SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Gleason Corporation
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(Exact name of registrant as specified in its charter)
Delaware 16-1224655
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1000 University Avenue
Rochester, New York 14692
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so registered Name of each exchange on which
- --------------------------------------- each class is to be registered
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Preferred Stock Purchase Rights New York Stock Exchange
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box. [ X ]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. [ ]
Securities Act registration statement file number to which this form relates:
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(If applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Item 1. Description of Securities to be Registered.
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On May 4, 1999, the Board of Directors of Gleason Corporation (the
"Company") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of Common Stock, par value
$1.00 per share (the "Common Shares"), of the Company. The dividend is
payable to the stockholders of record on June 15, 1999 (the "Record Date"),
and with respect to Common Shares issued thereafter until the Distribution
Date (as defined below) and, in certain circumstances, with respect to
Common Shares issued after the Distribution Date. Except as set forth
below, each Right, when it becomes exercisable, entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series
B Junior Participating Preferred Stock, $1.00 par value per share (the
"Preferred Shares"), of the Company at a price of $70.00 per one
one-thousandth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights
Agent"), dated as of May 4, 1999.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Shares upon the earliest to occur of (i) a person or group of affiliated or
associated persons having acquired beneficial ownership of 15% or more of
the outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later date as the Board may
determine) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would
result in a person or group becoming an Acquiring Person (as hereinafter
defined) (the earliest of such dates being called the "Distribution Date").
A person or group whose acquisition of Common Shares causes a Distribution
Date pursuant to clause (i) above is an "Acquiring Person." The Rights
Agreement excludes the Gleason Foundation (formerly known as the Gleason
Memorial Fund, Inc.) from being an Acquiring Person unless the Foundation
becomes the beneficial owner of 20% or more of the outstanding Common
Shares. For purposes of determining an Acquiring Person, securities held by
a Company Person (as such term is defined in the Rights Agreement) shall
not be aggregated with the securities of the Company otherwise beneficially
owned by any trustee, director or officer of any such Company Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights) new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date (and to
each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on June 12, 2009, unless earlier redeemed
by the Company as described below.
In the event that any person becomes an Acquiring Person or an
affiliate or associate thereof (except pursuant to a tender or exchange
offer which is for all outstanding Common Shares at a price and on terms
which a majority of certain members of the Board of Directors determines to
be adequate and in the best interests of the Company, its stockholders and
other relevant constituencies, other than such Acquiring Person, its
affiliates and associates (a "Permitted Offer")), each holder of a Right
will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of Common Shares or of one one-thousandth of a share of
Preferred Shares (or, in certain circumstances, other securities of the
Company) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of the event described above, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date
(as such term is defined in the Rights Agreement), (i) the Company is
acquired in a merger or other business combination transaction in which the
holders of all of the outstanding Common Shares immediately prior to the
consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the Company's assets
or earning power is sold or transferred, in either case with or to an
Acquiring Person or any affiliate or associate or any other person in which
such Acquiring Person, affiliate or associate has an interest or any person
acting on behalf of or in concert with such Acquiring Person, affiliate or
associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have
the right (the "Flip-Over Right") to receive, upon exercise, common shares
of the acquiring company (or in certain circumstances, its parent) having a
value equal to two times the exercise price of the Right. The holder of a
Right will continue to have the Flip-Over Right whether or not such holder
exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible into
Preferred Shares with a conversion price, less than the then current market
price of the Preferred Shares or (iii) upon the distribution to holders of
the Preferred Shares of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 1,000 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to the greater of (i) a minimum
preferential liquidation payment of $1,000 per share and (ii) an aggregate
payment per share of at least 1,000 times the aggregate payment made per
Common Share. These rights are protected by customary antidilution
provisions. In the event that the amount of accrued and unpaid dividends on
the Preferred Shares is equivalent to six full quarterly dividends or more,
the holders of the Preferred Shares shall have the right, voting as a
class, to elect two directors in addition to the directors elected by the
holders of the Common Shares until all cumulative dividends on the
Preferred Shares have been paid through the last quarterly dividend payment
date or until non-cumulative dividends have been paid regularly for at
least one year.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional Preferred Shares will be issued
(other than fractions which are one one-thousandth or integral multiples of
one one-thousandth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain
other circumstances, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price") which
redemption shall be effective upon the action of the Board of Directors.
Additionally, following the Shares Acquisition Date, the Company may redeem
the then outstanding Rights in whole, but not in part, at the Redemption
Price, provided that such redemption is in connection with a merger or
other business combination transaction or series of transactions involving
the Company in which all holders of Common Shares are treated alike but not
involving an Acquiring Person or its affiliates or associates. The payment
of the Redemption Price may be deferred under certain circumstances as
contemplated in the Rights Agreement.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board of Directors in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person), or,
subject to certain limitations, to shorten or lengthen any time period
under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders of the Company, stockholders may,
depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events
thereafter.
Item 2. Exhibits.
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Listed below are all Exhibits filed as a part of this
registration statement.
1 Rights Agreement (the "Rights Agreement") dated as of
May 4, 1999 between Gleason Corporation and ChaseMellon
Shareholder Services, L.L.C. which includes, as Exhibit
A thereto, the form of Certificate of Designation
specifying the terms of the Preferred Stock and, as
Exhibit B thereto, the form of Rights Certificate.
Pursuant to the Rights Agreement, Rights Certificates
will not be mailed until a person acquires beneficial
ownership of 15% or more of the Common Shares or 10
days (or such later date as the Board of Directors of
the Company may determine) after a person commences or
announces its intention to commence an offer if, upon
consummation thereof, such person would become an
Acquiring Person (as defined in the Rights Agreement)
or prior to certain transactions involving the Company.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized.
GLEASON CORPORATION
By: /s/ Edward J. Pelta
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Name: Edward J. Pelta
Title: Vice President, General
Counsel & Secretary
Date: May 18, 1999
EXHIBIT INDEX
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Exhibit Description
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1 Rights Agreement (the "Rights Agreement") dated as of May 4,
1999 between Gleason Corporation and ChaseMellon Shareholder
Services, L.L.C. which includes, as Exhibit A thereto, the
form of Certificate of Designation specifying the terms of
the Preferred Stock and, as Exhibit B thereto, the form of
Rights Certificate. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until a person acquires
beneficial ownership of 15% or more of the Common Shares or
10 days (or such later date as the Board of Directors of the
Company may determine) after a person commences or announces
its intention to commence an offer if, upon consummation
thereof, such person would become an Acquiring Person (as
defined in the Rights Agreement) or prior to certain
transactions involving the Company.
EXHIBIT 1
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GLEASON CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
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Rights Agreement
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Dated as of May 4, 1999
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<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issuance of Right Certificates....................................5
Section 4. Form of Right Certificate.........................................8
Section 5. Countersignature and Registration.................................8
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificate.......................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....10
Section 8. Cancellation and Destruction of Right Certificates...............12
Section 9. Reservation and Availability of Preferred Shares.................13
Section 10. Preferred Shares Record Date.....................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights........................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power............................................................22
Section 14. Fractional Rights and Fractional Shares..........................25
Section 15. Rights of Action.................................................26
Section 16. Agreement of Right Holders.......................................27
Section 17. Right Certificate Holder Not Deemed a Stockholder................27
Section 18. Concerning the Rights Agent......................................28
Section 19. Merger or Consolidation or Change of Name of Rights Agent........29
Section 20. Duties of Rights Agent...........................................29
Section 21. Change of Rights Agent...........................................32
Section 22. Issuance of New Right Certificates...............................33
Section 23. Redemption and Termination.......................................33
Section 24. Exchange.........................................................35
Section 25. Notice of Certain Events.........................................36
Section 26. Notices..........................................................37
Section 27. Supplements and Amendments.......................................37
Section 28. Determination and Actions by the Board of Directors, etc.........38
Section 29. Successors.......................................................40
Section 30. Benefits of this Agreement.......................................40
Section 31. Severability.....................................................39
Section 32. Governing Law....................................................39
Section 33. Counterparts.....................................................39
Section 34. Descriptive Headings.............................................39
Signatures .................................................................40
- i -
<PAGE>
Exhibit A - Certificate of Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock of Gleason Corporation
Exhibit B - Form of Right Certificate
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<PAGE>
Defined Term Cross Reference Sheet
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TERM LOCATION
- ---- --------
Acquiring Person..................................................Section 1(a)
Act...............................................................Section 1(b)
Adjusted Number of Shares...................................Section 11(a)(iii)
Adjusted Purchase Price.....................................Section 11(a)(iii)
Adjustment Shares............................................Section 11(a)(ii)
Affiliate.........................................................Section 1(c)
Agreement.............................................................preamble
Associate.........................................................Section 1(c)
Beneficial Owner..................................................Section 1(d)
Beneficially Own..................................................Section 1(d)
Business Day......................................................Section 1(e)
capital stock equivalent....................................Section 11(a)(iii)
Close of Business.................................................Section 1(f)
Common Shares.....................................................Section 1(g)
Company...............................................................preamble
Company Person....................................................Section 1(a)
current per share market price...................................Section 11(d)
Distribution Date...................................Section 3(a). Section 1(h)
Documents...........................................................Section 18
equivalent preferred shares......................................Section 11(b)
Exchange Act......................................................Section 1(c)
Exchange Ratio......................................................Section 24
Final Expiration Date...............................Section 7(a). Section 1(i)
Interested Stockholder............................................Section 1(j)
NASDAQ...........................................................Section 11(d)
Permitted Offer...................................................Section 1(k)
Person............................................................Section 1(l)
Preferred Shares..................................................Section 1(m)
Principal Party..................................................Section 13(b)
Proration Factor............................................Section 11(a)(iii)
Purchase Price....................................................Section 4(a)
Record Date...........................................................recitals
Redemption Date.....................................Section 7(a). Section 1(n)
Redemption Price..............................................Section 23(a)(i)
Right.................................................................recitals
Right Certificate.................................................Section 3(a)
Rights................................................................preamble
- iii -
<PAGE>
Rights Agreement..................................................Section 3(c)
Section 13 Event..................................................Section 1(p)
Section 11(a)(ii) Event...........................................Section 1(o)
Security.........................................................Section 11(d)
Shares Acquisition Date...........................................Section 1(q)
Subsidiary........................................................Section 1(r)
Summary of Rights.................................................Section 3(b)
then outstanding.............................................Section 1(d)(iii)
Trading Day......................................................Section 11(d)
Triggering Event..................................................Section 1(s)
voting securities................................................Section 13(a)
- ii-
<PAGE>
RIGHTS AGREEMENT
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THIS RIGHTS AGREEMENT, dated as of May 4, 1999 (this "Agreement"),
between Gleason Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company as Rights Agent (the "Rights Agent"), will become effective as of
the close of business on June 15, 1999.
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding at the close of
business on June 15, 1999 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date (as such terms are hereinafter defined);
provided, however, that Rights may be issued with respect to Common Shares
that shall become outstanding after the Distribution Date and prior to the
earlier of the Redemption Date and the Final Expiration Date in accordance
with the provisions of Section 22 of this Agreement.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the then outstanding Common Shares
(other than as a result of a Permitted Offer (as hereinafter defined)) or
was such a Beneficial Owner at any time after the date hereof, whether or
not such person continues to be the Beneficial Owner of 15% or more of the
then outstanding Common Shares. Notwithstanding the foregoing, (A) the term
"Acquiring Person" shall not include (i) the Company, (ii) any Subsidiary
of the Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company, (iv) any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan
(the Persons described in clauses (i) through (iv) are collectively
referred to as the "Company Persons"), and any securities of the Company
Beneficially Owned by any Company Person shall not be aggregated with the
securities of the Company otherwise Beneficially Owned by any other Person
for the purpose of determining whether such other Person is an Acquiring
Person, (v) any Person, who or which together with all Affiliates and
Associates of such Person becomes the Beneficial Owner of 15% or more of
the then outstanding Common Shares as a result of the acquisition of Common
Shares directly from the Company or (vi) the Gleason Foundation (formerly
known as the Gleason Memorial Fund, Inc.); provided, however, that the term
Acquiring Person shall include the Gleason Foundation if it becomes the
Beneficial Owner of 20% or more of the outstanding Common Shares (other
than as a result of a Permitted Offer), and (B) no Person shall be deemed
to be an "Acquiring Person" either (X) as a result of the acquisition of
Common Shares by the Company which, by reducing the number of Common Shares
outstanding, increases the proportional number of shares Beneficially Owned
by such Person together with all Affiliates and Associates of such Person;
except that if (i) a Person would become an Acquiring Person (but for the
operation of this subclause X) as a result of the acquisition of Common
Shares by the Company, and (ii) after such share acquisition by the
Company, such Person, or an Affiliate or Associate of such Person, becomes
the Beneficial Owner of any additional Common Shares, then such Person
shall be deemed an Acquiring Person, or (Y) if a Person did so
inadvertently, (i) promptly after such Person discovers that such Person
would otherwise have become an Acquiring Person (but for the operation of
this subclause Y), such Person notifies the Board of Directors that such
Person did so inadvertently and (ii) within 2 days after such notification,
such Person is the Beneficial Owner of less than 15% of the outstanding
Common Shares.
(b) "Act" shall mean the Securities Act of 1933, as amended and
as in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act"). Notwithstanding
anything in this definition of Affiliate and Associate to the contrary, the
Gleason Foundation shall not be considered an Affiliate or Associate of any
of its directors or officers, and no director or officer of the Gleason
Foundation shall be considered an Affiliate or Associate of it.
(d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to Beneficially Own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are Beneficially Owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) relating to the acquisition,
holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, (i) a Person who is a trustee, director, officer or other
fiduciary of any Company Person shall not be deemed to be the Beneficial
Owner of any securities of the Company Beneficially Owned by any such
Company Person and (ii) no director or officer of the Gleason Foundation
shall be deemed the Beneficial Owner of or to beneficially own any
securities of the Company Beneficially Owned by the Gleason Foundation.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or U.S. federal holiday.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of Common Stock, par value $1.00 per share, of the Company
or, in the event of a subdivision, combination or consolidation with
respect to such shares of Common Stock, the shares of Common Stock
resulting from such subdivision, combination or consolidation. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(j) "Interested Stockholder" shall mean any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or any other Person in
which any such Acquiring Person, Affiliate or Associate has an interest, or
any other Person acting directly or indirectly on behalf of or in concert
with any such Acquiring Person, Affiliate or Associate.
(k) "Permitted Offer" shall mean a tender or exchange offer which
is for all outstanding Common Shares at a price and on terms determined,
prior to the purchase of shares under such tender or exchange offer, by at
least a majority of the members of the Board of Directors who are not
officers of the Company and who are not Acquiring Persons or Persons who
would become Acquiring Persons as a result of the offer in question or
Affiliates, Associates, nominees or representatives of any such Person, to
be adequate (taking into account all factors that such Directors deem
relevant including, without limitation, prices that could reasonably be
achieved if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and otherwise in the best interests of
the Company and its stockholders (other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is being made) taking into
account all factors that such directors may deem relevant.
(l) "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust, association, joint venture
or other entity, and shall include any successor (by merger or otherwise)
of such entity.
(m) "Preferred Shares" shall mean shares of Series B Junior
Participating Preferred Stock, with a par value of $1.00 per share of the
Company, having the relative rights, preferences and limitations set forth
in the Certificate of Designation, Preferences and Rights attached to this
Agreement as Exhibit A.
(n) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(o) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(q) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such;
provided, that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a)(B)(Y) hereof, then no Shares
Acquisition Date shall be deemed to have occurred.
(r) "Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(s) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company 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. The Rights Agent shall have
no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates. (a) Until the earlier of
(i) the Shares Acquisition Date or (ii) the Close of Business on the tenth
day (or such later date as may be determined by action of the Board of
Directors of the Company) after the date of the commencement by any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any Person or entity organized, appointed
or established by the Company 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 the
consummation of which would result in any Person becoming an Acquiring
Person (including, in the case of both (i) and (ii), any such date which is
after the date of this Agreement and prior to the issuance of the Rights),
the earlier of such dates being herein referred to as the "Distribution
Date," (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares registered in
the names of the holders thereof (which certificates shall also be deemed
to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Company); provided, however, that if a tender offer is
terminated prior to the occurrence of a Distribution Date, then no
Distribution Date shall occur as a result of such tender offer. As soon as
practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
Right Certificate, substantially in the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of
and after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with
such Common Shares. As a result of the execution of this Agreement as of
May 4, 1999, each share of Common Stock outstanding as of the Close of
Business on June 15, 1999, shall, subject to the terms and conditions of
this Agreement, also represent one Right and shall, subject to the terms
and conditions of this Agreement, represent the right to purchase one
one-thousandth of a share of Preferred Stock.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Gleason
Corporation and ChaseMellon Shareholder Services, L.L.C. as Rights
Agent dated as of May 4, 1999 (the "Rights Agreement") and
effective as of June 15, 1999, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of Gleason Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Gleason Corporation will
mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and certain related persons,
whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void and no longer
transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder
of the Rights.
Section 4. Form of Right Certificate. (a) The Right Certificates (and
the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate (which do not affect the duties or responsibilities of the
Rights Agent) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law 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
22 hereof, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a Preferred Share as shall
be set forth therein at the price per one one-thousandth of a Preferred
Share set forth therein (the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void pursuant
to Section 7(e) of this Agreement and any Right Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented hereby are null and
void and no longer transferable.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Right
Certificate. The Company shall notify the Rights Agent to the extent that
this Section 4(b) applies.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board,
its Chief Executive Officer, its President, any of its Vice Presidents, or
its Treasurer, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates may nevertheless 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 Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such Person was not
such an officer.
Following the Distribution Date and receipt by the Rights Agent of a
list of record holders of Rights, the Rights Agent will keep or cause to be
kept, at its office or offices designated as the appropriate place for
surrender of such Right Certificate or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the certificate number and the date of each of the
Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificate.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a Preferred
Share (or, following a Triggering Event, other securities, as the case may
be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate until the registered holder shall
have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Company or the Rights Agent shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or charge that may be
imposed in connection with any transfer, split up, combination or exchange
of Right Certificates. If the Company requires the payment referred to in
the immediately preceding sentence, then the Rights Agent shall not be
required to process any transaction until it receives written notice from
the Company that the Company has received such payment.
Upon receipt by the Company and the Rights Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of indemnity
or security satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of one one-thousandths of a Preferred
Share (or other securities, as the case may be) as to which such
surrendered Rights are exercised, at or prior to the earliest of (i) the
Close of Business on June 12, 2009 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"); (iii) the time at which the Rights are exchanged as
provided in Section 24 hereof, or (iv) the consummation of a transaction
contemplated by Section 13(d) hereof.
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $70.00, shall
be subject to adjustment from time to time as provided in the next sentence
and in Sections 11 and 13(a) hereof and shall be payable in accordance with
paragraph (c) below. Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares or (ii)
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case, each Common Share outstanding following such subdivision, combination
or consolidation shall continue to have one Right associated therewith and
the Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase Price
immediately prior to such event by a fraction the numerator of which shall
be the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of Common Shares outstanding immediately following the occurrence of
such event. The adjustment provided for in the preceding sentence shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly and
properly executed, accompanied by payment of the Purchase Price for the
Preferred Shares (or other securities, as the case may be) to be purchased
and an amount equal to any applicable tax or charge required to be paid by
the holder of such Right Certificate in accordance with Section 6 hereof by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if
the Company, in its sole discretion, shall have elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a Preferred Share as are
to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to
comply with such requests, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, and
(iv) when appropriate, after receipt thereof, deliver such cash to or upon
the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities (including Common
Shares) of the Company pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities are available
for distribution by the Rights Agent, if and when necessary to comply with
this Agreement.
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 Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
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
Right Certificate were so exercised, the Rights Agent shall indicate on the
Right 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 Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 6 and Section 14 hereof, or the Rights Agent shall
place an appropriate notation on the Right Certificate with respect to
those Rights exercised.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
Beneficially Owned by (i) an Acquiring Person or an Affiliate or Associate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has a
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is part of an agreement, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise.
The Company shall notify the Rights Agent in writing when this Section 7(e)
applies and the Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with,
but neither the Company nor the Rights Agent shall have any liability to
any holder of Right Certificates or other Person as a result of the
Company's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares. The
Company covenants and agrees that at all times prior to the occurrence of a
Section 11(a)(ii) Event it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares, or any authorized and
issued Preferred Shares held in its treasury, the number of Preferred
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of a Section 11(a)(ii) Event,
shall, to the extent reasonably practicable, so reserve and keep available
a sufficient number of Common Shares (and/or other securities) which may be
required to permit the exercise in full of the Rights pursuant to this
Agreement.
So long as the Preferred Shares (and, after the occurrence of a
Section 11(a)(ii) Event, Common Shares or any other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares (or Common Shares
and/or other securities, as the case may be) 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 non-assessable shares or
securities.
The Company further covenants and agrees that it will pay when due and
payable any and all taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any Preferred
Shares (or Common Shares and/or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be required to pay
any tax or other charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) in a name
other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or to deliver any
certificates or depositary receipts for Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of any
Rights, until any such tax or other charge shall have been paid (any such
tax or other charge being payable by the holder of such Right Certificate
at the time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax or other charge 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 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). The Company will also take such action as may be
appropriate under the Blue Sky laws of the various states.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares (or Common Shares and/or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable taxes and
charges) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company
are closed, such person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
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) In the event any Person, 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
below and in Section 7(e) hereof) shall, for a period of 60 days after the
later of the occurrence of any such event or the effective date of an
appropriate registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price, in accordance with the terms of this
Agreement, such number of Common Shares (or, in the discretion of the Board
of Directors, one one-thousandths of a Preferred Share) as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths of a Preferred Share for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and dividing that product by (y) 50% of the then current
per share market price of the Company's Common Shares (determined pursuant
to Section 11(d) hereof) on the date of such first occurrence (such number
of shares being referred to as the "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 sufficient treasury
shares or authorized but unissued (and unreserved) Common Shares to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable (and the Board of
Directors of the Company has determined to make the Rights exercisable into
fractions of a Preferred Share), notwithstanding any other provision of
this Agreement, to the extent necessary and permitted by applicable law,
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, (x) a number of (or fractions of) Common Shares (up to the
maximum number of Common Shares which may permissibly be issued) and (y)
one one-thousandth of a Preferred Share or a number of, or fractions of
other equity securities of the Company (or, in the discretion of the Board
of Directors, debt) which the Board of Directors of the Company has
determined to have the same aggregate current market value (determined
pursuant to Section 11(d)(i) and (ii) hereof, to the extent applicable) as
one Common Share (such number of, or fractions of, Preferred Shares, debt,
or other equity securities or debt of the Company being referred to as a
"capital stock equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if sufficient Common Shares and/or
capital stock equivalents are unavailable, then the Company shall, to the
extent permitted by applicable law, take all such action as may be
necessary to authorize additional Common Shares or capital stock
equivalents for issuance upon exercise of the Rights, including the calling
of a meeting of stockholders; and provided, further, that if the Company is
unable to cause sufficient Common Shares and/or capital 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 Shares upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined). As used herein, the term "Adjusted Number of Shares"
shall be equal to that number of (or fractions of) Common Shares (and/or
capital stock equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number
of Common Shares (and/or capital 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 a sufficient number of Common Shares 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 Shares and
capital stock equivalents upon exercise of the Rights among holders of
Rights.
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price
per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d) hereof) 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 Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current per share
market price, and the denominator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
and conclusive for all purposes on the Rights Agent and the holders of the
Rights. The Rights Agent shall always be entitled to assume that the Board
of Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price (as determined pursuant to Section 11(d) hereof) of the Preferred
Shares on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to and not including such date; provided, however, that in the event
that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security
of (A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to
the expiration of thirty (30) Trading Days after and not including the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. 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 Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if on
any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Security, the fair value of the Security on such
date as determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section
11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof), multiplied by one
thousand (1,000). If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights.
(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 one one-thousandth
of a Preferred Share or one ten-thousandth of any other share or security
as the case may be. Any adjustment required by this Section 11 and not
otherwise made pursuant to the first sentence of this Section 11(e) shall
be made no later than the earlier of (i) three (3) years from the date of
the transaction which mandates such adjustment or (ii) the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of
the Company other than Preferred Shares, thereafter the number of other
shares so receivableupon 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 Preferred Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a Preferred Share 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 so
provided in Section 11(i) hereof, upon adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and 11(c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the Adjusted Purchase Price,
that number of one one-thousandths of a Preferred Share (calculated to the
nearest one one-thousandth of a Preferred Share) obtained by (i)
multiplying (A) the number of Preferred Shares covered by a Right
immediately prior to this adjustment of the Purchase Price by (B) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made, a copy of which public announcement shall
promptly be delivered to the Rights Agent. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number
of one one-thousandths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number
of one one-thousandths of a Preferred Share, Common Shares 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 such number of fully
paid and non-assessable one one-thousandths of a Preferred Share, Common
Shares or other securities at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer with prompt notice
thereof to the Rights Agent until the occurrence of such event the issuance
to the holder of any Right exercised after such record date the Preferred
Shares, Common Shares or other securities of the Company, if any, issuable
upon such exercise over and above the Preferred Shares, Common Shares or
other securities of the Company, if any, issuable upon 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 or other securities, as the case may be, upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that it in its sole discretion shall determine to
be advisable in order that (i) any consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made
by the Company to holders of its Preferred Shares shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which does not
violate Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which does not
violate Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which does not violate
this Section 11(n)), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any charter or by-law
provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale or transfer, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates. The Company shall not consummate any such consolidation,
merger, sale or transfer 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 Section 11(n).
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action the purpose of
which is to, or if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) 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.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief reasonably detailed statement of the facts and
computations accounting for such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Shares and the Preferred Shares
a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall have no duty with respect
to and shall not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, on or following the Shares
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any Interested Stockholder or, if in such
merger or consolidation all holders of Common Stock are not treated alike,
any other Person, (y) the Company shall consolidate with, or merge with,
any Interested Stockholder or, if in such merger or consolidation all
holders of Common Stock are not treated alike, any other Person, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described
in (x) or (y), a merger or consolidation which would result in all of the
securities generally entitled to vote in the election of directors ("voting
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
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 transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Interested Stockholder or Stockholders or, if in
such transaction all holders of Common Stock are not treated alike, any
other Person (other than the Company or any Subsidiary of the Company in
one or more transactions each of which does not violate Section 11(n)
hereof), then, and in each such case (except as provided in Section 13(d)
hereof), proper provision shall be made so that (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement and in lieu
of Preferred Shares, such number of freely tradable shares of common stock
of the Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that product by
(B) 50% of the then current per share market price of the Common Shares of
such Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section
13 Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise of
the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or consolidation
(including, if applicable, the Company if it is the surviving corporation);
and (ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions; provided, however, that in any of the
foregoing cases, (1) if the Common Shares of such Person are not at such
time and have not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Shares of
which are and have been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; 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 (1) 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 the Principal Party shall have a sufficient
number of its authorized shares of common stock which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or transfer
mentioned in paragraph (a) of this Section 13, the Principal Party at its
own expense shall:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable 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 which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. 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 thereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired Common Shares pursuant to
a Permitted Offer (or a wholly owned Subsidiary of any such Person or
Persons); (ii) the price per Common Share offered in such transaction is
not less than the price per Common Share paid to all holders of Common
Shares whose shares were purchased pursuant to such Permitted Offer; and
(iii) the form of consideration offered in such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are one one-thousandth or
integral multiples of one one-thousandth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are one
one-thousandth or integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided that such
agreement shall provide that the holders of such depositary receipts shall
have the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not one
one-thousandth or integral multiples of one one-thousandth of a Preferred
Share, the Company shall 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
one Preferred Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive Common Shares,
capital stock equivalents (other than Preferred Shares) or other securities
upon the exercise of a Right, the Company shall not be required to issue
fractions of shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractions of such Common Shares,
capital stock equivalents or other securities. In lieu of fractional shares
or units of such Common Shares, capital 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 or unit of such Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14(c), the current market value
shall be determined 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
capital stock equivalent is not traded, each such capital stock equivalent
shall have the value of one one-thousandth of a Preferred Share.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional share
upon exercise of a Right (except as provided above). The Rights Agent shall
not be deemed to have knowledge of, and shall have no duty in respect of,
the issuance of fractional Rights or fractional shares until it shall have
received written instructions from the Company concerning the issuance of
the fractional Rights or fractional shares upon which instructions the
Rights Agent may conclusively rely.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
this Agreement, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
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 Right Certificate (or, prior to the Distribution Date, of the
Common Shares) in the manner provided in such Right Certificate (or, prior
to the Distribution Date, of the Common Shares) and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with
the appropriate form fully and duly executed;
(c) subject to Section 7(f) hereof, the Company and the Rights Agent
may deem and treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(e) hereof shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other
order, judgment, decree or ruling (whether interlocutory or final) issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree, judgment, or ruling lifted or otherwise overturned as soon
as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except
as provided in this Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the preparation, delivery, amendment, 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, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct (as determined by a court of
competent jurisdiction) on the part of the Rights Agent, for any action
taken, suffered or omitted by the Rights Agent in connection with the
acceptance, amendment and administration of this Agreement, including
without limitation, the costs and expenses of defending against any claim
of liability arising therefrom, directly or indirectly. The indemnity
provided for herein shall survive the expiration of the Rights and the
termination of this Agreement. The reasonable costs and expenses incurred
in enforcing this right of indemnification shall be paid by the Company.
Anything to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect, punitive, incidental or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage.
The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of, any action taken, suffered or omitted by
it in connection with, its acceptance and administration of this Agreement
in reliance upon any Right Certificate or certificate for Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document (collectively,
"Documents") believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons,
or otherwise upon the advice of counsel as set forth in Section 20 hereof.
The Rights Agent shall not be deemed to have knowledge of, and shall have
no duty in respect of, any such Documents, until it receives notice or
instructions in respect thereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any Person succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement. In case at any time the name
of the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
those duties and obligations expressly imposed by this Agreement (and no
implied duties or obligations) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of, to any
action taken, suffered or omitted by it in good faith and in accordance
with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of an Acquiring Person and the
determination of the current market price of any Security) be proved or
established by the Company prior to taking, suffering or omitting any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent and the Rights Agent shall incur no
liability in respect of any action taken, suffered or omitted in good faith
by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct as determined by a court of
competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of any
liability in respect of, of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its countersignature on
such Right 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 liability or
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming null and void pursuant to Section 7(e) hereof); nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 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 Right Certificates after receipt of the certificate
described in Section 12 hereof); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Preferred
Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and instructions shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in good faith or lack of action in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on or after which such action shall be taken
or suffered or such omission shall be effective. The Rights Agent shall not
be liable or responsible for any action taken or suffered by, or omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instruction from any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company in response to
such application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any other
Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, bad faith or willful misconduct as determined by a court
of competent jurisdiction in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has not
been completed to certify the holder is not an Acquiring Person (or
Affiliate or Associate thereof), the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates
by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon sixty (60) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of sixty (60) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a Person organized
and doing business under the laws of the United States or of the States of
Delaware or New York (or of any other state of the United States so long as
such Person is authorized to do business in the States of Delaware or New
York), in good standing, which is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Company (a) shall with respect to
Common Shares so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the exercise, conversion
or exchange of securities, notes or debentures issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be obligated to issue any
such Right Certificates if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) (i) The Board of Directors
of the Company may, at its option, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"),
at any time prior to the earlier of (x) the occurrence of a Section
11(a)(ii) Event, or (y) the Final Expiration Date.
(ii) In addition, the Board of Directors of the Company may, at
its option, at any time following the occurrence of a Section 11(a)(ii) Event
and the expiration of any period during which the holder of Rights may
exercise the rights under Section 11(a)(ii) but prior to any Section 13
Event redeem all but not less than all of the then outstanding Rights at
the Redemption Price (x) in connection with any merger, consolidation or
sale or other transfer (in one transaction or in a series of related
transactions) of assets or earning power aggregating 50% or more of the
earning power of the Company and its subsidiaries (taken as a whole) in
which all holders of Common Shares are treated alike and not involving
(other than as a holder of Common Shares being treated like all other such
holders) an Interested Stockholder or (y)(aa) if and for so long as the
Acquiring Person is not thereafter the Beneficial Owner of 15% of the
Common Shares, and (bb) at the time of redemption no other Persons are
Acquiring Persons.
(b) Notwithstanding anything in Section 23(a)(i) and (ii) to the
contrary, in the case the Company is not permitted to pay the Redemption
Price under the terms of any agreement or instrument evidencing
indebtedness for borrowed money of the Company or any Subsidiary, currently
in existence or executed after the date hereof, the payment of the
Redemption Price shall be deferred until such time as such payment becomes
permitted under the terms of any such agreement or instrument; provided,
however, that such deferral shall not, in any way, affect the right and
ability of the Board of Directors of the Company to redeem the Rights.
(c) In the case of a redemption permitted under Section 23(a)(i),
immediately upon the date for redemption set forth (or determined in the
manner specified) in a resolution of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be, except as provided
in Section 23(b), to receive the Redemption Price for each Right so held.
In the case of a redemption permitted only under Section 23(a)(ii), the
right to exercise the Rights will terminate and represent only, except as
provided in Section 23(b), the right to receive the Redemption Price upon
the later of ten Business Days following the giving of such notice or the
expiration of any period during which the rights under Section 11(a)(ii)
may be exercised. The Company shall promptly give public notice and notify
the Rights Agent of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within ten (10) days after such date for
redemption set forth in a resolution of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
(d) 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 in accordance with this Agreement 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 Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent of the Common Shares, and upon such action, all
outstanding Rights and Right Certificates shall be null and void without
any further action by the Company.
Section 24. Exchange. (a) The Board of Directors of the Company may,
at its option, at any time after the time that any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null
and void pursuant to the provisions of Section 7(e) and Section 11(a)(ii)
hereof) for Common Shares of the Company at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall
not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, any Person organized,
appointed or established by the Company for or pursuant to the terms of any
such plan or any trustee, administrator or fiduciary of such a plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of the holders of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice and
notify the Rights Agent of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become null and
void pursuant to the provisions of Section 7(e) and Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in Section 11(b) hereof) for some or all of the Common
Shares exchangeable for Rights, at the initial rate of one one-thousandth
of a Preferred Share (or equivalent preferred share) for each Common Share,
as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Shares pursuant to the terms thereof, so that the fraction of
a Preferred Share delivered in lieu of each Common Share shall have the
same voting rights as one Common Share.
(d) The Board of Directors of the Company shall not authorize any
exchange transaction referred to in Section 24(a) hereof unless at the time
such exchange is authorized there shall be sufficient Common Shares or
Preferred Shares issued but not outstanding, or authorized but unissued, to
permit the exchange of Rights as contemplated in accordance with this
Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regularly quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which does
not violate Section 11(n) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer) in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does not violate
Section 11(n) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give
to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action and
file a certificate with the Rights Agent to that effect, which shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares, whichever
shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the Company
shall as soon as practicable thereafter give the Rights Agent and each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph (a) to Preferred
Shares shall be deemed thereafter to refer also to Common Shares and/or, if
appropriate, other securities of the Company.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to 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:
Gleason Corporation
1000 University Avenue
P.O. Box 22970
Rochester, New York 14692
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street
New York, New York 10001
Attention: Jay Fassler
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares 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. Except as set forth in the
penultimate sentence of this Section 27, prior to the Distribution Date,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing Common Shares. From and after the
Distribution Date, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided,
however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period unless any such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery
of a certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or
amendment, provided that such supplement or amendment does not adversely
affect the rights or obligations of the Rights Agent 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
Shares.
Section 28. Determination and Actions by the Board of Directors, etc.
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 of Directors of the Company, or
the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of Right
Certificates). For all purposes of this Agreement, any calculation of the
number of Common Shares or other securities outstanding at any particular
time, including for purposes of determining the particular percentage of
such outstanding Common Shares or any other securities of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board of Directors of the Company in good faith (and
the Rights Agent shall be able to assume that the Board of Directors of the
Company acted in such good faith and shall be fully protected and incur no
liability in reliance thereon), shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Right Certificates and
all other Persons, and (y) not subject the Board of Directors of the
Company to any liability to the holders of the Right 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 Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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 Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State; except that
all provisions regarding the rights, duties and obligations of the Rights
Agent shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to 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 date and year first above written.
GLEASON CORPORATION
Attest:
By: /s/ Edward J. Pelta By: /s/ James S. Gleason
----------------------------- ----------------------------
Name: Edward J. Pelta Name: James S. Gleason
Title: Vice President, General Title: Chairman and Chief
Counsel & Secretary Executive Officer
CHASEMELLON SHAREHOLDER SERVICES,
L.L.C., AS RIGHTS AGENT
Attest:
By: /s/ Jared Fassler By: /s/ Regina Brown
------------------------------- ----------------------------
Name: Jared Fassler Name: Regina Brown
-------------------------- -----------------------
Title: Assistant Vice President Title: Vice President
------------------------- -----------------------
<PAGE>
Exhibit A
GLEASON CORPORATION
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES B JUNIOR PARTICIPATING
PREFERRED STOCK
PAR VALUE $1.00 PER SHARE
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
We, James S. Gleason, Chairman and Chief Executive Officer, and Edward
J. Pelta, Vice President, General Counsel & Secretary, of Gleason
Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), in accordance
with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
FIRST: That the Certificate of Incorporation provides that the Company
is authorized to issue 500,000 shares of preferred stock, none of which are
issued and outstanding.
SECOND: That, pursuant to the authority conferred upon the Board of
Directors by the Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the Board of Directors held a Board of
Directors meeting on May 4, 1999, at which time they adopted the following
resolution creating a series of 100,000 shares of Preferred Stock
designated as Series B Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by Article FOURTH of the Certificate of Incorporation, a series
of Preferred Stock of the Company be, and it hereby is, created out of the
authorized but unissued shares of the capital stock of the Company, such
series to be designated Series B Junior Participating Preferred Stock (the
"Participating Preferred Stock"), to consist of one hundred thousand
(100,000) shares, of par value $1.00 per share, of which the preferences
and relative and other rights, and the qualifications, limitations or
restrictions thereof, shall be as follows:
1. Future Increase or Decrease. Subject to paragraph 4(e) of this
resolution, the number of shares of said series may at any time or from
time to time be increased or decreased by the Board of Directors
notwithstanding that shares of such series may be outstanding at such time
of increase or decrease.
2. Dividend Rate.
(a) The holders of shares of Participating Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in
cash on the first day of each January, April, July and October in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance (the "First Issuance") of a share or fraction of a share of
Participating Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10.00 or (b) 1,000 times the
aggregate per share amount of all cash dividends and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, of par value
$1.00 per share, of the Company (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Participating Preferred Stock. In the event the
Company shall at any time after the First Issuance declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which holders
of shares of Participating Preferred Stock were entitled immediately prior
to such event under the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) On or after the First Issuance, no dividend on Common Stock
shall be declared unless concurrently therewith a dividend or distribution is
declared on the Participating Preferred Stock as provided in paragraph (a)
above; and the declaration of any such dividend on the Common Stock shall
be expressly conditioned upon payment or declaration of and provision for a
dividend on the Participating Preferred Stock as above provided. In the
event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per
share on the Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Whenever quarterly dividends or other dividends payable on the
Participating Preferred Stock as provided in paragraph (a) above are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Participating
Preferred Stock outstanding shall have been paid in full, the Company shall
not redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Participating Preferred Stock, provided
that the Company may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon dissolution, liquidation
or winding up) to the Participating Preferred Stock.
(d) Dividends shall begin to accrue and be cumulative on outstanding
shares of Participating Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Participating
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. The Board of Directors may fix a record date for the
determination of holders of shares of Participating Preferred Stock
entitled to receive payment of a dividend distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for
the payment thereof.
3. Dissolution, Liquidation and Winding Up. In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company (hereinafter referred to as a "Liquidation"), the
holders of Participating Preferred Stock shall be entitled to receive the
greater of (i) $1,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date
of such payment and (ii) the aggregate amount per share equal to 1,000
times the aggregate amount to be distributed per share to holders of Common
Stock (the "Participating Preferred Liquidation Preference"). In the event
the Company shall at any time after the First Issuance declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Participating Preferred Stock were entitled
immediately prior to such event under the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
4. Voting Rights. The holders of shares of Participating Preferred
Stock shall have the following voting rights:
(a) Each share of Participating Preferred Stock shall entitle the
holder thereof to one thousand (1,000) votes on all matters submitted to a
vote of the stockholders of the Company. In the event the Company shall at
any time after the First Issuance declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of shares of
Participating Preferred Stock were entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(b) Except as otherwise provided herein, or by law, the
Certificate of Incorporation or the By-laws of the Company (the "By-laws"),
the holders of shares of Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(c) If and whenever dividends on the Participating Preferred Stock
shall be in arrears in an amount equal to six quarterly dividend payments,
then and in such event the holders of the Participating Preferred Stock,
voting separately as a class (subject to the provisions of subparagraph (d)
below), shall be entitled at the next annual meeting of the stockholders or
at any special meeting to elect two (2) directors. Each share of
Participating Preferred Stock shall be entitled to one vote, and holders of
fractional shares shall have the right to a fractional vote. Upon election,
such directors shall become additional directors of the Company and the
authorized number of directors of the Company shall thereupon be
automatically increased by such number of directors. Such right of the
holders of Participating Preferred Stock to elect directors may be
exercised until all dividends in default on the Participating Preferred
Stock shall have been paid in full, and dividends for the current dividend
period declared and funds therefor set apart, and when so paid and set
apart, the right of the holders of Participating Preferred Stock to elect
such number of directors shall cease, the term of such directors shall
thereupon terminate, and the authorized number of directors of the Company
shall thereupon return to the number of authorized directors otherwise in
effect, but subject always to the same provisions for the vesting of such
special voting rights in the case of any such future dividend default or
defaults. The fact that dividends have been paid and set apart as required
by the preceding sentence shall be evidenced by a certificate executed by
the President and the Chief Financial Officer of the Company and delivered
to the Board of Directors. The directors so elected by holders of
Participating Preferred Stock shall serve until the certificate described
in the preceding sentence shall have been delivered to the Board of
Directors or until their respective successors shall be elected or
appointed and qualify.
At any time when such special voting rights have been so vested in the
holders of the Participating Preferred Stock, the Secretary of the Company
may, and upon the written request of the holders of record of 10% or more
of the number of shares of the Participating Preferred Stock then
outstanding addressed to such Secretary at the principal office of the
Company in the State of New York, shall, call a special meeting of the
holders of the Participating Preferred Stock for the election of the
directors to be elected by them as hereinabove provided, to be held in the
case of such written request within forty (40) days after delivery of such
request, and in either case to be held at the place and upon the notice
provided by law and in the By-laws of the Company for the holding of
meetings of stockholders; provided, however, that the Secretary shall not
be required to call such a special meeting (i) if any such request is
received less than ninety (90) days before the date fixed for the next
ensuing annual or special meeting of stockholders or (ii) if at the time
any such request is received, the holders of Participating Preferred Stock
are not entitled to elect such directors by reason of the occurrence of an
event specified in the third sentence of subparagraph (d) below.
(d) If, at any time when the holders of Participating Preferred
Stock are entitled to elect directors pursuant to the foregoing provisions of
this paragraph 4, the holders of any one or more additional series of
Preferred Stock are entitled to elect directors by reason of any default or
event specified in the Certificate of Incorporation, as in effect at the
time of the certificate of designation for such series, and if the terms
for such other additional series so permit, the voting rights of the two or
more series then entitled to vote shall be combined (with each series
having a number of votes proportional to the aggregate liquidation
preference of its outstanding shares). In such case, the holders of
Participating Preferred Stock and of all such other series then entitled so
to vote, voting as a class, shall elect such directors. If the holders of
any such other series (if designated) have elected such directors prior to
the happening of the default or event permitting the holders of
Participating Preferred Stock to elect directors, or prior to a written
request for the holding of a special meeting being received by the
Secretary of the Company from the holders of not less than 10% of the then
outstanding shares of Participating Preferred Stock, then such directors so
previously elected will be deemed to have been elected by and on behalf of
the holders of Participating Preferred Stock as well as such other series,
without prejudice to the right of the holders of Participating Preferred
Stock to vote for directors if such previously elected directors shall
resign, cease to serve or fail to stand for reelection while the holders of
Participating Preferred Stock are entitled to vote. If the holders of any
such other series are entitled to elect in excess of two (2) directors, the
Participating Preferred Stock shall not participate in the election of more
than two (2) such directors, and those directors whose terms first expire
shall be deemed to be the directors elected by the holders of Participating
Preferred Stock; provided that, if at the expiration of such terms the
holders of Participating Preferred Stock are entitled to vote in the
election of directors pursuant to the provisions of this paragraph 4, then
the Secretary of the Company shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders referred to in
subparagraph (c)) of holders of Participating Preferred Stock for the
purpose of electing replacement directors (in accordance with the
provisions of this paragraph 4) to be held on or prior to the time of
expiration of the expiring terms referred to above.
(e) Except as otherwise set forth herein or required by law, the
Certificate of Incorporation or the By-laws, holders of Participating
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any
corporate action. No consent of the holders of outstanding shares of
Participating Preferred Stock at any time outstanding shall be required in
order to permit the Board of Directors to: (i) increase the number of
authorized shares of Participating Preferred Stock or to decrease such
number to a number not below the sum of the number of shares of
Participating Preferred Stock then outstanding and the number of shares
with respect to which there are outstanding rights to purchase; or (ii)
issue Preferred Stock which is senior to the Participating Preferred Stock,
junior to the Participating Preferred Stock or on a parity with the
Participating Preferred Stock.
5. Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each
share of Participating Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Company shall at any time after the
First Issuance declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
6. Redemption. The shares of Participating Preferred Stock shall not
be redeemable.
7. Conversion Rights. The Participating Preferred Stock is not
convertible into Common Stock or any other security of the Company.
<PAGE>
IN WITNESS WHEREOF, the undersigned Chairman and Chief Executive
Officer, and Vice President, General Counsel & Secretary, of the Company
each declares under penalty or perjury the truth, to the best of his
knowledge, of this Certificate of Designation, Preferences and Rights of
Series B Junior Participating Preferred Stock.
Executed this ____ day of __________, 1999.
By:
--------------------------------------
Name: James S. Gleason
Title: Chairman and Chief Executive
Officer
Attest:
- --------------------------------------
Name: Edward J. Pelta
Title: Vice President, General Counsel
& Secretary
<PAGE>
Preferred
Exhibit B
---------
Form of Right Certificate
Certificate No. R- Rights
--------------
NOT EXERCISABLE AFTER JUNE 12, 2009, OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
GLEASON 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 Rights
Agreement, dated as of May 4, 1999 (the "Rights Agreement"), between
Gleason Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company as rights agent (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., New York time, on June 12, 2009,
unless the Rights evidenced hereby shall have been previously redeemed by
the Company, at the office or offices of the Rights Agent designated for
such purpose, or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series B Junior
Participating Preferred Stock, of par value $1.00 per share (the "Preferred
Shares"), of the Company, at a purchase price of $70.00 per one
one-thousandth of Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of
__________, based on the Preferred Shares as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are Beneficially Owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes such, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such, such Rights shall become null and void and
no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandth of a Preferred Share or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events (as such term is defined in
the Rights Agreement).
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and
restrictions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and
the office or offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a
redemption price of $.01 per Right (subject to adjustment as provided in
the Rights Agreement) payable in cash.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are one
one-thousandth or integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or to exercise any preemptive or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________________________________.
[SEAL]
ATTEST: GLEASON CORPORATION
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
By:
-----------------------------
Authorized Signatory
Name:
Title:
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _____________________________________________________________
- ----------------------------------------------------------------------
(Please print name and address of transferee)
- ----------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated:
---------------------------------------, ------
---------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank, savings association, credit
union or trust company having an office or correspondent in the United
States or other eligible guarantor institution which is a participant in a
signature guarantee medallion program.
- -------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Right Agreement) and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
---------------------------------
Signature
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ___________________
______________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares, Common Shares or other securities issuable upon
the exercise of such Rights and requests that certificates for such Preferred
Shares, Common Shares or other securities be issued in the name of:
Please insert social security
or other identifying number
---------------------------------------------
- -----------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------
- -----------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------------------------
Dated:
---------------------------------------, ------
-------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank, savings association, credit
union or trust company having an office or correspondent in the United
States or other eligible guarantor institution which is a participant in a
signature guarantee medallion program.
Form of Reverse Side of Right Certificate -- continued.
- -------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) and (2) after due inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Rights Certificate from any Person who is or was
an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
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Signature
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NOTICE
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The signature on the foregoing Forms of Assignment and Election and
certificates must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement) and such Assignment or Election to Purchase will not be
honored.
