Preference Stock.
1. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of Preference Stock ranking prior and superior to the
shares of Series A Participating Preference Stock (the "Series A Stock")
with respect to dividends, the holders of shares of Series A Stock 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 tenth day of January, April, July and October in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date."), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (i)
$0.25 or (ii) subject to the provisions for adjustment set forth in
paragraph 7 hereof, 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 Special Common Stock or a subdivision
of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Series A Stock.
(b) The Corporation shall declare a dividend or distribution on the
Series A Stock as provided in paragraph (1)(a) above immediately after it
declares a dividend or distribution on the Common Stock or Special Common
Stock (other than a dividend payable in shares of or subdivision with
respect to Common Stock or Special Common Stock); provided, however, that,
in the event no dividend or distribution shall have been declared on the
Common Stock or Special Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $0.25 per share on the Series A 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 Series A Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which event 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
Series A Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders
of shares of Series A Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60
days prior to the date fixed for the payment thereof.
2. Voting Rights. The holder of shares of Series A Stock shall have the
following voting rights:
(a) Subject to the provision for adjustment set forth in paragraph 7
hereof, each share of Series A 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 in this Certificate of Incorporation
or by law, the holders of shares of Series A Stock, the holders of shares
of Common Stock and the holders of Special Common Stock shall vote together
as one class on all matters submitted to a vote of stockholders of the
Corporation.
(c)(i) If at the time of any annual meeting of stockholders for the
election of directors a default in preferred dividends (as defined in
subparagraph (c)(ii) below) shall exist, the holders of shares of
Preference Stock voting separately as a class without regard to series
(with each share of Preference Stock being entitled to that number of votes
to which it is entitled on matters submitted to stockholders generally, or,
if it is not entitled to vote with respect to such matters, to one vote),
shall have the right to elect two members of the Board of Directors of the
Corporation. The holders of Common Stock and the holders of Special Common
Stock shall not be entitled to vote in the election of the two directors so
to be elected by the holders of shares of Preference Stock. Any director
elected by the holders of shares of Preference Stock, voting as a class as
aforesaid, shall continue to serve as such director for the full term for
which he shall have been elected notwithstanding that prior to the end of
such term a default in preferred dividends shall cease to exist. If, prior
to the end of the term of any director elected by the holders of the
Preference Stock, voting as a class as aforesaid, a vacancy in the office
of such director shall occur by reason of death, resignation, removal or
disability, or for any other cause, such vacancy shall be filled for the
unexpired term in the manner provided in the By-laws of the Corporation,
provided that, if such vacancy shall be filled by election by the
stockholders at a meeting thereof, the right to fill such vacancy shall be
vested in the holders of Preference Stock, voting as a class as aforesaid,
unless, in any such case, no default in preferred dividends shall exist at
the time of such election.
(ii) For the purposes of subparagraph (c)(i), a default in preferred
dividends shall be deemed to have occurred whenever the amount of dividends
in arrears upon any series of Preference Stock shall be equivalent to six
full quarterly dividends or more and, having so occurred, such default in
preferred dividends shall be deemed to exist thereafter until all accrued
dividends on all shares of Preference Stock then outstanding shall have
been paid to the end of the last preceding quarterly dividend period.
Nothing herein contained shall be deemed to prevent an amendment of the By-
laws of the Corporation, in the manner therein provided, which shall
increase the number of directors so as to provide as additional places on
the Board of Directors either or both the directorships to be filled by the
two so to be elected by the holders of the Preference Stock or to prevent
any other change in the number of directors of the Corporation.
(d) Except as set forth in this Article FIFTH, holders of Series A
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock or the holders of Special Common Stock as set forth in this
Article FIFTH) for taking any corporate action.
3. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Stock as provided in paragraph 1 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Stock, except dividends paid ratably on the Series A 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 on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series A Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Stock, or any share of stock ranking on a parity with
the Series A 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 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 subparagraph (a),
purchase or otherwise acquire such shares at such time and in such manner.
4. Reacquired Shares.
Any shares of Series A Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preference Stock and
may be reissued as part of a new series of Preference Stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
5. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise) dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Stock unless, prior
thereto, the holders of shares of Series A Stock shall have received $15.00
per share plus an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Stock unless, prior
thereto, the holders of shares of Common Stock and the holders of shares of
Special Common Stock (which terms shall include for the purposes only of
this paragraph 5, any series of the Corporation's Preference Stock ranking
on a parity with the Common Stock or Special Common Stock upon liquidation,
dissolution or winding up) shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as
set forth in paragraph 7 to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock or Special
Common Stock; such number in clause (ii), the "Adjustment Number"). In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall
be distributed ratably to the holders of Common Stock and Special Common
Stock. Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Stock, Common Stock and Special Common
Stock, respectively, holders of Series A Stock, holders of shares of Common
Stock and holders of shares of Special Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to one (1) with respect to such
Series A Stock, Common Stock and Special Common Stock, on a per share
basis, respectively.
(b) In the event however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preference Stock, if
any, which rank on a parity with the Series A Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
6. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock or
Special Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of Series A Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment set
forth in paragraph 7 hereof) 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 or Special
Common Stock is changed or exchanged.
7. Certain Adjustments.
In the event the Corporation shall at any time declare or pay any
dividend on Common Stock or Special Common Stock payable in shares of
Common Stock or Special Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock or
Special Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock or Special Common Stock) into a greater
or lesser number of shares of Common Stock or Special Common Stock, then,
in each such case, the amounts set forth in paragraphs 1(a)(ii), 2(a),
5(a)(ii) and 6 hereof with respect to the multiple of (i) cash and non-cash
dividends, (ii) votes, (iii) the Series A Liquidation Preference and (iv)
an aggregate amount of stock, securities, cash and/or other property
referred to in paragraph 6, shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common Stock
and Special Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock and Special
Common Stock that were outstanding immediately prior to such event.
8. Ranking.
The Series A Stock shall rank pari parsu with (or if determined by the
Board of Directors in any vote establishing any other series of Preference
Stock, either senior and preferred to or junior and subordinate to as the
case may be) each other series of Preference Stock of the Corporation with
respect to dividends and/or preference upon liquidation, dissolution or
winding up.
9. No Redemption.
The shares of Series A Stock may be purchased by the Corporation at
such times and on such terms as may be agreed to between the Corporation
and the selling stockholder, subject to any limitations which may be
imposed by law or this Certificate of Incorporation.
10. Amendment.
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Stock, voting together as a single
class.
11. Fractional Shares.
Series A Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Stock.
EXHIBIT 2
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER MARCH 31, 2006 OR EARLIER IF ORDER OF REDEMPTION
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND
ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL
BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT
HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES
AND ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only if
applicable.
Rights Certificate
NORTEK, INC.
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions,
and conditions of the Rights Agreement dated as of March 31, 1986, as
amended and restated as of March 18, 1991, as amended as of October 6,
1993, as amended as of September 27, 1995 and as further amended and
restated as of April 1, 1996 (the "Rights Agreement") between Nortek,
Inc. (the "Company"), and State Street Bank and Trust Company (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. (Providence, Rhode Island time) on March 31,
2006 (the "Expiration Date") at the office of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a share of the Series A Participating Preference
Stock, with a par value of $1.00 per share ("Preference Stock"), of
the Company per each Right represented hereby, at a purchase price of
$72.00 per share (the "Purchase Price") upon presentation and
surrender of this Rights Certificate with the Form of Election to
Purchase set forth on the reverse side hereof and the certificate
contained therein duly executed, accompanied by a signature guarantee
and such other documentation as the Rights Agent may reasonably
request. The number of Rights evidenced by this Rights Certificate
(and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of April 1, 1996, based on
the shares of Common Stock of the Company as constituted at such date.
As more fully set forth in the Rights Agreement, upon the occurrence
of a Common Stock Event (as such term is defined in the Rights Agreement),
if the Rights evidenced by this Rights Certificate are beneficially owned
by (i) an Acquiring Person or an Affiliate of an Acquiring Person (as each
such term is defined in the Rights Agreement) or (ii) a Disqualified
Transferee (as defined in the Rights Agreement), such Rights shall
automatically become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Common Stock Event.
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and the number
of whole or fractional shares of Preference Stock which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain
events.
In the circumstances described in Section 13 of the Rights Agreement,
the securities issuable upon the exercise of the Rights evidenced hereby
shall be the common stock or similar equity securities or equity interests
of an entity other than the Company.
This Rights Certificate is subject to all of the terms, provisions,
and conditions of the Rights Agreement, which terms, provisions, and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties, and
immunities hereunder of the Rights Agent, the Company, and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the office of the Rights Agent designated for such
purpose and may be obtained by the holder of any Rights upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent, accompanied by a
signature guarantee and such other documentation as the Rights Agent
designated for such purpose may reasonably request, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number
of whole or fractional shares of Common Stock as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company by a majority
vote of the Board (as defined in the Rights Agreement) then in office at
any time prior to the Expiration Date, at a redemption price of $.01 per
Right (which amount is subject to adjustment as provided in the Rights
Agreement).
The Company is not obligated to issue whole or fractional shares of
Preference Stock (or other securities) upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment may be made at
the election of the Company, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preference Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
action by the Company, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature and seal of the proper officers of the
Company. Dated as of April 1, 1996.
NORTEK, INC.
By ______________________________
Title:
ATTEST:
____________________
Title:
Countersigned:
____________________
By____________________
Authorized Signatory
Date of Countersignature:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto
______________________________________________________________________
___________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________ whose
social security or tax identification number, is: ______________ the Rights
evidenced by this Rights Certificate, together with all right, title and
interest herein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Rights
Certificate on the books of the within named Company, with full power of
substitution.
Dated: _________________________, ____.
_________________________
Signature
Signature Guaranteed:*
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate of an Acquiring Person (as each such term is defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate of an Acquiring Person.
Dated:____________________ ______________________________
Signature
Signature Guaranteed:*
____________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate)
To Nortek, Inc.:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the number of one
one-hundredth of a share of Preference Stock (or other securities) issuable
upon the exercise of such Rights and requests that certificates for such
shares be issued in the name of:
Please insert social security or other identifying
number____________________________________________________________________
__________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Please print name and address)
Dated: _______________________, ____
______________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Rights Certificate)
Signature Guaranteed:**
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate of any such Acquiring Person (as each such term is
defined in the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
after the occurrence of a Common Stock Event (as such term is defined in
the Rights Agreement) from any Person who is, was, or became an Acquiring
Person or an Affiliate of an Acquiring Person.
Dated: _________________, ____ _________________________
Signature
Signature Guaranteed:***
________________________
* Signature must be guaranteed be a member firm of The New York Stock
Exchange, Inc. or a commercial bank or trust company having an office or
correspondent in New York City.
** Signature must be guaranteed by a member firm of The New York Stock
Exchange, Inc. or a commercial bank or trust company having an office of
correspondent in New York City.
*** Signature must be guaranteed by a member firm of The New York Stock
Exchange, Inc. or a commercial bank or trust company having an office of
correspondent in New York City.
