SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ORION CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-6069054
(State of Incorporation or Organization) (IRS Employer
Identification No.)
600 Fifth Avenue, New York, NY 10020-2302
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
Preferred Stock Purchase New York Stock Exchange
Rights
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On September 11, 1996, the Board of Directors of
Orion Capital Corporation (the "Company") declared a divi-
dend distribution of one Right for each outstanding share of
Common Stock to shareholders of record at the close of
business on September 16, 1996 (the "Record Date"). Each
Right entitles the registered holder to purchase from the
Company one two-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), at a Purchase Price of $200, sub-
ject 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.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then outstand-
ing, and no separate Rights Certificates will be distribut-
ed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten
(10) days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date"), other than as a result of repurchases of stock by
the Company or certain inadvertent actions by institutional
or certain other shareholders, or (ii) ten (10) business
days (or such later date as the Board shall determine)
following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially
owning fifteen percent (15%) or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certifi-
cates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incor-
porating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certif-
icate. Pursuant to the Rights Agreement, the Company re-
serves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise
of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribu-
tion Date and will expire at the close of business on Sep-
tember 11, 2006, unless earlier redeemed or exchanged by the
Company as described below.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board, only shares of Common
Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that a Person becomes an Acquiring
Person (except pursuant to an offer for all outstanding
shares of Common Stock that the independent directors
determine (i) not to be inadequate and (ii) to otherwise be
in the best interests of the Company and its shareholders),
each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circum-
stances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all
Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are
not exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $200 per
Right, each Right not owned by an Acquiring Person (or by
certain related parties) following an event set forth in the
preceding paragraph would entitle its holder to purchase
$400 worth of Common Stock (or other consideration, as noted
above) for $200. Assuming that the Common Stock had a per
share value of $50 at such time, the holder of each valid
Right would be entitled to purchase 8 shares of Common Stock
for $200.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction (other than a merger
which follows an offer described in the second preceding
paragraph), or (ii) fifty percent (50%) or more of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the acquir-
ing company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph
and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time until ten (10) business days following
the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board). Immediately upon the
action of the Board ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price. The
foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty (180) days following a
change in a majority of the Board as a result of a proxy
contest.
At any time after the acquisition by a person or
group of affiliated or associated persons of beneficial
ownership of 15% or more of the outstanding shares and prior
to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock, the Board of Direc-
tors may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or
one two-hundredths of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder 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 shareholders or to the Company,
shareholders may, depending upon the circumstances, recog-
nize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set
forth above.
Any of the provisions of the Rights Agreement may
be amended by the Board prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any
ambiguity, to make changes which do not adversely affect the
interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement; provided, howev-
er, that no amendment may be made at such time as the Rights
are not redeemable.
As of September 20, 1996, there were 15,337,650
shares of Common Stock of the Company outstanding and
1,580,699 shares of Common Stock of the Company in the
treasury. As of September 20, 1996, options to purchase
440,151 shares of Common Stock were outstanding. Each share
of Common Stock of the Company outstanding at the close of
business on September 16, 1996, will receive one Right. So
long as the Rights are attached to the Common Stock, one
additional Right (as such number may be adjusted pursuant to
the provisions of the Rights Agreement) shall be deemed to
be delivered for each share of Common Stock issued or trans-
ferred by the Company in the future. In addition, following
the Distribution Date and prior to the expiration or redemp-
tion of the Rights, the Company may issue Rights when it
issues Common Stock only if the Board deems it to be neces-
sary or appropriate, or in connection with the issuance of
shares of Common Stock pursuant to the exercise of stock
options or under employee plans or upon the exercise, con-
version or exchange of certain securities of the Company.
One million shares of Preferred Stock are initially reserved
for issuance upon exercise of the Rights.
The Rights may have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company in a manner which
causes the Rights to become discount Rights unless the offer
is conditional on a substantial number of Rights being
acquired. The Rights, however, should not affect any pro-
spective offeror willing to make an offer at a fair price
and otherwise in the best interests of the Company and its
shareholders as determined by a majority of the Directors
who are not affiliated with the person making the offer, or
willing to negotiate with the Board. The Rights should not
interfere with any merger or other business combination
approved by the Board since the Board may, at its option, at
any time until ten days following the Stock Acquisition Date
redeem all but not less than all the then outstanding Rights
at the Redemption Price.
The Rights Agreement, dated as of September 11,
1996, between the Company and ChaseMellon Shareholder Ser-
vices L.L.C., as Rights Agent, specifying the terms of the
Rights and including the form of Certificate of Designation,
Preferences and Rights setting forth the terms of the Pre-
ferred Stock as an exhibit thereto, is attached hereto as an
exhibit and is incorporated herein by reference. The fore-
going description of the Rights is qualified in its entirety
by reference to such exhibit.
ITEM 2. EXHIBITS.
1 Rights Agreement, dated as of September 11, 1996,
between Orion Capital Corporation and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the form of Certificate of Designation,
Preferences and Rights setting forth the terms of
the Series B Junior Participating Preferred Stock,
par value $1.00 per share, as Exhibit A, the form
of Rights Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Stock as Exhibit
C. Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until after
the Distribution Date (as such term is defined in
the Rights Agreement).
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, thereunto duly authorized.
Orion Capital Corporation
By:/s/ Michael P. Maloney
___________________________
Michael P. Maloney
Vice President
Dated: September 20, 1996
EXHIBIT INDEX
Exhibit Description Page
1 Rights Agreement, dated as of September 11, 1996,
between Orion Capital Corporation and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the form of Certificate of Designation,
Preferences and Rights setting forth the terms of
the Series B Junior Participating Preferred Stock,
par value $1.00 per share, as Exhibit A, the form
of Rights Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Stock as Exhibit
C. Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until after
the Distribution Date (as such term is defined in
the Rights Agreement).
Orion Capital Corporation
and
ChaseMellon Shareholder Services L.L.C.,
as Rights Agent
Rights Agreement
Dated as of September 11, 1996
TABLE OF CONTENTS
Section Page
1. Certain Definitions . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . 7
3. Issuance of Rights Certificates . . . . . . 7
4. Form of Rights Certificates . . . . . . . . 10
5. Countersignature and Registration . . . . . 11
6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . 12
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . 13
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . 16
9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . . 17
10. Preferred Stock Record Date . . . . . . . 19
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . . 19
12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . 32
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power . . . . . . . . 32
14. Fractional Rights and Fractional Shares . 36
15. Rights of Action . . . . . . . . . . . . . 38
16. Agreement of Rights Holders . . . . . . . 38
17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . 39
18. Concerning the Rights Agent . . . . . . . 40
19. Merger or Consolidation or Change of Name
of Rights Agent . . . . . . . . . . . . . 40
20. Duties of Rights Agent . . . . . . . . . . 41
21. Change of Rights Agent . . . . . . . . . . 44
22. Issuance of New Rights Certificates . . . 45
23. Redemption and Termination . . . . . . . . 46
24. Exchange . . . . . . . . . . . . . . . . . 47
25. Notice of Certain Events . . . . . . . . . 49
26. Notices . . . . . . . . . . . . . . . . . 50
27. Supplements and Amendments . . . . . . . . 51
28. Successors . . . . . . . . . . . . . . . . 52
29. Determinations and Actions by the Board,
etc. . . . . . . . . . . . . . . . . . . . 52
30. Benefits of this Agreement . . . . . . . . 52
31. Severability . . . . . . . . . . . . . . . 52
32. Governing Law . . . . . . . . . . . . . . 53
33. Counterparts . . . . . . . . . . . . . . . 53
34. Descriptive Headings . . . . . . . . . . . 53
EXHIBITS
Exhibit A -- Form of Certificate of Designation,
Preferences and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 11,
1996 (this "Agreement"), between Orion Capital
Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Service L.L.C., a New Jersey
limited liability company, as Rights Agent (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on March 15, 1989 (the "1989 Rights
Dividend Declaration Date"), the Board of Directors of
the Company (the "Board") authorized the Rights
Agreement, dated as of March 15, 1989, between the
Company and Manufacturers Hanover Trust Company (the
"1989 Agreement") and declared a dividend distribution of
one right (a "1989 Right") for each share of common
stock, par value $1.00 per share, of the Company (the
"Common Stock") outstanding at the close of business on
March 27, 1989 (the "1989 Record Date"). Each 1989 Right
represents the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock of
the Company;
WHEREAS, on September 11, 1996 the Board
determined it desirable and in the best interests of the
Company and its stockholders for the Company to redeem
the 1989 Rights upon the close of business on September
16, 1996 and adopt a new rights plan which would provide
benefits similar to those afforded by the 1989 Agreement;
WHEREAS, on September 11, 1996 (the "Rights
Dividend Declaration Date"), the Board authorized and
declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock
outstanding upon the close of business on September 16,
1996 (the "Record Date"), and has authorized the issuance
of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock issued between the Record Date
(whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as
hereinafter defined), each Right initially representing
the right to purchase one two-hundredth of a share of
Series B Junior Participating Preferred Stock (the
"Preferred Stock") having the rights, powers and
preferences set forth in the form of Certificate of
Designation, Preferences and Rights of the Company
attached hereto as Exhibit A, upon the terms and subject
to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, 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 fifteen percent (15%) or more of the shares of Common
Stock then outstanding, but 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, (v) any Person who becomes
the Beneficial Owner of fifteen percent (15%) or more of
the shares of Common Stock then outstanding as a result
of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common
Stock by the Company unless and until such Person, after
becoming aware that such Person has become the Beneficial
Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock, acquires beneficial
ownership of additional shares of Common Stock
representing one percent (1%) or more of the shares of
Common Stock then outstanding or (vi) any such Person who
has reported or is required to report such ownership (but
less than 20%) on Schedule 13G under the Exchange Act (or
any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor
report) which Schedule 13D does not state any intention
to or reserve the right to control or influence the
management or policies of the Company or engage in any of
the actions specified in Item 4 of such Schedule (other
than the disposition of the Common Stock) and, within 10
Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such
Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the
Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional shares
of Common Stock while the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding; provided,
however, that if the Person requested to so certify fails
to do so within 10 Business Days, then such Person shall
become an Acquiring Person immediately after such 10
Business Day Period.
(b) "Act" shall mean the Securities Act
of 1933.
(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").
(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, directly or
indirectly, has the right to acquire (whether
such right is exercisable immediately or only
after the passage of time) pursuant to any
agreement, arrangement or understanding
(whether or not in writing) or upon the
exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise;
provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates
or Associates until such tendered securities
are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights at
any time prior to the occurrence of a
Triggering Event or (C) securities issuable
upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights
were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a)
or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of
such Person's Affiliates or Associates,
directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the
Exchange Act), including pursuant to any
agreement, arrangement or understanding,
whether or not in writing; provided, however,
that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii)
as a result of an agreement, arrangement or
understanding to vote such security if such
agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable provisions of
the General Rules and Regulations under the
Exchange Act, and (B) is not reportable by such
Person 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 (whether or not in writing),
for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii)
of this paragraph (d)) or disposing of any
voting securities of the Company;
provided, however, that nothing in this paragraph (d)
shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a
firm commitment underwriting until the expiration of
forty (40) days after the date of such acquisition.
(e) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
(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 Stock" shall have the meaning
set forth in the first WHEREAS clause at the beginning of
this Agreement, except that "Common Stock" when used with
reference to any Person other than the Company shall mean
the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest
having power to control or direct the management, of such
Person.
(h) "Common Stock Equivalents" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(i) "Current Market Price" shall have the
meaning set forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the
meaning set forth in Section 3(a) hereof.
(l) "Exchange Act" shall have the meaning
set forth in Section 1(c) hereof.
(m) "Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(n) "Final Expiration Date" shall mean
the close of business on September 11, 2006.
(o) "Person" shall mean any individual,
firm, corporation, partnership or other entity.
(p) "Preferred Stock" shall mean shares
of Series B Junior Participating Preferred Stock, par
value $1.00 per share, of the Company and, to the extent
that there are not a sufficient number of shares of
Series B Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other
series of preferred stock of the Company designated for
such purpose containing terms substantially similar to
the terms of the Series B Junior Participating Preferred
Stock.
(q) "Principal Party" shall have the
meaning set forth in Section 13(b) hereof.
(r) "Purchase Price" shall have the
meaning set forth in Section 4(a) hereof.
(s) "Record Date" shall have the meaning
set forth in the third WHEREAS clause at the beginning of
this Agreement.
(t) "Redemption Price" shall have the
meaning set forth in Section 23(a) hereof.
(u) "Rights" shall have the meaning set
forth in the third WHEREAS clause at the beginning of the
Agreement.
(v) "Rights Agent" shall have the meaning
set forth in the parties clause at the beginning of this
Agreement.
(w) "Rights Certificates" shall have the
meaning set forth in Section 3(a) hereof.
(x) "Rights Dividend Declaration Date"
shall have the meaning set forth in the third WHEREAS
clause at the beginning of this Agreement.
(y) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii) hereof.
(z) "Section 11(a)(ii) Trigger Date"
shall have the meaning set forth in Section 11(a)(iii)
hereof.
(aa) "Section 13 Event" shall mean any
event described in clauses (x), (y), or (z) of Section
13(a) hereof.
(bb) "Spread" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(cc) "Stock Acquisition Date" shall mean
the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become
such.
(dd) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(ee) "Substitution Period" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the
meaning set forth in Section 3(b) hereof.
(gg) "Trading Day" shall have the meaning
set forth in Section 11(d)(i) hereof.
(hh) "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.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition
Date occurs before the Record Date, the close of business
on the Record Date) or (ii) the close of business on the
tenth Business Day (or such later date as the Board shall
determine) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of
the Company, or 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) is first
published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding (the
earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by
separate certificates and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer
to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-
class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder
shown on the records of the Company, one or more right
certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Right Certificates, the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) The Company will make available a
copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"),
to any holder of Rights who may so request from time to
time. With respect to certificates for the Common Stock
outstanding as of the Record Date or were issued
subsequent to the Record Date, unless and until the
Distribution Date shall occur, the Rights will be
evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be
the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration
Date (as hereinafter defined), the transfer of any
certificates representing shares of Common Stock in
respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the
following legend (or the legend required under the 1989
Agreement):
This certificate also evidences and
entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between Orion
Capital Corporation (the "Company") and the
Rights Agent thereunder (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal offices of
the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and
will no longer be evidenced by this
certificate. The Company will mail to the
holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing,
without charge, promptly after receipt of a
written request therefor. Under certain
circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights
Agreement), whether currently held by or on
behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the
foregoing legend (or the legend required under the 1989
Agreement), until the earlier of (i) the Distribution
Date or (ii) the Expiration Date, the Rights associated
with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the
transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the
forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation
and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof
to purchase such number of one two-hundredths of a share
of Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one two-
hundredth of a share, 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 Rights Certificate issued
pursuant to Section 3(a), Section 11(i) or Section 22
hereof that represents Rights beneficially owned by: (i)
an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes
such or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined
is part of a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights
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 Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either
manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of
the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may
be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to
sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(a) 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 Expiration
Date, any Rights Certificate or Certificates (other than
Rights Certificates that may have been exchanged pursuant
to Section 24) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number
of one two-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then
entitles 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 Rights
Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal 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 Rights Certificate until the registered
holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company 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
Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment
of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or
in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number
of one two-hundredths of a share (or other securities,
cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior
to the earlier of (i) the close of business on September
11, 2006 (the "Final Expiration Date"), or (ii) the time
at which the Rights are redeemed or exchanged as provided
in Sections 23 and 24 hereof (the earlier of (i) and (ii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one
two-hundredth of a share of Preferred Stock pursuant to
the exercise of a Right shall initially be $200, and
shall be subject to adjustment from time to time as
provided in Section 11 and Section 13(a) hereof and shall
be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one two-hundredths
of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to
be purchased as set forth below and an amount equal to
any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for
the total number of one two-hundredths of a share of
Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have
elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such
number of one two-hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock 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 request, (ii)
requisition from the Company the amount of cash, if any,
to be paid in lieu 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 Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or
other property are available for distribution by the
Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of
a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares
of Preferred Stock would be issued.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(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
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a
plan, 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 use
all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its 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) completed
and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by
it, and no Rights 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 Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of
Capital Stock.
(a) The Company covenants and agrees that
it will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares
of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and
deliverable 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.
(c) The Company shall use its best
efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii)
hereof, 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) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and
(B) the date of the expiration of the Rights. The
Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i)
of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file
such registration statement and permit it to become
effective. Upon any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time
as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration
statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement
has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction has not been
obtained, the exercise thereof is not permitted under
applicable law or a registration statement has not been
declared effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to
ensure that all one two-hundredths of a share of
Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and
agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number
of one two-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or
delivery of a number of one two-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one two-
hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name
other than that of the registered holder upon the
exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
two-hundredths of a share of Preferred Stock (or Common
Stock 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 such
fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated the date
upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock
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
(fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price,
Number 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 Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a
reclassification of the Preferred Stock
(including any such reclassification in
connection with a consolidation or merger in
which the Company is the continuing or
surviving corporation), except as otherwise
provided in this Section 11(a) and 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 Preferred Stock or
capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so
that the holder of any Right exercised after
such time shall be entitled to receive, upon
payment of the Purchase Price then in effect,
the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case
may be, which, if such Right had been exercised
immediately prior to such date and at a time
when the Preferred Stock transfer books of the
Company were open, such holder would have owned
upon such exercise and been entitled to receive
by virtue of such dividend, subdivision,
combination or reclassification. If an event
occurs which would require an adjustment under
both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone
or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend
Declaration Date, becomes an Acquiring Person,
unless the event causing such Person to become
an Acquiring Person is a transaction set forth
in Section 13(a) hereof, or is an acquisition
of shares of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms
determined by at least a majority of the
members of the Board who are not officers of
the Company and who are not representatives,
nominees, Affiliates or Associates of an
Acquiring Person, after receiving advice from
one or more investment banking firms, to be (a)
at a price that is not inadequate (taking into
account all factors that such members of the
Board 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 (b) otherwise in the best interests
of the Company and its stockholders, then,
promptly following the occurrence of such
event, proper provision shall be made so that
each holder of a Right (except as provided
below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon
exercise thereof at the then current Purchase
Price in accordance with the terms of this
Agreement, in lieu of a number of one two-
hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company
as shall equal the result obtained by (x)
multiplying the then current Purchase Price by
the then number of one two-hundredths of a
share of Preferred Stock for which a Right was
exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following
such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement)
by fifty percent (50%) of the Current Market
Price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date
of such first occurrence (such number of
shares, the "Adjustment Shares").
(iii) In the event that the number
of shares of Common Stock that are authorized
by the Company's Restated Certificate of
Incorporation but not outstanding or reserved
for issuance for purposes other than upon
exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the
"Current Value"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right
and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity
securities of the Company (including, without
limitation, shares, or units of shares, of
preferred stock, such as the Preferred Stock,
which the Board has deemed to have essentially
the same value or economic rights as shares of
Common Stock (such shares of preferred stock
being referred to as "Common Stock
Equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any
combination of the foregoing, having an
aggregate value equal to the Current Value
(less the amount of any reduction in the
Purchase Price), where such aggregate value has
been determined by the Board based upon the
advice of a nationally recognized investment
banking firm selected by the Board; provided,
however, that if the Company shall not have
made adequate provision to deliver value
pursuant to clause (B) above within thirty (30)
days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of
redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a
Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate
value equal to the Spread. For purposes of the
preceding sentence, the term "Spread" shall
mean the excess of (i) the Current Value over
(ii) the Purchase Price. If the Board
determines in good faith that it is likely that
sufficient additional shares of Common Stock
could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day
period set forth above may be extended to the
extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder
approval for the authorization of such
additional shares (such thirty (30) day period,
as it may be extended, is herein called the
"Substitution Period"). To the extent that
action is to be taken pursuant to the first
and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding
Rights and (2) may suspend the exercisability
of the Rights until the expiration of the
Substitution Period in order to seek such
stockholder approval for such authorization of
additional shares and/or to decide the
appropriate form of distribution to be made
pursuant to such first sentence and to
determine the value thereof. In the event of
any such suspension, the Company shall issue a
public announcement stating that the
exercisability of the Rights has been
temporarily suspended, as well as a public
announcement at such time as the suspension is
no longer in effect. For purposes of this
Section 11(a)(iii), the value of each
Adjustment Share shall be the current market
price per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the per
share or per unit value of any Common Stock
Equivalent shall be deemed to equal the current
market price per share of the Common Stock on
such date.
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible
into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on
such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock outstanding on
such record date, plus the number of shares of Preferred
Stock that the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred
Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board, 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. Shares of Preferred
Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in
the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase
Price that would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of
Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or subscription rights
or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
Current Market Price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good
faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current
Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty
(30) consecutive Trading Days (as hereinafter
defined) immediately prior to such date, and for
purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share
of such Common Stock for the ten (10) consecutive
Trading Days immediately following such date;
provided, however, that in the event that the
Current Market Price per share of the Common Stock
is determined during a period following the
announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision,
combination or reclassification of such Common
Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such
subdivision, combination or reclassification shall
not have occurred prior to the commencement of the
requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in
each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be
the last sale price, regular way, or, in case no
such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in
either case as reported in the principal
consolidated transaction reporting system with
respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system
with respect to securities listed on the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading or,
if the shares of Common Stock are not listed or
admitted to trading on any national securities
exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported
by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any
such organization, the average of the closing bid
and asked prices as furnished by a professional
market maker making a market in the Common Stock
selected by the Board. If on any such date no
market maker is making a market in the Common Stock,
the fair value of such shares on such date as
determined in good faith by the Board shall be used.
The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the
shares of Common Stock are listed or admitted to
trading is open for the transaction of business or,
if the shares of Common Stock are not listed or
admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded,
Current Market Price per share shall mean the fair
value per share as determined in good faith by the
Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in
clause (i) of this Section 11(d) (other than the
last sentence thereof). If the Current Market Price
per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock
is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the
Current Market Price per share of Preferred Stock
shall be conclusively deemed to be an amount equal
to 200 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock
occurring after the date of this Agreement)
multiplied by the Current Market Price per share of
the Common Stock. If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share
as determined in good faith by the Board, whose
determination shall be described in a statement
filed with the Rights Agent and shall be conclusive
for all purposes.
(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 one percent (1%) in the
Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment or (ii) the
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 other
than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one two-
hundredths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of
one two-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one two-hundredths of a
share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the
number of one two-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of one two-
hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest 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. This record date may be the date
on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights 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 Rights Certificates on such record
date Rights 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 Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or
change in the Purchase Price or the number of one two-
hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express
the Purchase Price per one two-hundredth of a share and
the number of one two-hundredths of a share that were
expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then stated value, if any, of the number of one two-
hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of
one two-hundredths of a share of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11
shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right
exercised after such record date of the number of one
two-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of
one two-hundredths of a share of Preferred Stock and
other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares
(fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith
judgment the Board shall determine to be advisable in
order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred
Stock, (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
Stock 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 that complies
with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more
than fifty percent (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 complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding
or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or
sale, the stockholders of 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.
(o) The Company covenants and agrees
that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date,
shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common
Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the
total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is
made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred,
mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 27 hereof. The
Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating
more than fifty percent (50%) of the assets or earning
power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o)
hereof), then, and in each such case (except as may be
contemplated by 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 the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase
Price by the number of one two-hundredths of a share of
Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event,
multiplying the number of such one two-hundredths of a
share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by
the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2)
fifty percent (50%) of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per
share of the Common Stock of such Principal Party 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; (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with 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 its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(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 shares
of Common Stock of the Company are converted in
such merger or consolidation, and if no
securities are so issued, the Person that is
the other party to such merger or
consolidation; 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 such case, (1) if the
Common Stock of such Person is not at such time and has
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 Stock of which is and has
been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks 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
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized shares of its 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 or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will:
(i) prepare and file a registration
statement under the Act, with respect to the
Rights and the securities purchasable upon
exercise of the Rights on an appropriate form,
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 Expiration Date; and
(ii) will deliver to holders of the
Rights historical financial statements for the
Principal Party and each of its Affiliates
which comply in all respects with the
requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(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 shares
of Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii) hereof
(or a wholly owned subsidiary of any such Person or
Persons), (ii) the price per share of Common Stock
offered in such transaction is not less than the price
per share of Common Stock paid to all holders of shares
of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is
the same as the form of consideration paid pursuant to
such tender offer or exchange 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, except prior to the
Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of
a whole Right. For 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 of the Rights 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. 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 shall be used.
(b) The Company shall not be required to
issue fractions of shares of Preferred Stock (other than
fractions that are integral multiples of one two-hundredth
of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions that are
integral multiples of one two-hundredth of a share of
Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one
two-hundredth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights 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 two-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the
current market value of one two-hundredth of a share of
Preferred Stock shall be one two-hundredth of the closing
price of a share of Preferred Stock (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 a
Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to
the registered holders of Rights 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 (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share
of Common Stock shall be the closing price of one share
of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares
upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder
of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in
this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the
obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, 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 other Person as a result of its inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of
one two-hundredths of a share of Preferred Stock or any
other securities of the Company that may at any time be
issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected
and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged,
by the proper Person or Persons.
Section 19. Merger or Consolidation or Change
of Name of Rights Agent.
(a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate
trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement,
any of the Rights 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 Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person and the determination of Current Market
Price) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or
in any Rights Certificate; nor shall it be responsible
for any adjustment required under the provisions of
Section 11 or 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 Rights Certificates after actual
notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock or Preferred
Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized
and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of
the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with
its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds
or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise or transfer without
first consulting with the Company.
Section 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 Stock
and Preferred Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of
the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has
been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection
by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a legal business
entity organized and doing business under the laws of the
United States or of any State thereof, in good standing,
which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to
supervision or examination by federal or state authority
and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least
$25,000,000 or (b) an affiliate of a legal business
entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the
Board 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 Rights
Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion
or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of
Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would
create a significant risk of material adverse tax
consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such
Rights 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) The Board may, at its option, at any
time prior to the earlier of (i) the close of business on
the tenth day following the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior
to the Record Date, the close of business on the tenth
day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all 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"). Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired. The Company may, at
its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as
defined in Section 11(d)(i) hereof, of the Common Stock
at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the
Board ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and
without any further action and without any notice, the
right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held.
Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
(c) Notwithstanding the provisions of
Section 23(a) hereof, in the event that a majority of the
Board is elected by stockholder action by written
consent, or is comprised of persons elected at a meeting
of stockholders who were not nominated by the Board in
office immediately prior to such meeting, then for a
period of one hundred and eighty (180) days following the
effectiveness of such election the Rights shall not be
redeemed if such redemption is reasonably likely to have
the purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence
of a Triggering Event or a transaction with an Acquiring
Person.
Section 24. Exchange.
(a) The Board may, at its option, at any
time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section
7(e) hereof) for Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock then outstanding.
(b) Immediately upon the action of the
Board ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further
action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of
Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In any exchange pursuant to this
Section 24, the Company, at its option, may substitute
Preferred Stock (or Equivalent Preferred Stock, as such
term is defined in paragraph (b) of Section 11 hereof)
for Common Stock exchangeable for rights, at the initial
rate of one two-hundredth of a share of Preferred Stock
(or Equivalent Preferred Stock) for each Common Stock, as
appropriately adjusted to reflect stock splits, stock
dividends and other similar transactions after the date
hereof.
(d) In the event that there shall not be
sufficient Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to
authorize additional Common Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to
issue fractions of Common Stock or to distribute
certificates which evidence fractional Common Stock. In
lieu of such fractional Common Stock, there shall be paid
to the registered holders of the Right Certificates with
regard to which such fractional Common Stock would
otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole
Common Stock. For the purposes of this subsection (e),
the current market value of a whole Common Stock shall be
the closing price of a Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities,
rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect
any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) 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 transaction or a series of related transactions,
of more than fifty percent (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 complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants,
or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20)
days prior to the record date for determining holders of
the shares of Preferred Stock 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 shares of Preferred Stock whichever
shall be the earlier.
(b) In case any of the events set forth
in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the
Rights Agent) as follows:
Orion Capital Corporation
600 Fifth Avenue
New York, NY 10020-2302
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights 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 - 15th Floor
New York, New York 1001-2697
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior
to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the
approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution
Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights
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 Rights
Certificates; provided, from and after the Distribution
Date, this Agreement may not be supplemented or amended
to lengthen any time period hereunder, pursuant to clause
(iii) of this sentence unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common
Stock. Notwithstanding anything contained herein to the
contrary, this Agreement may not be amended at a time
when the Rights are not redeemable.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the
Board, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock
outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding shares of Common Stock 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. The Board
shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the
administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a
determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights
and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable
and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close
of business on the tenth day following the date of such
determination by the Board.
Section 32. Governing Law. This Agreement,
each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of
such State 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 their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ORION CAPITAL CORPORATION
By /s/ Michael P. Maloney
Michael P. Maloney
Vice President
CHASEMELLON SHAREHOLDER
SERVICES L.L.C.
By /s/ Raymond Poplasky
Name: Raymond Poplasky
Title: Relationship Manager
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES B JUNIOR
PARTICIPATING PREFERRED STOCK
OF
ORION CAPITAL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Michael P. Maloney, Vice President, General
Counsel and Secretary of Orion Capital Corporation, a
corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with
the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Restated Certificate of
Incorporation of the said Corporation, the said Board of
Directors on September 11, 1996, adopted the following
resolution creating a series of 1,000,000 shares of
Preferred Stock designated as Series B Junior Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation in accordance
with the provisions of its Restated Certificate of
Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other
special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series B Junior
Participating Preferred Stock" and the number of shares
constituting such series shall be 1,000,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of Series B Junior
Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior 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 business day of January, April, July and October in
each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Series B Junior
Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 200 times the aggregate per share
amount of all cash dividends, and 200 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, par value $1.00 per share, of
the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series
B Junior Participating Preferred Stock. In the event the
Corporation shall at any time after September 11, 1996 (the
"Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares
of Series B Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Junior Participating Preferred
Stock as provided in Paragraph (A) above immediately after
it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Series B Junior Participating
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series B Junior
Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares
of Series B Junior 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
Series B Junior 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. Dividends paid on the
shares of Series B Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares
of Series B Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares
of Series B Junior Participating Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Junior
Participating Preferred Stock shall entitle the holder
thereof to 200 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of
Series B Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by
multiplying such number 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 holders of shares of Series B Junior 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 Corporation.
(C)(i) If at any time dividends on any
Series B Junior Participating Preferred Stock
shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a
period (herein called a "default period") which
shall extend until such time when all accrued and
unpaid dividends for all previous quarterly
dividend periods and for the current quarterly
dividend period on all shares of Series B Junior
Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for
payment. During each default period, all holders
of Preferred Stock (including holders of the
Series B Junior Participating Preferred Stock)
with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a
class, irrespective of series, shall have the
right to elect two (2) Directors.
(ii) During any default period, such
voting right of the holders of Series B Junior
Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at
annual meetings of stockholders, provided that
such voting right shall not be exercised unless
the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred
Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall
exercise such voting right initially during an
existing default period, they shall have the
right, voting as a class, to elect Directors to
fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2)
Directors or, if such right is exercised at an
annual meeting, to elect two (2) Directors. If
the number which may be so elected at any special
meeting does not amount to the required number,
the holders of the Preferred Stock shall have the
right to make such increase in the number of
Directors as shall be necessary to permit the
election by them of the required number. After
the holders of the Preferred Stock shall have
exercised their right to elect Directors in any
default period and during the continuance of such
period, the number of Directors shall not be
increased or decreased except by vote of the
holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities
ranking senior to or pari passu with the Series B
Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred
Stock shall, during an existing default period,
have previously exercised their right to elect
Directors, the Board of Directors may order, or
any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock
outstanding, irrespective of series, may request,
the calling of special meeting of the holders of
Preferred Stock, which meeting shall thereupon be
called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant
to this Paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a
copy of such notice to him at his last address as
the same appears on the books of the Corporation.
Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days
after such order or request or in default of the
calling of such meeting within 60 days after such
order or request, such meeting may be called on
similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions
of this Paragraph (C)(iii), no such special
meeting shall be called during the period within
60 days immediately preceding the date fixed for
the next annual meeting of the stockholders.
(iv) In any default period, the holders
of Common Stock, and other classes of stock of the
Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have
exercised their right to elect two (2) Directors
voting as a class, after the exercise of which
right (x) the Directors so elected by the holders
of Preferred Stock shall continue in office until
their successors shall have been elected by such
holders or until the expiration of the default
period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore
elected by the holders of the class of stock which
elected the Director whose office shall have
become vacant. References in this Paragraph (C)
to Directors elected by the holders of a
particular class of stock shall include Directors
elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of
a default period, (x) the right of the holders of
Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected
by the holders of Preferred Stock as a class shall
terminate, and (z) the number of Directors shall
be such number as may be provided for in the
certificate of incorporation or by-laws
irrespective of any increase made pursuant to the
provisions of Paragraph (C)(ii) of this Section 3
(such number being subject, however, to change
thereafter in any manner provided by law or in the
certificate of incorporation or by-laws). Any
vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein, holders of Series
B Junior 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 taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series B Junior
Participating Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on
shares of Series B Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends on,
make any other distributions on, or redeem or
purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Participating
Preferred Stock;
(ii) declare or pay dividends on
or make any other distributions on any shares of
stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up)
with the Series B Junior Participating Preferred
Stock, except dividends paid ratably on the Series
B Junior Participating Preferred Stock and all
such parity stock on which dividends are payable
or in arrears in proportion to the total amounts
to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or
otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up)
with the Series B Junior Participating Preferred
Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire
for consideration any shares of Series B Junior
Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series B Junior
Participating Preferred Stock, except in
accordance with a purchase offer made in writing
or by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences of
the respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Paragraph
(A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series B Junior Participating Preferred Stock purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding
Up. (A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior
Participating Preferred Stock unless, prior thereto, the
holders of shares of Series B Junior Participating Preferred
Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such
payment (the "Series B Liquidation Preference"). Following
the payment of the full amount of the Series B Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series B Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i)
the Series B Liquidation Preference by (ii) 200 (as
appropriately adjusted as set forth in subparagraph (C)
below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the
Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Junior
Participating Preferred Stock and Common Stock,
respectively, holders of Series B Junior Participating
Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series B Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any,
which rank on a parity with the Series B Junior
Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation
preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number 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.
Section 7. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any
such case the shares of Series B Junior Participating
Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or
change of shares of Series B Junior 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.
Section 8. No Redemption. The shares of Series B
Junior Participating Preferred Stock shall not be
redeemable.
Section 9. Ranking. The Series B Junior
Participating Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless
the terms of such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate
of Incorporation of the Corporation shall not be further
amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series B
Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B
Junior Participating Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series B Junior
Participating Preferred Stock may be issued in fractions of
a share which shall entitle the holder, in proportion to
such holders fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series B
Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and
subscribed this Certificate and do affirm the foregoing as
true under the penalties of perjury this day of
September, 1996.
Michael P. Maloney
Vice President
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 11, 2006 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECOME AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.](1)
Rights Certificate
ORION CAPITAL 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 September 11, 1996 (the
"Rights Agreement"), between Orion Capital Corporation, a
Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services L.L.C., as Rights Agent (the "Rights
Agent"), to purchase from the Company at any time prior to
5:00 P.M. (New York time) on September 11, 2006 at the
office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one two-
hundredth of a fully paid, non-assessable share of Series B
Junior Participating Preferred Stock (the "Preferred Stock")
of the Company, at a purchase price of $200 per one two-
hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate
duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of September 11, 1996, based on the
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
___________________
1 The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
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 Rights 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 or (iii) under
certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, 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 and kind of shares of Preferred Stock
or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights
obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal office
or offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
one two-hundredths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate may be redeemed by
the Company at its option at a redemption price of $.01 per
Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement) and (ii) the Final
Expiration Date. The foregoing notwithstanding, the Rights
generally may not be redeemed for one hundred eighty (180)
days following a change in a majority of the Board as a
result of a proxy contest.
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than, except that the possible requirement
that prior to the occurrence of a Triggering Event only
whole shares of Preferred Stock be issued, fractions which
are integral multiples of one two-hundredth of a share of
Preferred Stock, 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 Rights Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any
other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of
a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends
or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of __________________
ATTEST: ORION CAPITAL CORPORATION
By
Secretary Title:
Countersigned:
CHASEMELLON SHAREHOLDER
SERVICES L.L.C.
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: __________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(a) this Rights Certificate [ ]is [ ] is not
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(b) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person
who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the
Rights Certificate.)
To: ORION CAPITAL CORPORATION:
The undersigned hereby irrevocably elects to
exercise _________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may
be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _____________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person
who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 11, 1996, the Board of Directors of
Orion Capital Corporation (the "Company") declared a
dividend distribution of one Right for each outstanding
share of Common Stock to stockholders of record at the close
of business on September 16, 1996 (the "Record Date"). Each
Right entitles the registered holder to purchase from the
Company one two-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), at a Purchase Price of $200,
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.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Stock
and a Distribution Date will occur upon the earlier of (i)
ten (10) days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date"), other than as a result of repurchases of stock by
the Company or certain inadvertent actions by institutional
or certain other stockholders, or (ii) ten (10) business
days (or such later date as the Board shall determine)
following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially
owning fifteen percent (15%) or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented
by such certificate. Pursuant to the Rights Agreement, the
Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised
so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the
Distribution Date and will expire at the close of business
on September 11, 2006, unless earlier redeemed or exchanged
by the Company as described below.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board, only shares of Common
Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that a Person becomes an Acquiring
Person (except pursuant to an offer for all outstanding
shares of Common Stock that the independent directors
determine not to be inadequate and to otherwise be in the
best interests of the Company and its stockholders), each
holder of a Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all
Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are
not exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $200 per
Right, each Right not owned by an Acquiring Person (or by
certain related parties) following an event set forth in the
preceding paragraph would entitle its holder to purchase
$400 worth of Common Stock (or other consideration, as noted
above) for $200. Assuming that the Common Stock had a per
share value of $50 at such time, the holder of each valid
Right would be entitled to purchase 8 shares of Common Stock
for $200.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction (other than a merger
which follows an offer described in the second preceding
paragraph), or (ii) fifty percent (50%) or more of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the
exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person or group
of fifty percent (50%) or more of the outstanding Common
Stock, the Board may exchange the Rights (other than Rights
owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of
Common Stock, or one two-hundredth of a share of Preferred
Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
Generally, at any time until ten (10) days
following the Stock Acquisition Date, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board). Immediately upon the
action of the Board ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price. The
foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty (180) days following a
change in a majority of the Board as a result of a proxy
contest.
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 or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set
forth above.
Any of the provisions of the Rights Agreement may
be amended by the Board prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any
ambiguity, to make changes which do not adversely affect the
interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement; provided,
however, that no amendment may be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Current Report on Form 8-K. A copy of the Rights Agreement
is available free of charge from the Company. This summary
description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
