<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-A/A
AMENDMENT NO. 3
Amending Form 8-A Filed December 19, 1989, as amended by
Form 8 Filed November 7, 1990
and Form 8-A/A Filed April 6, 1994
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
OHIO CASUALTY CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0783294
- --------------------------------------- -------------------
(State of incorporation or organization (I.R.S. Employer
Identification No.)
136 North Third Street, Hamilton, Ohio 45025
- --------------------------------------- ------------------
(Address of principal executive offices) (ZIP Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered each class is registered
- ------------------------------ ------------------------------
None Not Applicable
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
----------------------------
(Title of Class)
Page 1 of 118 Pages
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This Form 8-A/A amends and supplements the Form 8-A filed by Ohio
Casualty Corporation (the "Company") with the Securities and Exchange
Commission ("SEC") on December 19, 1989, as previously amended by the Form 8
filed with the SEC on November 7, 1990, and the Form 8-A/A filed with the SEC
on April 6, 1994, with respect to Common Share Purchase Rights (the "Form 8-
A").
Item 1. Description of Securities to be Registered.
-------------------------------------------
Item 1 of the Form 8-A is amended by substituting the following:
On December 15, 1989, the Board of Directors of Ohio Casualty
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding common share, par value twelve and one-half cents ($0.125)
per share (the "Common Stock"), of the Company to shareholders of record at
the close of business on December 29, 1989. On February 17, 1994, the Board
of Directors of the Company authorized an adjustment of the Rights associated
with each share of Common Stock in connection with a 2-for-1 share split with
the result that each share of Common Stock outstanding following such share
split is accompanied by one-half of one Right. The exercise price of one
whole Right was reduced in connection with such share split from $150 per
share to $75 per share. The Rights were issued upon the terms and subject to
the conditions set forth in a Rights Agreement, dated as of December 15, 1989,
as amended on February 28, 1990, October 17, 1990, April 1, 1994, and June 8,
1995, between the Company and First Chicago Trust Company of New York (as
successor rights agent to Mellon Bank, N.A.) (the "Prior Rights Agreement").
First Chicago Trust Company of New York is hereafter referred to herein as the
"Rights Agent."
On February 19, 1998, the Board of Directors of the Company adopted
amendments to the Prior Rights Agreement (the "Amendments"), which are
incorporated in an Amended and Restated Rights Agreement (the "Rights
Agreement"), dated as of February 19, 1998, between the Company and First
Chicago Trust Company of New York, as Rights Agent, which supersedes the Prior
Rights Agreement. A copy of the Rights Agreement is attached as an exhibit
hereto and is incorporated herein by reference.
Page 2 of 118 Pages
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As of the date hereof, there is associated with each outstanding
share of Common Stock one-half of one Right. Except as set forth in the
Rights Agreement, each whole Right, when exercisable, entitles the registered
holder to purchase from the Company one share of Common Stock at a price of
$250.00 per share, subject to adjustment.
The following is a summary of the terms of the Rights as set forth
in the Rights Agreement:
The Rights (or fractional Rights) are attached to all Common Stock
certificates representing outstanding shares, and no separate Right
certificates have been distributed. Until the earlier to occur of (i) the
close of business on the tenth business day after the first date of a public
announcement (the "Stock Acquisition Date") that, without the prior approval
of the Company's Board of Directors, a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock of the Company or (ii) the close of business on the tenth
business day (or such later date and time as may be determined by action of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the commencement of (or a public announcement of an intention to
make) a tender offer or exchange offer which would result in any person or
group of related persons becoming an Acquiring Person (the earlier of (i) and
(ii) above being called the "Distribution Date"), the Rights will be evidenced
by the Common Stock certificates and not by separate Right certificates.
The following persons are excluded from the definition of Acquiring
Person: the Company or any subsidiary of the Company, any employee benefit
plan of the Company or any subsidiary or any entity holding shares of Common
Stock organized, appointed or established by the Company or a subsidiary for
or pursuant to any such plan, and Joseph L. Marcum and any Affiliate or
Associate of Joseph L. Marcum. No person shall become an Acquiring Person as
the result of an acquisition of Common Stock by the Company or as a result of
having received Common Stock through a gift, bequest, inheritance or by
operation of law upon the death of an individual; provided, however, that if a
Person
Page 3 of 118 Pages
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becomes the beneficial owner of 20% or more of the shares of Common Stock of
the Company by reason of shares purchased by the Company or any such gift,
bequest or inheritance and, after such time, becomes the beneficial owner of
additional shares while such Person is a beneficial owner of 20% or more of
the shares of Common Stock then outstanding, then such person will be deemed
to be an Acquiring Person (unless such acquisition has been approved by the
Board of Directors). The Rights Agreement provides that, in the event a
person shall become an Acquiring Person inadvertently, and such person divests
as promptly as practicable a sufficient number of shares so that such person
would no longer be an Acquiring Person, then such person shall not be deemed
an Acquiring Person. The Rights Plan also provides that neither First
Financial Bancorp., Hamilton, Ohio, nor any officer, director, employee,
Affiliate or Associate of First National Bancorp. or of any Affiliate of First
National Bancorp. shall be deemed a beneficial owner of Common Stock which is
held by First Financial Bancorp. or any of its Affiliates in a fiduciary or
custodial capacity, other than shares as to which any such excluded person has
an actual ownership interest.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with Common Stock certificates.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued upon transfer or new issuance of
the Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common
Stock (with or without a Summary of Rights attached) will also constitute the
transfer of the Rights (or fractional Rights) associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of
the Distribution Date, and the separate Rights Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the earlier of (i) December 15, 2009, or (ii) the date
of redemption by the Company as described below.
Page 4 of 118 Pages
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The Purchase Price payable, and the number of shares of Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the Common Stock,
(ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and
preferences as the Common Stock at less than the current market price of the
Common Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends out of earnings or retained earnings and dividends payable in Common
Stock ) or of subscription rights or warrants (other than those referred to
above). In addition to or in lieu of any such adjustments, the Board of
Directors has the authority to make such adjustments to the exercise price of
the Rights, the number of shares of Common Stock eligible for purchase on
exercise of each Right or the number of Rights outstanding as it deems
appropriate in the circumstances and not inconsistent with the objectives of
the Board in adopting the Rights Agreement.
In the event that, following the Stock Acquisition Date, the
Company is involved in a merger or consolidation (other than a merger or
consolidation which would result in all of the voting power represented by the
securities of the Company outstanding prior thereto continuing to represent
all of the voting power of the surviving company and the holders of such
securities not having changed as a result thereof), or 50% or more of the
assets or earning power of the Company and its subsidiaries are sold (in one
transaction or a series of transactions), proper provision shall be made so
that each holder of a whole Right shall thereafter have the right to receive
(unless the Rights have been redeemed as described below) upon the exercise
thereof at the then-current exercise price of the whole Right, that number of
shares of common stock of the acquiring company (or, in the event there is
more than one acquiring company, the acquiring company receiving the greatest
portion of the assets or earning power transferred) which at the time of such
transaction would have a market value of two times the exercise price of the
Right (such right being called the "Merger Right").
Page 5 of 118 Pages
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In the event that a person becomes an Acquiring Person, proper
provision shall be made so that each holder of a whole Right will, for a 60-
day period commencing on the eleventh business day after the Stock Acquisition
Date (or for a period of 60 days following the effective date of the relevant
registration statement), have the right to receive (unless the Rights have
been redeemed as described below) upon exercise thereof at the then-current
exercise price of the Right that number of shares of Common Stock of the
Company having a market value of two times the exercise price of the Right, to
the extent sufficient shares are legally available therefor, and then (after
all legally available shares of Common Stock have been issued) a common stock
equivalent (such as preferred stock, if then authorized and legally available
therefor, or another equity security with at least the same economic value as
the common), having a market value of two times the exercise price of the
Right, with Common Stock to the extent available being issued first (such
right being called the "Subscription Right"). If the Company is unable to
cause sufficient shares of Common Stock and/or common stock equivalents to be
available for issuance upon exercise of the Rights, each Right shall
thereafter represent the right to receive an adjusted number of shares of
Common Stock and/or common stock equivalents at an adjusted purchase price,
such adjustments to be made in accordance with the Rights Agreement. The
holder of a Right will continue to have the Merger Right whether or not such
holder exercises the Subscription Right.
Upon the occurrence of any of the events giving rise to the
exercisability of the Subscription Right or the Merger Right, any Rights
(including fractional Rights) that are or were beneficially owned by an
Acquiring Person on or after the earlier of the Distribution Date or the Stock
Acquisition Date shall become void insofar as they relate to the Subscription
Right or the Merger Right and any holder of such Rights will have no right to
exercise such Rights insofar as they relate to the Subscription Right or the
Merger Right.
Page 6 of 118 Pages
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With certain exceptions, no adjustments in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) the close of
business on the tenth business day after the Stock Acquisition Date or (ii)
the close of business on the date of expiration of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of $0.01 per whole
Right (the "Redemption Price"), which redemption shall be effective upon the
action of the Board of Directors of the Company. Additionally, the Company
may thereafter redeem the then-outstanding Rights in whole, but not in part,
at the Redemption Price following an event giving rise to, and the expiration
of the exercise period for, the Subscription Right if and for as long as no
person beneficially owns 20% or more of the outstanding shares of Common Stock
of the Company. Upon the effective date of the redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Company and the Rights
Agent without the consent of the holders of the Rights, including an amendment
to lower the threshold for exercisability of the Rights from 20% to not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding shares of Common Stock then known to the Company to be
beneficially owned by any person or group of affiliated or associated persons
and (ii) 10%, except that from and after the Distribution Date, no such
amendment may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Page 7 of 118 Pages
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A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission (the "Commission") as an Exhibit to a Current Report
on Form 8-K. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
Page 8 of 118 Pages
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Item 2. Exhibits.
---------
Item 2 is hereby amended in its entirety as follows:
Exhibit No. Description Page No.
- ----------- ----------- --------
4a, 4b Rights Agreement dated as of Filed as Exhibit to
December 15, 1989, between the Ohio Casualty
Ohio Casualty Corporation Corporation Form 8-A
and Mellon Bank, N.A., which dated December 15,
includes as Exhibit A the form 1989, filed with SEC
of Right Certificate on December 19, 1989
4c First Supplement to Rights Filed as an Exhibit
Agreement dated as of to a Form 8 Amend-
February 28, 1990 ment to the Ohio
Casualty Corporation
Form 8-A, which
amendment was dated
October 30, 1990,
and was filed with
the SEC on November 7,
1990
4d Second Supplement to Rights Filed as an Exhibit
Agreement dated as of to a Form 8 Amend-
October 17, 1990 ment to the Ohio
Casualty Corporation
Form 8-A, which amend-
ment was dated
October 30, 1990,
and was filed with
the SEC on November 7,
1990
4e Conformed copy of Third Filed as Exhibit to
Supplement to Rights Agree- a Form 8-A/A dated
ment dated as of March 15, April 1, 1994, and
1994 filed with the SEC
on April 16, 1994
Page 9 of 118 Pages
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4f Amended and Restated Rights 13
Agreement dated as of
February 19, 1998, between
Ohio Casualty Corporation
and First Chicago Trust Company
of New York, as Rights Agent,
which includes as Exhibit A
the form of Rights Certificate
99.1 Letter sent to the shareholders Filed as Exhibit to
of Ohio Casualty Corporation the Ohio Casualty
with regard to the adoption Corporation Form 8-A
of the Rights Agreement and dated December 15,
the issuance of the Rights 1989, filed with SEC
on December 19, 1989
99.2 Certificate of Adjustment Filed as Exhibit to
by the Company dated as of a Form 8-A/A dated
April 1, 1994 April 1, 1994, and
filed with the SEC
on April 16, 1994
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized.
OHIO CASUALTY CORPORATION
Date: February 19, 1998 By: /s/ Lauren N. Patch
-----------------------------
Its President and Chief Executive
Officer
Page 10 of 118 Pages
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INDEX TO EXHIBITS
Exhibit No. Description Page No.
- ----------- ----------- --------
4a, 4b Conformed copy of Rights Agreemen Filed as Exhibit to
dated as of December 15, 1989, the Ohio Casualty
between Ohio Casualty Corporation Corporation Form 8-A
and Mellon Bank, N.A., which dated December 15,
includes as Exhibit A the form 1989, filed with SEC
of Right Certificate on December 19, 1989
4c Conformed copy of First Supple- Filed as an Exhibit
ment to Rights Agreement dated to a Form 8 Amend-
as of February 28, 1990 ment to the Ohio
Casualty Corporation
Form 8-A, which
amendment was dated
October 30, 1990,
and was filed with
the SEC on November 7,
1990
4d Conformed copy of Second Filed as an Exhibit
Supplement to Rights Agree- to a Form 8 Amend-
ment dated as of October 17, ment to the Ohio
1990 Casualty Corporation
Form 8-A, which amend-
ment was dated
October 30, 1990,
and was filed with
the SEC on November 7,
1990
4e Conformed copy of Third Filed as Exhibit to
Supplement to Rights Agree- a Form 8-A/A dated
ment dated as of March 15, April 1, 1994, and
1994 filed with the SEC
on April 16, 1994
Page 11 of 118 Pages
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4f Amended and Restated Rights 13
Agreement dated as of
February 19, 1998, between
Ohio Casualty Corporation
and First Chicago Trust Company
of New York, as Rights Agent,
which includes as Exhibit A
the form of Rights Certificate
99.1 Form of letter sent to the Filed as Exhibit to
shareholders of Ohio Casualty the Ohio Casualty
Corporation with regard to the Corporation Form 8-A
adoption of the Rights Agree- dated December 15,
ment and the issuance of the 1989, filed with SEC
Rights on December 19, 1989
99.2 Certificate of Adjustment Filed as Exhibit to
by the Company dated as of a Form 8-A/A dated
April 1, 1994 April 1, 1994, and
filed with the SEC
on April 16, 1994
Page 12 of 118 Pages
<PAGE> 1
OHIO CASUALTY CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
---------------------
Amended and Restated Rights Agreement
Dated as of February 19, 1998
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TABLE OF CONTENTS
-----------------
Section Page
- -------
1 Certain Definitions 2
2 Appointment of Rights Agent 11
3 Issue of Rights Certificates 13
4 Form of Rights Certificates 17
5 Countersignature and Registration 18
6 Transfer, Split Up, Combination and Exchange of
Rights Certificate; Mutilated, Destroyed, Lost
or Stolen Rights Certificates 20
7 Exercise of Rights; Purchase Price; Expiration
Date of Rights 21
8 Cancellation and Destruction of Rights Certificates 26
9 Reservation and Availability of Common Stock 26
10 Common Stock Record Date 29
11 Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights 30
12 Certificate of Adjusted Purchase Price or
Number of Shares 49
13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 49
14 Additional Covenants 55
15 Fractional Rights and Fractional Shares 56
16 Rights of Action 59
17 Agreement of Rights Holders 60
18 Rights Certificate Holder Not Deemed a Shareholder 61
i
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19 Concerning the Rights Agent 62
20 Merger or Consolidation or Change of Name of Rights Agent 63
21 Duties of Rights Agent 64
22 Change of Rights Agent 69
23 Issuance of New Rights Certificates 72
24 Redemption and Termination 72
25 Notice of Certain Events 75
26 Notices 77
27 Supplements and Amendments 78
28 Determination and Actions by the Board of
Directors, etc. 79
29 Successors 81
30 Benefits of this Agreement 81
31 Severability 81
32 Governing Law 82
33 Counterparts 83
34 Descriptive Headings 83
Exhibit A -- Form of Rights Certificate A-1
Exhibit B -- Form of Summary of Rights B-1
ii
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AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
This Amended and Restated Rights Agreement, dated as of February
19, 1998, between Ohio Casualty Corporation, an Ohio corporation (the
"Company"), and First Chicago Trust Company of New York (the "Rights Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on December 15, 1989, the Board of Directors of the
Company authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each Common Share, par value Twelve and One-Half
Cents ($ .125) per share, of the Company ("Common Stock") outstanding on
December 29, 1989 (the "Record Date"), and contemplated the issuance of one
Right (subject to adjustment as provided herein) for each share of Common
Stock of the Company issued between the Record Date and the earliest of the
Distribution Date and the Expiration Date (as such terms are hereinafter
defined), each Right representing initially the right to purchase one share of
Common Stock of the Company, upon the terms and subject to the conditions set
forth in the Rights Agreement, dated as of December 15, 1989, between the
Company and First Chicago Trust Company of New York, as the successor Rights
Agent to Mellon Bank, N.A., as amended and supplemented on February 20, 1990,
October 17, 1990, April 1,
<PAGE> 5
1994 and June 8, 1995 (the "Prior Rights Agreement") (such Rights being herein
referred to as the "Rights");
WHEREAS, in connection with a two-for-one share split, the
Board of Directors of the Company in April, 1994 amended the Prior Rights
Agreement and the Rights so that each outstanding share of Common Stock
following such share split (including each new share of Common Stock issued
pursuant to such share split) will be accompanied by one-half of one Right,
subject to later adjustment; and
WHEREAS, the Board of Directors of the Company has determined
that it is advisable and in the best interests of the Company and its
shareholders to amend and restate in its entirety the Prior Rights Agreement
as set forth herein and the Rights henceforth so governed by the terms and
subject to the conditions set forth herein.
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 have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
2
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Affiliates (as such term is hereinafter defined) and Associates (as such term
is hereinafter defined) of such Person, without the prior approval of the
Board of Directors of the Company, shall be the Beneficial Owner (as such term
is hereinafter defined) of 20% or more of the shares of Common Stock of the
Company then outstanding, but shall not include (i) the Company, (ii) any
subsidiary of the Company (as such term is hereinafter defined), (iii) any
employee benefit plan of the Company or any of its subsidiaries, (iv) any
entity holding securities of the Company organized, appointed or established
by the Company or any of its subsidiaries for or pursuant to the terms of any
such employee benefit plan or (v) Joseph L. Marcum or any Affiliate or
Associate of Joseph L. Marcum. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of Common Stock
by the Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to 20% or
more of the shares of Common Stock of the Company then outstanding; provided,
--------
however,
- ------- that if a Person shall become the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company
and while such
3
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Person is a Beneficial Owner of 20% or more of the shares of Common Stock of
the Company then outstanding, become the Beneficial Owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed to be
an "Acquiring Person." Further notwithstanding the first sentence of this
paragraph (a), no Person nor any Affiliate or Associate of any such Person
shall become an "Acquiring Person" as a result of such Person receiving Common
Stock of the Company as a result of a gift or by bequest or inheritance, or by
operation of law upon the death of any Person (an "exempt transfer"), which
exempt transfer increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the shares of Common Stock of the
Company then outstanding; provided, however,
-------- ------- that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock of the Company
then outstanding by reason of any such exempt transfer and shall, after such
exempt transfer and while such Person is a Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding, become the
Beneficial Owner of any additional shares of Common Stock of the Company other
than by virtue of further such exempt transfers, then such Person shall be
deemed to be an "Acquiring Person." Notwithstanding the foregoing, if the
Board
4
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of Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
(b) (1) The term "Affiliate" shall have the meaning
ascribed to such term in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement; provided, however,
-------- ------- that no employee
benefit plan or similar plan of the Company or of any subsidiary of the
Company shall be deemed an Affiliate or Associate of any Person by reason of
such Person serving as a trustee, administrator or fiduciary of such plan or
as a member of any board, committee or group administering, supervising or
managing any such plan.
(2) The term "Associate," when used herein to
indicate a relationship with a specified Person, shall mean (1) any
corporation or organization (other than the Company or a
5
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subsidiary of the Company) of which such specified Person is an officer or
partner or is, directly or indirectly, the beneficial owner of 10 percent or
more of any class or equity securities, (2) any trust or other estate in which
such specified Person has a substantial beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity, and (3) any
relative or spouse of such Person who has the same home as such Person;
provided, however,
- -------- ------- that no employee benefit plan or similar plan of the Company
or of any subsidiary of the Company shall be deemed an Associate of any Person
by reason of such Person serving as a trustee, administrator or fiduciary of
such plan or as a member of any board, committee or group administering,
supervising or managing any such plan.
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially
owns, directly or indirectly; provided,however,
-------- -------
that securities held for, by, or on behalf of,
any employee benefit plan or similar plan of
the Company or of any
6
<PAGE> 10
subsidiary of the Company shall not be deemed
beneficially owned, directly or indirectly, by
any Person unless such Person is a participant
in such plan and then shall be deemed
beneficially owned by such Person only to the
extent of such Person's vested ownership
interest in such securities;
(ii) which such Person or any of
such Person's Affiliates or Associates has
(A) the right or obligation to acquire (whether
such right or obligation is exercisable or
effective immediately or only after the passage
of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or
upon the exercise of conversion rights,
exchange rights, rights (other than these
Rights), warrants or options, or otherwise;
provided, however,
-------- ------- that a Person shall not be
deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered
pursuant to a tender or exchange offer made by
such Person or any of such Person's
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Affiliates or Associates until such tender
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 a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own," any security under this clause (B) if the
agreement, arrangement or understanding to vote
such security (1) arises from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not
also then reportable by such person on
Schedule 13D under the Exchange Act (or any
comparable or successor report) or if the right
to vote results from such Person or any of such
Person's Associates or Affiliates serving as a
trustee, administrator or fiduciary of any
employee benefit plan or similar plan of the
Company or any of its
8
<PAGE> 12
subsidiaries or as a member of any board,
committee or group administering, supervising
or managing any such plan; or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or
understanding (whether or not in writing)
(other than customary agreements with and
between underwriters and selling group members
with respect to a bona fide public offering of
securities), for the purpose of acquiring,
holding, voting (except pursuant to a revocable
proxy as described in clause (B) of
subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company;
provided, however,
-------- ------- that a Person shall not be
deemed a "Beneficial Owner" of, or to
"beneficially own" any security under this
subparagraph (iii) if the agreement,
arrangement or understanding
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arises out of such Person or any of such
Person's Affiliates or Associates serving as a
trustee, administrator or fiduciary of any
employee benefit plan or similar plan of the
Company or any of its subsidiaries or as a
member of any board, committee or group
administering, supervising or managing any such
plan.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York, Ohio or
New Jersey are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 p.m.,
City of New York, New York time, on such date; provided, however, that
-------- -------
if such date is not a Business Day it shall mean 5:00 p.m., City of New
York, New York time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the Common Shares, par value $ .125
per share, of the Company, except that "Common Stock" when used with
reference to stock issued by any Person other than the Company shall mean
the capital stock with the greatest voting power, or the equity securities or
other equity
10
<PAGE> 14
interest having power to control or direct the management, of such Person or,
if such Person is a subsidiary of another Person, of the Person which
ultimately controls such first-mentioned Person and which has issued and
outstanding such capital stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(h) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(i) A "subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or voting interest is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(j) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding generally entitled to vote for the election of
directors of the Company.
Anything contained in this Section 1 or elsewhere in this
Agreement to the contrary notwithstanding, neither First Financial Bancorp.,
Hamilton, Ohio, or any successor thereto ("First Financial") nor any officer,
director, employee,
11
<PAGE> 15
Affiliate (including First National Bank of Southwestern Ohio) or Associate of
First Financial or of any Affiliate of First Financial shall be deemed a
"Beneficial Owner" of, or to "beneficially own," any shares of Common Stock
which are held by First Financial or any of its Affiliates (including First
National Bank of Southwestern Ohio) in a fiduciary or custodial capacity,
provided, however, that any such Person shall be deemed a "Beneficial Owner"
of any such shares of Common Stock as to which such Person has an actual
economic ownership interest.
Any determination of any fact or matter required by the
definitions contained in this Section 1 shall be made by the Board of
Directors of the Company in their good faith judgment, which determination
shall be final and binding on the Rights Agent and all holders of the Rights.
Section 2. Appointment of Rights Agent.
---------------------------- The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. In the event the Company appoints one
or more Co-Rights Agents, the respective duties of
12
<PAGE> 16
the Rights Agent and any Co-Rights Agents shall be as the Company shall
determine.
Section 3. Issue of Rights Certificates.
-----------------------------
(a) Until the earlier of (i) the close of business on
the tenth Business Day after the Stock Acquisition Date or (ii) the close of
business on the tenth Business Day (or such later date and time as may be
determined by action of the Board of Directors prior to such Person becoming
an Acquiring Person) after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any
subsidiary of the Company, any employee benefit plan of the Company or any of
its subsidiaries or any entity holding securities of the Company organized,
appointed or established by the Company or a subsidiary for or pursuant to the
terms of any such plan) to commence (which intention to commence remains in
effect for five Business Days after such announcement), a tender or exchange
offer which would result in such Person becoming an Acquiring Person (the
earlier of such times described in (i) and (ii) above being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for Common
Stock registered in the names of the holders of the Common Stock
13
<PAGE> 17
(which certificates for Common Stock shall be deemed also to be certificates
for Rights) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company); provided, however, that if a tender or
exchange offer is terminated prior to the occurrence of the Distribution Date,
then no Distribution Date shall occur as a result of such tender or exchange
offer. 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 Distribution Date, at the address of such holder
shown on the records of the Company, a certificate for Rights, in
substantially the form of Exhibit A hereto (the "Rights Certificates"),
evidencing one-half of one Right to purchase one share of Common Stock
(subject to later adjustment) for each share of Common Stock so held. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the date of this Agreement, until the Distribution Date (or
the earlier redemption, expiration or termination of the Rights), the Rights
will be evidenced by such
14
<PAGE> 18
certificates for the Common Stock and the registered holders of Common Stock
shall also be the registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates for the Common
Stock outstanding on the date of this Agreement (including transfer to the
Company) shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Upon the request of the holder
of any shares of Common Stock or, after the Distribution Date, the holder of
any Rights Certificates, the Company shall, at its expense, provide a copy of
the Summary of Rights in the form attached hereto as Exhibit B.
(c) Certificates issued for Common Stock (including,
without limitation, certificates issued upon transfer or exchange of Common
Stock or certificates issued upon exercise of options) after the date of this
Agreement, but prior to the earlier of the Distribution Date or the Expiration
Date (as such term is hereinafter defined), shall be deemed also to be
certificates for Rights, and shall have impressed, printed, stamped, written
or otherwise affixed onto them the following legend (or a similar legend):
15
<PAGE> 19
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in the Amended and Restated Rights
Agreement, dated as of February 19, 1998 (the
"Rights Agreement"), between Ohio Casualty
Corporation and the Rights Agent thereunder,
the terms of which are hereby incorporated
herein by reference and a copy of which is on
file at the principal offices of Ohio Casualty
Corporation. Under certain circumstances as
set forth in the Amended and Restated Rights
Agreement, such Rights may be redeemed, may
expire, or may be evidenced by separate
certificates and will no longer be evidenced by
this certificate. Ohio Casualty Corporation
will mail to the holder of this certificate a
copy of the Amended and Restated Rights
Agreement without charge within five days after
receipt of a written request therefor. Under
certain circumstances, Rights issued to
Acquiring Persons (as defined in the Amended
and Restated Agreement) or certain related
persons and any subsequent holder of such
Rights may become null and void with respect to
certain rights set forth in the Amended and
Restated Rights Agreement.
With respect to such certificates containing the foregoing legend (or the
legend provided for in the Prior Rights Agreement), until the Distribution
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, 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.
In the event that the Company purchases or acquires any shares of
16
<PAGE> 20
Common Stock prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Stock which
is no longer outstanding.
Section 4. Form of Rights Certificates.
----------------------------
(a) The Rights Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 23 hereof, the Rights Certificates,
whenever distributed, on their face shall entitle the holders thereof, subject
to the terms and conditions of this Agreement, to purchase such number of
shares of Common Stock as shall be set forth therein at the price per share
set forth therein (the
17
<PAGE> 21
"Purchase Price"), but the number of such shares and the Purchase Price shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) hereof that represents Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof and any Rights Certificate issued
at any time upon the transfer of any Rights to such an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate, and any Rights Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall contain the
following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFI-
CATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSO-
CIATE OF AN ACQUIRING PERSON. THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID TO THE EXTENT PROVIDED BY, AND
UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN,
SECTION 7(e) OF THE RIGHTS AGREEMENT.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration.
---------------------------------- The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President or any Vice President,
18
<PAGE> 22
either manually or by facsimile signature, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be signed
on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the names
and addresses of the
19
<PAGE> 23
respective holders of the Rights Certificates, the number of Rights evidenced
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Rights Certificates; Mutilated, Destroyed, Lost or
- --------------------------------------------------
Stolen Rights Certificates.
- ---------------------------
Subject to the provisions of Section 15 hereof,
at any time after the Distribution Date, and at or prior to the Final
Expiration Date (as hereinafter defined) (or earlier redemption, expiration or
termination of the Rights), any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Common Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient
20
<PAGE> 24
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
---------------------------------------------------
of Rights.
- ----------
(a) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon presentation of
the Rights Certificate, with the appropriate form of election to purchase on
the
21
<PAGE> 25
reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Purchase Price for
each share of Common Stock (or such other number of shares or other
securities) as to which the Rights are exercised, at or prior to the earlier
of (i) the close of business on December 15, 2009 (the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided in
Section 24 hereof (such earlier time being herein referred to as the
"Expiration Date"). Notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record holder of
shares of Common Stock may exercise all of the rights of a registered holder
of a Rights Certificate with respect to the Rights associated with such shares
of Common Stock in accordance with and subject to the provisions of this
Agreement, including the provision of Section 7(e) hereof, as of the date such
Person becomes a record holder of shares of Common Stock.
(b) The Purchase Price for each share of Common
Stock pursuant to the exercise of a Right shall be Two Hundred Fifty Dollars
($250.00), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be
22
<PAGE> 26
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate repre-
senting exercisable Rights, with the appropriate form of election to purchase
duly executed, accompanied by payment of the Purchase Price for the shares to
be purchased and an amount equal to any applicable transfer tax (as determined
by the Rights Agent) in cash, or by certified check, money order or bank draft
payable to the order of the Company, the Rights Agent shall, subject to
Section 21(k), thereupon promptly (i) requisition from any transfer agent of
the shares of Common Stock (or make available, if the Rights Agent is the
transfer agent) certificates for the number of shares of Common Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 15, (iii) promptly after receipt
of such certificates, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the
23
<PAGE> 27
registered holder of such Rights Certificate. In the event that the Company
is obligated to issue other securities of the Company, the Company will make
all arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate. In addition, in
the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to
the registered holder thereof after imprinting, stamping or otherwise
indicating thereon that the rights represented by such Rights Certificate no
longer include the rights provided by Section 11(a)(ii) of the Rights
Agreement and if less than all the Rights represented by such Rights Certifi-
cate were so exercised, the Rights Agent shall indicate on the Rights
Certificate the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section 11(a)(ii)) less than
all the Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Rights Certificate or to
his duly
24
<PAGE> 28
authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, if an Acquiring Person or an Associate or Affiliate of an
Acquiring Person engages in or there occurs one or more of the events or
transactions set forth in Section 11(a)(ii) or Section 13(a) on or after the
time the Acquiring Person became such, then any Rights that are or were on or
after the earlier of the Distribution Date or the Stock Acquisition Date
beneficially owned by any Acquiring Person or any Associate or Affiliate of an
Acquiring Person shall become void with respect to the rights provided under
Section 11(a)(ii) and Section 13(a) and any holder of such Rights shall
thereafter have no right to exercise such Rights under the provisions of
Section 11(a)(ii) and Section 13(a).
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless the
certificate contained in the appropriate form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
exercise shall
25
<PAGE> 29
have been properly completed and duly executed by the registered holder
thereof and the Company shall have been provided with such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
---------------------------------------
Certificates.
- ------------- All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
---------------------------------------------
The Company covenants and agrees that it will cause to be
26
<PAGE> 30
reserved and kept available out of its authorized and unissued shares of
Common Stock, or any authorized and issued shares of Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights and, after the
occurrence of an event specified in Section 11, shall so reserve and keep
available a sufficient number of shares of Common Stock (and/or other
securities), to the extent available under applicable law, which may be
required to permit the exercise in full of the Rights pursuant to this
Agreement.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock and/or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any certificates for shares of Common Stock upon the
exercise of Rights. The Company
27
<PAGE> 31
shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to a person
other than, or the issuance or delivery of certificates for the Common Stock
in a name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for shares of Common Stock upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, as soon
as practicable following the Distribution Date, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act and the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii) or the redemption of
the Rights in accordance
28
<PAGE> 32
with Section 24. The Company will also take such action as may be appropriate
under the blue sky laws of the various states.
Section 10. Common Stock Record Date.
------------------------- Each person in whose
name any certificate for shares of Common Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the shares of Common Stock represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing such Rights
was duly and properly presented and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however,
-------- ------- that if the date of
such presentation and payment is a date upon which the Common Stock transfer
books of the Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Common Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any rights
of a shareholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any
29
<PAGE> 33
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
------------------------------------------------
Shares or Number of Rights.
- --------------------------- The Purchase Price, the number of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend
on the Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding Common Stock, (C) combine
the outstanding Common Stock into a smaller number of
shares of Common Stock or (D) issue any shares of its
capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with
a consolidation or merger in which the Company is the
continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and in
Section 7(e), the Purchase Price in effect at the time
of the record date for such dividend or of the
effective date of such subdivision,
30
<PAGE> 34
combination or reclassification, and the number and
kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled
to receive the aggregate number and kind of shares of
capital stock and other securities which, if such Right
had been exercised immediately prior to such date and
at a time when the Common Stock transfer books of the
Company were open, he would have owned upon such exer-
cise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement,
in the event that any Person (other than the Company,
any subsidiary of the Company, any employee benefit
plan of the Company or any of its
31
<PAGE> 35
subsidiaries or any entity holding securities of the
Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to
the terms of any such plan), alone or together with its
Affiliates and Associates, shall become an Acquiring
Person, then proper provision shall be made so that
each holder of a Right, except as provided in Section
7(e) hereof, shall, for a period of 60 days commencing
on the later of (i) the eleventh Business Day after the
Stock Acquisition Date and (ii) the first date
following the effective date of an appropriate
registration statement pursuant to Section 9, have a
right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of
this Agreement, in lieu of the number of shares of
Common Stock previously subject to the Right, such
number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of
shares of Common Stock for which a Right is then
exercisable and dividing that product by (y)
32
<PAGE> 36
50% of the current market price per one share of Common
Stock (determined pursuant to Section 11(d)) on the
date of the occurrence of the event set forth above in
this subparagraph (ii) giving rise to the rights under
Section 11(a)(ii)) (such number of shares being
referred to as the "number of Adjustment Shares");
provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply
and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there shall not be
available for such purpose under applicable law
sufficient treasury shares or authorized but unissued
shares of Common Stock to permit the exercise in full
of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable,
notwithstanding any other provision of this Agreement,
to the extent necessary and permitted by applicable law
and any
33
<PAGE> 37
agreements in effect on the date hereof to which the
Company is a party, each Right shall thereafter
represent the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with
the terms of this Agreement, a number of shares of (x)
Common Stock (up to the maximum number of shares of
Common Stock which may permissibly be issued using the
allocation procedure specified in the second sentence
of Section 11(k)) and (y) other shares or fractions of
shares (to the extent available for such purposes under
applicable law) equal in the aggregate to the number of
Adjustment Shares where the Board of Directors of the
Company shall have deemed such other shares or
fractions of shares to have at least the same economic
value as the Common Stock (a "common stock
equivalent"); provided, however,
-------- ------- if there are
unavailable sufficient shares of Common Stock and/or
common stock equivalents, then the Company shall, to
the extent permitted by applicable law and any such
agreements in effect on the date hereof to which
34
<PAGE> 38
it is a party, take all such action as may be necessary
and permissible under applicable law to authorize
additional shares of Common Stock or common stock
equivalents for issuance upon exercise of the Rights,
including the calling of a meeting of shareholders; and
---
provided, further, that the Company shall issue no
-------- -------
common stock equivalent upon exercise of the Rights
until the Company has first issued all authorized and
unreserved shares of Common Stock available under
applicable law for exercise of the Rights; and
---
provided, further, that if the Company is unable to
-------- -------
cause sufficient shares of Common Stock and/or common
stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall
thereafter represent the right to receive the Adjusted
Number of Common Sha res upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined).
As used herein, the term Adjusted Number of Common
Shares shall be equal to that number of shares of
Common Stock (and/or shares of common stock
equivalents) equal
35
<PAGE> 39
to the product of (x) the number of Adjustment
Shares and (y) a fraction, the numerator of which is
the number of shares of Common Stock (and/or shares of
common stock equivalents) available for issuance upon
exercise of the Rights and the denominator of which is
the aggregate number of Adjustment Shares otherwise
issuable upon exercise in full of all Rights (assuming
there were sufficient shares of Common Stock available)
(such fraction being referred to as the "Proration
Factor"). The Adjusted Purchase Price shall mean the
product of the Purchase Price and the Proration Factor.
The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to
receive Common Stock and common stock equivalents upon
exercise of the Rights among holders of Rights.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Stock (or shares having the
same or more
36
<PAGE> 40
favorable rights, privileges and preferences as the Common Stock ("equivalent
common stock")) or securities convertible into Common Stock or equivalent
common stock at a price per share of Common Stock or per share of equivalent
common stock (or having a conversion price per share, if a security
convertible into Common Stock or equivalent common stock) less than the
current market price (as defined in Section 11(d)) per share of Common Stock
on such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock and/or equivalent common stock to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock and/or equivalent common stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription
37
<PAGE> 41
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be determined
reasonably and with good faith to the holders of Rights by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent. Shares of Common Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in Common
Stock, but including any dividend payable in stock other than Common Stock) or
subscription rights or warrants
38
<PAGE> 42
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as defined in Section
11(d)) per share of Common Stock on such record date, less the fair market
value (as determined reasonably and with good faith to the holders of Rights
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
distributable in respect of one share of Common Stock, and the denominator of
which shall be the current market price per share of the Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would be in effect if
such record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than in Section 11(a)(iii), the "current market price" per share of
Common Stock on any date shall be deemed to be the
39
<PAGE> 43
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however,
-------- ------- that in the event that the current per
share market price of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock or (B) any
subdivision, combination or reclassification of such Common Stock, and prior
to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on The New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on The New York Stock Exchange, as
reported
40
<PAGE> 44
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined reasonably and
with good faith by the Board of Directors of the Company shall be used and
shall be binding on the Rights Agent. The term, "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
41
<PAGE> 45
trading on any national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share determined reasonably and with
good faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however,
- -------- ------- that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a share of Common Stock or other share. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
42
<PAGE> 46
(f) If as a result of any provision of Section
11(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the shares of Common Stock contained in Section 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 15
hereof with respect to the Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) below, upon each adjustment of the
Purchase Price as a result of the calculations made in Section 11(b) and (c),
each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the
43
<PAGE> 47
right to purchase, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest ten thousandth) obtained by (i)
multiplying (x) the number of shares of Common 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) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of shares of Common Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. If Rights
Certificates have been issued, the Company shall make a public announcement of
44
<PAGE> 48
its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number or Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 15 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered
45
<PAGE> 49
in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if any, of
the shares of Common Stock or other securities 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 shares of Common Stock or other securities
at such adjusted Purchase Price. If upon any exercise of the Rights, a holder
is to receive a combination of Common Stock and common stock equivalents, a
portion of the consideration paid upon such exercise, equal to at least the
then par value of a share of Common Stock of the Company, shall be allocated
as the payment for each share of Common Stock of the Company so received
46
<PAGE> 50
(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 shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however,
-------- ------- that the Company
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of
the Common Stock, issuance wholly for cash of any shares of Common Stock at
less than the current market price, issuance wholly for cash or shares
47
<PAGE> 51
of Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such shareholders.
(n) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii) to the extent
so exercised and shall not otherwise affect the rights represented by the
Rights under this Rights Agreement, including the rights represented by
Section 13.
(o) Notwithstanding anything in this Agreement to
the contrary, prior to the Distribution Date, the Company may, in lieu of or
in addition to making any adjustment to the Purchase Price, the number of
shares of Common Stock eligible for purchase on exercise of each Right or the
number of Rights outstanding, which adjustment would otherwise be required by
Sections 11(a)(i), 11(b), 11(c), 11(h) or 11(i), make such other equitable
adjustment or adjustments to the Rights as the Board of Directors (whose
determination shall be conclusive) deems appropriate in the circumstances and
not inconsistent with the objectives of the Board of Directors in adopting
this Agreement.
48
<PAGE> 52
Section 12. Certificate of Adjusted Purchase Price or Number
------------------------------------------------
of Shares.
- ---------- Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with the transfer
agent for the Common Stock a copy of such certificate and (c) provide a brief
summary of the adjustment to each holder of a Rights Certificate (or, if prior
to the Distribution Date, to each holder of a certificate representing Common
Stock) in accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificates and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power.
- ------------------------
(a) Subject to Section 24, in the event that,
following the Stock Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person, (y) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such
merger (other than, in the case of either transaction described in (x) or (y),
a merger or consolidation which would result in all of the Voting
49
<PAGE> 53
Power represented by the securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into securities of the surviving entity) all of the Voting
Power represented by the securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell or otherwise transfer (or one or
more of its subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) to any
other Person, then, and in each such case, proper provision shall be made so
that (i) following the Distribution Date, each holder of a Right, subject to
Section 7(e), shall 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 freely tradable Common Stock of the
Principal Party (as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall be equal
to the result obtained by (l) multiplying the then current Purchase Price by
the number of shares of Common Stock
50
<PAGE> 54
for which a Right is then exercisable (or, if an event under Section 11(a)(ii)
has occurred previously, multiplying the number of shares of Common Stock for
which a Right was exercisable immediately prior to such Section 11(a)(ii)
event by the Purchase Price in effect immediately prior to such event) and
dividing that product by (2) 50% of the current market price per share of the
Common Stock of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of 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 its shares of Common Stock
thereafter deliverable upon the exercise of the Rights.
51
<PAGE> 55
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in (x) or (y) of the first sentence of this Section 13,
the Person that is the issuer of any securities into
which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other
party to the merger or consolidation (including, if
applicable, the Company, if it is the surviving
corporation); and
(ii) in the case of any transaction described
in (z) of the first sentence in this Section 13, the
Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to
such transaction or transactions; provided, however,
-------- -------
that in any such case, (l) if the Common Stock of such
Person is not at such time and has not been continu-
ously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person
is a direct or indirect subsidiary or Affiliate of
another Person, "Principal Party" shall refer to such
other Person; (2) in case such Person is a subsidiary,
directly or indirectly, or Affiliate of more than one
Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party"
52
<PAGE> 56
shall refer to whichever of such Persons is the issuer
of the Common Stock having the greatest aggregate
market value; and (3) in case such Person is owned,
directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in
(l) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as
if such party were a "subsidiary" of both or all of
such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of
such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
53
<PAGE> 57
Company and each Principal Party and each other Person who may become a
Principal Party as a result of such consolidation, merger, sale or transfer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in paragraph (a)
of this Section 13, the Principal Party at its own expense will
(i) prepare and file a registration
statement under the Act with respect to the Rights and
the securities purchasable upon exercise of the Rights
on an appropriate form, will use its best efforts to
cause such registration statement to become effective
as soon as practicable after such filing and will use
its best efforts to cause such registration statement
to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the
Expiration Date;
(ii) use its best efforts to qualify or
register the Rights and the securities purchasable
54
<PAGE> 58
upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all material
respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights under this Section
13 shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereunder.
Section 14. Additional Covenants.
---------------------
(a) After the Stock Acquisition Date, unless the
Rights have been redeemed pursuant to Section 24, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer to, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its subsidiaries taken as a whole, any other Person if at the time of or
after such consolidation, merger or sale there are any provisions
55
<PAGE> 59
of the articles of incorporation (charter) or code of regulations (by-laws) of
the Company or any other Person or any rights, warrants or other instruments
of the Company or any other Person outstanding or any other action taken which
would diminish or otherwise eliminate the benefits intended to be afforded by
the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the
Stock Acquisition Date, it will not, except as permitted by Section 24, take
any action the purpose or effect of which is to diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue
fractions of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same
56
<PAGE> 60
fraction of the current market value of a whole Right. For the purposes of
this Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company shall be used and
shall be binding on the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the
57
<PAGE> 61
Company may pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of a share of Common Stock. For
purposes of this Section 15(b), the current market value of a share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of an event giving rise
to the right under Section 11(a)(ii) to receive common stock equivalents or
other securities upon the exercise of a Right, the Company shall not be
required to issue fractions of shares of such common stock equivalents or
other securities upon exercise of the Rights or to distribute certificates
which evidence fractional shares of such common stock equivalents or other
securities. In lieu of fractional shares of such common stock equivalents or
other securities, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
share of such common stock equivalent or other securities. For purposes of
this Section 15(c), the current market value shall be determined
58
<PAGE> 62
in the manner set forth in Section 11(d) hereof for the Trading Day
immediately prior to the date of such exercise and, if such common stock
equivalent is not traded, each such common Stock equivalent shall have the
value of a share of Common Stock.
(d) Except as otherwise expressly provided herein, the
holder of a Right by the acceptance of the Rights expressly waives his right
to receive any fractional Rights or any fractional shares upon exercise of a
Right.
Section 16. Rights of Action.
----------------- All rights of action in
respect of this Agreement are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the
59
<PAGE> 63
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred by them in any action
to enforce the provisions of this Agreement.
Section 17. Agreement of Rights.
-------------------- Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent
if surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to
60
<PAGE> 64
the Distribution Date, the associated Common Stock certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 18. Rights Certificate Holder Not Deemed a
---------------------------------------
Shareholder.
- ------------ No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
shares of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in
Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights
61
<PAGE> 65
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions thereof.
Section 19. 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 reasonable
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 gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument
63
<PAGE> 66
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it, after proper inquiry or examination, to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 20. Merger or Consolidation or Change of Name of
--------------------------------------------
Rights Agent.
- ------------- Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 22 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such
63
<PAGE> 67
Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 21. Duties of Rights Agent.
----------------------- The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
64
<PAGE> 68
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person) be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the President, any Executive Vice President, the Treasurer, the Secretary or
any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
65
<PAGE> 69
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except as to the fact that it has
countersigned the Rights Certificates) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
in respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after
66
<PAGE> 70
actual notice of any such adjustment); nor shall it be responsible for any
determination by the Board of Directors of the Company of the current market
value of the Rights or Common Stock pursuant to the provisions of Section 15
hereof; nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common
Stock or other securities to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common stock or other
securities will, when so issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision hereof from the
Chairman of the Board, the President, any Executive Vice President, the
Secretary, any Assistant Secretary or the Treasurer of the Company, and is
67
<PAGE> 71
authorized 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 legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, omission, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company
or to the holders of the Rights resulting from any such act, omission, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
68
<PAGE> 72
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an affirmative
response to clause l and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company.
Section 22. Change of Rights Agent.
----------------------- The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and,
following the Distribution Date, to holders of the Rights 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
69
<PAGE> 73
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business under the laws
of the United States or of the States of Ohio, New York or New Jersey 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 States of Ohio, New York or New
Jersey, in good standing, having
70
<PAGE> 74
an office in the State of Ohio, the State of New York or the State of New
Jersey, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appoint- ment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and the transfer agent of
the Common Stock and, following the Distribution Date, mail a notice thereof
in writing to the registered holders of the Rights Certificates. Failure to
give any notice provided for in this Section 22, however, or any defect
therein, shall not affect the legality or
71
<PAGE> 75
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 23. Issuance of New Rights Certificates.
------------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Purchase Price per share and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement.
Section 24. Redemption and Termination.
---------------------------
(a) (i) The Board of Directors of the Company may,
at its option, at any time prior to the close of business on the earlier of
(x) the tenth Business Day after the Stock Acquisition Date or (y) the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per whole Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price").
72
<PAGE> 76
(ii) In addition, the Board of Directors of
the Company may redeem all but not less than all of the then outstanding
Rights at the Redemption Price following the tenth Business Day after the
Stock Acquisition Date but prior to any event described in Section 13(a)
following the occurrence of an event set forth in, and the expiration of any
period during which the holders of Rights may exercise the rights under,
Section 11(a)(ii) if and for as long as the Acquiring Person is not thereafter
the Beneficial Owner of 20% or more of the outstanding shares of Common Stock,
and at the time of redemption there are no other persons who are Acquiring
Persons.
(b) In the case of a redemption permitted under
Section 24(a)(i), immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights (notwithstanding any other provision of
this Agreement) shall be to receive the Redemption Price. In the case of a
redemption permitted only under Section 24(a)(ii), evidence of which shall
have been filed with the Rights Agent, the right to exercise the Rights will
terminate and represent
73
<PAGE> 77
only the right to receive the Redemption Price only upon the later of (A) ten
Business Days following the giving of notice of such redemption to the holders
of such Rights and (B) the expiration of any period during which the rights
under section 11(a)(ii) may be exercised. Within ten days after the action of
the Board of Directors ordering any such redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to the Rights Agent and 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.
Notwithstanding the foregoing, the Company may, at its option,
discharge all of its obligations with respect to the Rights by (i) issuing a
press release announcing the manner of redemption of the Rights and (ii)
mailing payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of the
Rights
74
<PAGE> 78
Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock, and upon such action, all outstanding
Rights and Rights Certificates shall be null and void without any further
action by the Company.
Section 25. Notice of Certain Events.
------------------------- In case the Company
shall propose, at any time after the Distribution Date,(a) to pay any dividend
payable in stock of any class to the holders of Common Stock or to make any
other distribution to the holders of Common Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company)
or (b) to offer to the holders of Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock of
any class or any other securities, rights or options, or (c) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common 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 or more transactions, of more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) to,
any other Person, or (e) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the
75
<PAGE> 79
Company shall give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Common
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least 20 days
prior to the record date for determining holders of the shares of Common Stock
for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Common Stock
whichever shall be the earlier.
In case an event giving rise to the rights under Section
11(a)(ii) of this Agreement shall occur, then, in any such case, the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing Common Stock), in accordance with Section 26 hereof,
a notice of
76
<PAGE> 80
the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices.
-------- Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Ohio Casualty Corporation
136 North Third Street
Hamilton, Ohio 45025
Attention: President
Subject to the provisions of Section 22, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate (or, prior to the Distribution Date, the holder of any
Common Stock certificate) to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
First Chicago Trust Company of New York
Suite 4660
525 Washington Blvd.
Jersey City, New Jersey 07310
Attention: Tenders and Exchanges Administration
77
<PAGE> 81
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments.
--------------------------- The Company and the
Rights Agent may from time to time supplement or amend this Agreement without
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) prior to the
Distribution Date, to change or supplement the provisions hereunder which the
Company may deem necessary or desirable or (iv) following the Distribution
Date, to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). Without limiting
the foregoing, the Company may, at any time prior to such time as any Person
becomes an Acquiring Person, amend this Agreement to lower the threshold set
forth in
78
<PAGE> 82
Section 1(a) hereof from 20% to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding shares of
Common Stock then known by the Company to be beneficially owned by any Person
(other than the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any of its subsidiaries, any entity holding Common
Stock of the Company organized, appointed or established by the Company or any
of its subsidiaries for or pursuant to the terms of any such plan or any other
Person who is exempted from being an Acquiring Person) and (ii) 10%. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good faith that
such supplement or amendment would adversely affect its interests under this
Agreement. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Determination and Actions by the Board of
-----------------------------------------
Directors, etc.
- --------------- For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the
79
<PAGE> 83
particular percentage of such outstanding shares of Common Stock or any other
securities of which any Person is the Beneficial Owner, shall be made (except
as otherwise provided in this Agreement) in accordance with the last sentence
of Rule 13d-3(d)(l)(i) of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement. The Board of Directors of the
Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or the Company, or as may be necessary or advisable in the administra-
tion of this Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and the Rights Certificates and all other
parties, and (y) not
80
<PAGE> 84
subject the Board to any liability to the holders of the Rights or the Rights
Certificates.
Section 29. 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 30. Benefits of this Agreement.
--------------------------- Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock).
Section 31. Severability.
------------- If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
81
<PAGE> 85
Section 32. Governing Law.
-------------- This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Ohio and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and to be performed entirely within such State.
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<PAGE> 86
Section 33. Counterparts.
------------- This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings.
--------------------- Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
Attest: OHIO CASUALTY CORPORATION
/s/ Howard L. Sloneker III By /s/ Lauren N. Patch
- ----------------------------- ---------------------------
Name: Howard L. Sloneker III Name: Lauren N. Patch
Title: Secretary Title: President and Chief
Executive Officer
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
/s/ David Cohn By /s/ Joanne Gorostiola
- ------------------------------ ---------------------------
Name: David Cohn Name: Joanne Gorostiola
Title: Operations Officer Title: Assistant Vice President
83
<PAGE> 87
Exhibit A
---------
[Form of Rights Certificate]
Certificate No. R- Rights
--------
NOT EXERCISABLE AFTER DECEMBER 15, 2009, OR
EARLIER IF NOTICE OF REDEMPTION IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT (SUBJECT TO
ADJUSTMENT) ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE WERE ISSUED TO A PERSON WHO
WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE MAY BECOME VOID TO THE
EXTENT PROVIDED BY, AND UNDER CERTAIN
CIRCUMSTANCES AS SPECIFIED IN, SECTION 7(e) OF
THE RIGHTS AGREEMENT.]*
Rights Certificate
Ohio Casualty Corporation
This certifies that , or registered
-------------------------
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement dated as of
February 19, 1998 (the "Rights Agreement"), between Ohio Casualty Corporation,
an Ohio corporation (the "Company"), and First Chicago Trust Company of New
York, as Rights Agent (the "Rights Agent"), to purchase from
- --------------------------
*The portion of the legend in brackets shall be inserted only if applicable.
A-1
<PAGE> 88
the Company at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 p.m. New York City, New York time
on December 15, 2009, at the office of the Rights Agent in New York City, New
York, one fully paid, non-assessable common share, par value Twelve and One-
Half Cents ($ .125) per share (the "Common Stock"), of the Company, at a
purchase price of $250.00 per share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the appropriate Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of February 19, 1998, based on the Common Stock
as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Common Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain events.
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
A-2
<PAGE> 89
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. Copies of the Rights
Agreement are on file at the principal office of the Company, and the Company
will mail to the holder a copy of the Rights Agreement within five days of a
written request therefor.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the Rights Agent, may
be exercised for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock or other securities 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 (other than pursuant to Section 11(a)(ii) of the Rights Agreement)
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. If this Rights Certificate shall be exercised in whole or in part
pursuant to Section 11(a)(ii) of the Rights Agreement, the holder shall be
entitled to receive this Rights
A-3
<PAGE> 90
Certificate duly marked to indicate that such exercise has occurred as set
forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $0.01 per Right (subject to adjustment in accordance
with the Rights Agreement). Subject to the provisions of the Rights
Agreement, the Company, at its option, may elect to mail payment of the
redemption price of $0.01 per Right (subject to adjustment) to the registered
holder of the Right at the time of redemption, in which event this Certificate
shall become void without any further action by the Company.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the
A-4
<PAGE> 91
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement),
or to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company. Dated as of .
---------------
ATTEST: OHIO CASUALTY CORPORATION
By
Name: Name:
Title: Title:
Countersigned:
[Rights Agent]
Name:
Title:
A-5
<PAGE> 92
[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 sell, assigns and transfers unto
---------------------------------
- -------------------------------------------------------------------------
(Please print name and address of transferee)
- -------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
-------------------------
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 19
------------------- ---
-------------------------
Signature
Signature Guaranteed:
A-6
<PAGE> 93
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 19
------------------ --- ------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment 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.
A-7
<PAGE> 94
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the
Rights Certificate pursuant to Section 11(a)(ii)
of the Rights Agreement.)
To OHIO CASUALTY CORPORATION:
The undersigned hereby irrevocably elects to exercise
- ------------
Rights represented by this Rights Certificate to purchase the
shares of Common Stock (or such other securities of the Company) issuable upon
the exercise of the 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)
- ------------------------------------------------------------------------------
The Rights Certificate indicating the balance, if any, of such
Rights which may still be exercised pursuant to Section 11(a)(ii) of the
Rights Agreement shall be returned to the undersigned unless such person
requests that the Rights Certificate be registered in the name of and
delivered to:
- ------------------------------------------------------------------------------
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered
in a name other than the undersigned)
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
A-8
<PAGE> 95
Dated: , 19
-------------------- ---
---------------------------
Signature
Signature Guaranteed:
A-9
<PAGE> 96
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 19 --------------------------
------------ --- Signature
A-10
<PAGE> 97
NOTICE
------
The signature to the foregoing Election to Purchase 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.
A-11
<PAGE> 98
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the
Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To OHIO CASUALTY CORPORATION:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the
- --------------
shares of Common Stock (or such other securities of the Company) issuable upon
the exercise of the 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)
- ------------------------------------------------------------------------------
The Rights Certificate indicating the balance, if any, of
such Rights which may still be exercised pursuant to Section 11(a)(ii) of the
Rights Agreement shall be returned to the undersigned unless such person
requests that the Rights Certificate be registered in the name of and
delivered to:
- ------------------------------------------------------------------------------
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered
in a name other than the undersigned)
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
A-12
<PAGE> 99
Dated: , 19
----------------- ---
---------------------------
Signature
Signature Guaranteed:
A-13
<PAGE> 100
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 19 -------------------------
--------------- --- Signature
NOTICE
------
The signature to the foregoing Election to Purchase 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.
A-14
<PAGE> 101
Exhibit B
---------
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 15, 1989, the Board of Directors of Ohio Casualty
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding common share, par value twelve and one-half cents ($0.125)
per share (the "Common Stock"), of the Company to shareholders of record at
the close of business on December 29, 1989 (the "Record Date"). Each Right,
when exercisable, entitles the registered holder to purchase from the Company
one share of Common Stock at the Purchase Price per share, subject to
adjustment. In connection with a two-for-one stock split distributed to
shareholders on or about April 22, 1994, the Purchase Price of each whole
Right was reduced from $150 per share to $75 per share and the number of
Rights associated with each outstanding share of Common Stock was reduced from
one Right to one-half (1/2) of one Right. The Rights were issued upon the
terms and subject to the conditions set forth in a Rights Agreement, dated as
of December 15, 1989, as amended and supplemented on February 20, 1990,
October 17, 1990, April 1, 1994 and June 8, 1995, between the Company and
First Chicago Trust Company of New York (the "Rights Agent")(as successor
rights agent to Mellon Bank, N.A.) (the "Prior Rights Agreement").
On February 19, 1998, the Board of Directors of the Company
adopted amendments to the Prior Rights Agreement, which are incorporated in an
Amended and Restated Rights Agreement (the "Rights Agreement") dated as of
February 19, 1998, between the Company and the Rights Agent, which supersedes
the Prior Rights Agreement. The following summary of the Rights is qualified
in its entirety by reference to the Rights Agreement.
As of the date of this Summary, there is associated with each
outstanding share of Common Stock one-half of one Right. Except as set forth
below, each whole Right, when exercisable, entitles the registered holder to
purchase from the Company one share of Common Stock at a price of $250.00 per
share, subject to adjustment.
B-1
<PAGE> 102
The Rights (or fractional Rights) are attached to all Common
Stock certificates representing outstanding shares, and no separate Right
certificates have been distributed. Until the earlier to occur of (i) the
close of business on the tenth Business Day after the first date of a public
announcement (the "Stock Acquisition Date") that, without the prior approval
of the Company's Board of Directors, a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock of the Company or (ii) the close of business on the tenth
Business Day (or such later date and time as may be determined by action of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the commencement of (or a public announcement of an intention to
make) a tender offer or exchange offer which would result in any person or
group of related persons becoming an Acquiring Person (the earlier of (i) and
(ii) above being called the "Distribution Date"), the Rights will be evidenced
by the Common Stock certificates and not by separate Right certificates.
The following persons are excluded from the definition of
Acquiring Person: the Company or any subsidiary of the Company, any employee
benefit plan of the Company or any subsidiary or any entity holding shares of
Common Stock organized, appointed or established by the Company or any
subsidiary for or pursuant to any such plan, and Joseph L. Marcum and any
Affiliate or Associate of Joseph L. Marcum. No person shall become an
Acquiring Person as the result of an acquisition of Common Stock by the
Company or as a result of having received Common Stock through a gift,
bequest, inheritance or by operation of law upon the death of an individual;
provided, however, that if a Person becomes the beneficial owner of 20% or
more of the shares of Common Stock of the Company by reason of shares
purchased by the Company or any such gift, bequest or inheritance and, after
such time, becomes the beneficial owner of additional shares while such Person
is a beneficial owner of 20% or more of the shares of Common Stock then
outstanding, then such person will be deemed to be an Acquiring Person (unless
such acquisition has been approved by the Board of Directors). The Rights
Agreement provides that, in the event a person shall become an Acquiring
Person inadvertently, and such person divests as promptly as practicable a
sufficient number of shares so that such person would no longer be an
Acquiring Person, then such person shall not be deemed an Acquiring Person.
The Rights Plan also provides that neither
B-2
<PAGE> 103
First Financial Bancorp., Hamilton, Ohio, nor any officer, director, employee,
Affiliate or Associate of First National Bancorp. shall be deemed for purposes
of the Rights Agreement a beneficial owner of Common Stock which is held by
First Financial Bancorp. or its Affiliates in a fiduciary or custodial
capacity, other than shares as to which any such excluded person has an actual
ownership interest.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with Common Stock
certificates. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued upon transfer
or new issuance of the Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Stock (with or without a Summary of Rights attached)
will also constitute the transfer of the Rights (or fractional Rights)
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of record of the
Common Stock as of the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on the earlier of (i) December 15, 2009, or (ii) the
date of redemption by the Company as described below.
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and
preferences as the Common Stock at less than the current market price of the
Common Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash divi-
dends out of earnings or retained earnings and dividends payable in Common
Stock) or of subscription rights or warrants (other than those referred to
above). In addition to or in lieu of any
B-3
<PAGE> 104
such adjustments, the Board of Directors has the authority to make such
adjustments to the exercise price of the Rights, the number of shares of
Common Stock eligible for purchase on exercise of each Right or the number of
Rights outstanding as it deems appropriate in the circumstances and not
inconsistent with the objectives of the Board in adopting the Rights
Agreement.
In the event that, following the Stock Acquisition Date, the
Company is involved in a merger or consolidation (other than a merger or
consolidation which would result in all of the voting power represented by the
securities of the Company outstanding prior thereto continuing to represent
all of the voting power of the surviving company and the holders of such
securities not having changed as a result thereof), or 50% or more of the
assets or earning power of the Company and its subsidiaries are sold (in one
transaction or a series of transactions), proper provision shall be made so
that each holder of a whole Right shall thereafter have the right to receive
(unless the Rights have been redeemed as described below) upon the exercise
thereof at the then-current exercise price of the whole Right, that number of
shares of common stock of the acquiring company (or, in the event there is
more than one acquiring company, the acquiring company receiving the greatest
portion of the assets or earning power transferred) which at the time of such
transaction would have a market value of two times the exercise price of the
Right (such right being called the "Merger Right").
In the event that a person becomes an Acquiring Person, proper
provision shall be made so that each holder of a whole Right will, for a 60-
day period commencing on the eleventh Business Day after the Stock Acquisition
Date (or for a period of 60 days following the effective date of the relevant
registration statement), have the right to receive (unless the Rights have
been redeemed as described below) upon exercise thereof at the then-current
exercise price of the Right that number of shares of Common Stock of the
Company having a market value of two times the exercise price of the Right, to
the extent sufficient shares are legally available therefor, and then (after
all legally available shares of Common Stock have been issued) a common stock
equivalent (such as preferred stock, if then authorized and legally available
therefor, or another equity security with at least the same economic value as
the common), having a market value of two times the exercise price of the
Right, with Common Stock to the extent available being issued first (such
right
B-4
<PAGE> 105
being called the "Subscription Right"). If the Company is unable to cause
sufficient shares of Common Stock and/or common stock equivalents to be
available for issuance upon exercise of the Rights, each Right shall
thereafter represent the right to receive an adjusted number of shares of
Common Stock and/or common stock equivalents at an adjusted purchase price,
such adjustments to be made in accordance with the Rights Agreement. The
holder of a Right will continue to have the Merger Right whether or not such
holder exercises the Subscription Right.
Upon the occurrence of any of the events giving rise to the
exercisability of the Subscription Right or the Merger Right, any Rights
(including fractional Rights) that are or were beneficially owned by an
Acquiring Person on or after the earlier of the Distribution Date or the Stock
Acquisition Date shall become void insofar as they relate to the Subscription
Right or the Merger Right and any holder of such Rights will have no right to
exercise such Rights insofar as they relate to the Subscription Right or the
Merger Right.
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractions of shares will be issued and,
in lieu thereof, an adjustment in cash will be made based on the market price
of the Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) the close of
business on the tenth Business Day after the Stock Acquisition Date or (ii)
the close of business on the date of expiration of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of $0.01 per whole
Right, subject to adjustment (the "Redemption Price"), which redemption shall
be effective upon the action of the Board of Directors of the Company.
Additionally, the Company may thereafter redeem the then-outstanding Rights in
whole, but not in part, at the Redemption Price following an event giving rise
to, and the expiration of the exercise period for, the Subscription Right if
and for as long as no person beneficially owns 20% or more of the outstanding
shares of Common Stock of the Company. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
B-5
<PAGE> 106
The terms of the Rights may be amended by the Company and the
Rights Agent without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 20% to
not less than the greater of (i) any percentage greater than the largest
percentage of the outstanding shares of Common Stock then known to the Company
to be beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%, except that from and after the Distribution Date, no
such amendment may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission (the "Commission") as an Exhibit to a
Current Report on Form 8-K. A copy of the Rights Agreement is are available
free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement and all amendments and supplements thereto, which
documents are incorporated herein by reference.
B-6
