SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 19, 1996
Date of earliest
event reported: December 12, 1996
Owens Corning
A Delaware Corporation
Commission File No. 1-3660 IRS Employer Identification
No. 34-4323452
One Owens Corning Parkway, Toledo, Ohio 43659
Telephone No. (419) 248-8000
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ITEM 5. OTHER EVENTS
(a) Issuance of Rights.
On December 12, 1996, the Board of Directors of
Owens Corning (the "Registrant") declared a dividend of one
Right for each outstanding share of common stock, $.10 par
value per share (the "Common Stock") of the Registrant. The
Rights will be issued on December 30, 1996 to the
stockholders of record on December 30, 1996 and will expire
in ten years, subject to earlier redemption. Under certain
circumstances, each Right entitles the registered holder to
purchase from the Registrant one one-hundredth of a share of
Series A Participating Preferred Stock, no par value
("Preferred Stock"), of the Registrant or, in certain circum
stances, either Common Stock or common stock of an acquiring
company at one-half the market price of such Common Stock or
common stock, as the case may be. The Rights are designed
to make it more likely that all the Registrant's
stockholders receive fair and equal treatment in the event
of any proposed takeover of the Registrant and to guard
against the use of partial tender offers or other coercive
tactics to gain control of the Registrant. The description
and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Registrant and The
Chase Manhattan Bank, as Rights Agent (the "Rights Agent").
Exercise Price
When exercisable, except as set forth below, each
Right entitles the registered holder to purchase from the
Registrant one one-hundredth of a share of Preferred Stock,
at a price of $190 per one one-hundredth of a share (the
"Purchase Price"), subject to adjustment in certain
circumstances.
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Transfer and Detachment
Until the "Distribution Date," which is the
earlier to occur of (i) ten business days following the time
(the "Stock Acquisition Time") of a public announcement or
notice to the Registrant that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial
ownership (as defined in the Rights Agreement) of 15% or
more of the outstanding shares of Common Stock of the
Registrant, and (ii) ten business days, or such later date
as may be determined by the Board of Directors of the
Registrant, after the date of the commencement or
announcement by a person of an intention to make a tender
offer or exchange offer for an amount of Common Stock which,
together with the shares of such stock already owned by such
person, constitutes 15% or more of the outstanding shares of
such Common Stock, the Rights will be evidenced, with
respect to any of the Registrant's Common Stock certificates
outstanding as of December 30, 1996, by such Common Stock
certificate with a copy of a Summary of Rights attached
thereto. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and
only with the Registrant's Common Stock. Until the
Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after
December 30, 1996, upon the transfer or issuance of new
shares of Common Stock, will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the
Registrant's Common Stock certificates outstanding as of
December 30, 1996, even without a copy of the Summary of
Rights attached thereto, will also constitute the transfer
of the Rights associated with the shares of Common Stock
represented by such certificate.
As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution
Date, and such separate Right Certificates alone will
evidence the Rights.
Exercisability
The Rights are not exercisable until the Dis
tribution Date. The Rights will expire on December 30, 2006
unless earlier redeemed by the Registrant.
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Right to Acquire Stock at Half Price
In the event that after the Stock Acquisition
Time, the Registrant is acquired in a merger or other
business combination transaction or 50% or more of the
Registrant's assets, cash flow or earning power are sold or
otherwise transferred, the Rights Agreement provides that
proper provision shall be made so that each holder of a
Right, upon the exercise thereof at the then current
exercise price of the Right, shall thereafter be entitled to
receive that number of shares of common stock of the
acquiring company which at the time of such transaction
would have a market value (as defined in the Rights
Agreement) of two times the exercise price of the Right. In
the event that the Registrant is the surviving corporation
of a merger and its Common Stock is changed or exchanged,
proper provision shall be made so that each holder of a
Right will thereafter have the right to receive upon
exercise that number of shares of common stock of the other
party to the transaction having a market value of two times
the exercise price of the Right.
In the event that a person or group becomes an
Acquiring Person (otherwise than pursuant to a tender offer
or exchange offer for all outstanding shares of Common Stock
at a price and on terms which are determined to be fair and
in the best interests of the Registrant and its stockholders
by a majority of the members of the Board of Directors of
the Registrant who are not Acquiring Persons or
representatives or nominees of or affiliated or associated
with an Acquiring Person), proper provision shall be made so
that each holder of a Right, other than Rights that were
beneficially owned by the Acquiring Person, which will
thereafter be void, will thereafter have the right to
receive upon exercise that number of shares of Common Stock
having a market value (as defined in the Rights Agreement)
of two times the exercise price of the Right. A person or
group will not be deemed to be an Acquiring Person if the
Board of Directors of the Registrant determines that such
person or group became an Acquiring Person inadvertently and
such person or group promptly divests itself of a sufficient
number of shares of Common Stock so that such person or
group is no longer an Acquiring Person.
Adjustments
The Purchase Price payable and the number of
shares of Preferred Stock or other securities or property
issuable upon the exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on or a subdivision, combination
or reclassification of the shares of Preferred Stock,
(ii) upon the fixing of a record date for the issuance to
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holders of Preferred Stock of certain rights, options or
warrants to subscribe for shares of Preferred Stock or
convertible securities at less than the current market price
of shares of Preferred Stock or (iii) upon the fixing of a
record date for the making of a distribution to holders of
shares of Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends not
exceeding 125% of the last regular periodic cash dividend or
dividends payable in shares of Preferred Stock) or of sub
scription rights or warrants (other than those referred to
above). The number of Rights and the number of shares of
Preferred Stock issuable upon exercise of each Right are
also subject to adjustment in the case of a stock split,
combination or stock dividend on the shares of Common Stock
prior to the Distribution Date.
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in the Purchase Price.
No fractional shares of Common Stock will be issued and, in
lieu thereof, an adjustment in cash will be made based on
the market value of shares of Common Stock on the last
trading date prior to the date of exercise.
Redemption or Exchange
At any time prior to the earlier of (i) the Stock
Acquisition Time and (ii) December 30, 2006, the Registrant,
by resolution of its Board of Directors, may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors of the Registrant electing to
redeem the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person of 50% or
more of the outstanding Common Stock of the Registrant, the
Board of Directors of the Registrant, may exchange the
Rights (other than Rights beneficially owned by such person
which have become void), in whole or in part, for Common
Stock of the Registrant at an exchange ratio of one share of
Common Stock per Right (subject to adjustment). The
Registrant may at its option substitute shares of Preferred
Stock (or other series of substantially similar preferred
stock of the Registrant) for some or all of the shares of
Common Stock exchangeable for Rights, at an exchange ratio
of one one-hundredth of a share of Preferred Stock (or such
other series of preferred stock) for each share of Common
Stock to be exchanged.
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Preferred Stock
The shares of Preferred Stock purchasable upon
exercise of the Rights will be nonredeemable and junior to
any other series of preferred stock the Registrant may issue
(unless otherwise provided in the terms of such preferred
stock or in the Registrant's Certificate of Incorporation).
Each share of Preferred Stock will be entitled to receive,
in the aggregate, a dividend in an amount equal to 100 times
the dividend per share of Common Stock, or, if greater,
$10.00 per year. In the event of liquidation, the holders
of shares of Preferred Stock will be entitled to receive a
minimum liquidation payment equal to the greater of $10.00
per share or an amount equal to 100 times the amount to be
paid in liquidation per share of Common Stock. Each share
of Preferred Stock will have 100 votes, voting together with
the shares of Common Stock. In addition, if dividends on
the Preferred Stock are in arrears for six consecutive
quarterly payment periods, the holders of the shares of
Preferred Stock will have the right, voting as a class, to
elect two members to the Board of Directors of the
Registrant. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to
receive 100 times the amount and type of consideration
received per share of Common Stock. The rights of the
shares of Preferred Stock as to dividends and liquidation,
and in the event of mergers and consolidations, are
protected by antidilution provisions.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the
Registrant, including, without limitation, the right to vote
or to receive dividends.
Amendment
The Rights and the Rights Agreement can be amended
by the Board of Directors of the Registrant in any respect
(including, without limitation, any extension of the period
in which the Right Certificates may be redeemed) at any time
prior to the Stock Acquisition Time. From and after such
time, without the approval of the stockholders of the
Registrant or the holders of the Rights, the Board of
Directors may only supplement or amend the Rights Agreement
in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained in the Rights Agreement
which may be defective or inconsistent with any other
provision in the Rights Agreement, (iii) to shorten or
lengthen any time period under the Rights Agreement or
(iv) to make any changes or supplements which the Registrant
may deem necessary or desirable which shall not adversely
<PAGE>
affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an affiliate or associate
of any such person), provided that any such action by the
Board of Directors must have the concurrence of a majority
of the Continuing Directors (as defined in the Rights
Agreement) and provided that the Continuing Directors
constitute a majority of directors then in office, and
provided that the Rights Agreement may not be supplemented
or amended to lengthen (A) a time period relating to when
the Rights may be redeemed or to modify the ability (or
inability) of the Registrant's board of directors to redeem
the Rights, in either case at such time as the Rights are
not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or
clarifying the Rights of or the benefits to the holders of
Rights (other than an Acquiring Person or an affiliate or
associate of any such person).
Issuance of Rights
Each outstanding share of Common Stock on December
30, 1996 will receive one Right. As long as the Rights are
attached to the shares of Common Stock, the Registrant will
issue one Right with each share of Common Stock it issues,
so that all such shares have attached Rights. 400,000
shares of Preferred Stock have been reserved for issuance
upon exercise of the Rights.
Rights Agreement
A copy of the Rights Agreement, which includes as
Exhibit B the form of Right Certificate, is attached hereto
as Exhibit 1 and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its
entirety by reference to such Exhibit.
ITEM 7. EXHIBITS
1. Rights Agreement between the Registrant and
The Chase Manhattan Bank, Rights Agent, dated
as of December 12, 1996, which includes as
Exhibit B the form of Right Certificate.
2. Form of a letter to the Registrant's
stockholders.
3. Press Release issued by the Registrant on
December 12, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereto duly authorized.
OWENS CORNING
(Registrant)
By /s/ David W. Devonshire
Name: David W. Devonshire
Title: Senior Vice President and
Chief Financial Officer
DATE: December 19, 1996
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1. Rights Agreement between
the Registrant and The
Chase Manhattan Bank,
Rights Agent, dated as of
December 12, 1996, which
includes as Exhibit B the
form of Right Certifi
cate.
2. Form of a letter to the
Registrant's stock
holders.
3. Press Release issued by
the Registrant on
December 12, 1996.
Exhibit 1
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of December 12,
1996 (the "Agreement"), between Owens Corning, a Delaware
corporation (the "Company"), and The Chase Manhattan Bank
(the "Rights Agent"),
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one Right (as herein
after defined) for each share of Common Stock, par value
$.10 per share, of the Company outstanding at the Close of
Business (as hereinafter defined) on December 30, 1996 (the
"Record Date"), each Right representing the right to pur
chase one one-hundredth (1/100th) of a share of Series A Par
ticipating Preferred Stock, with no par value, of the
Company having the rights and preferences set forth in the
Certificate of Designation attached hereto as Exhibit A, and
has further authorized the issuance of one Right with
respect to each share of Common Stock of the Company that
shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Expiration Date and
the Final Expiration Date (as such terms are hereinafter
defined);
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 15% or
more of the shares of Common Stock of the Company then
outstanding, but shall not include any employee benefit
plan of the Company or any Subsidiary of the Company or
any Person organized, appointed or established by the
Company or such Subsidiary for or pursuant to the terms
of any such employee benefit plan. Notwithstanding the
foregoing:
(i) no Person shall become an "Acquiring
Person" as the result of an acquisition of shares
of Common Stock by the Company which, by reducing
the number of shares of Common Stock outstanding,
increases the proportionate number of shares Bene
ficially Owned by such Person to 15% or more of
the shares of Common Stock of the Company then
outstanding, provided, however, that if a Person
shall become the Beneficial Owner of 15% or more
of the shares of Common Stock of the Company by
reason of share purchases by the Company and
shall, after such share purchases by the Company,
at a time when such Person Beneficially Owns 15%
or more of the Common Stock, become the Beneficial
Owner of any additional shares of Common Stock of
the Company, then such Person shall be deemed to
be an "Acquiring Person";
(ii) if the Board of Directors of the Com
pany determines in good faith that a Person who
would otherwise be an "Acquiring Person" has be
come such inadvertently (including, without limi
tation, because (A) such Person was unaware that
he or it Beneficially Owned a percentage of Common
Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware
of the extent of his or its Beneficial Ownership
but had no actual knowledge of the consequences of
such Beneficial Ownership under this Agreement)
and without any intention of changing or influenc
ing control of the Company, and if such Person as
promptly as practicable divested or divests
himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so
that such Person would no longer be an "Acquiring
Person", then such Person shall not be deemed to
be or to have become an "Acquiring Person" for any
purposes of this Agreement; and
(iii) no Person shall become an "Acquiring
Person" by virtue of ownership of Common Stock of
the Company by any Affiliate and/or Associate of
such Person, which Affiliate and/or Associate is
deemed to be an Affiliate and/or Associate of such
Person solely by reason of such Affiliate and/or
Associate being a director or officer of the Com
pany.
(b) "Adjustment Shares" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate", when used with
reference to any Person, 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 (the "Exchange Act"),
as in effect on the Record Date.
(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 vote or dispose of,
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 if the agreement, arrangement or
understanding to vote such security (1) arises
solely from a revocable proxy given to such Person
in response to a public proxy or consent solicita
tion made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Sched
ule 13D under the Exchange Act (or any comparable
or successor report);
(ii) which such Person or any of such
Person's Affiliates or Associates has the right to
acquire (whether such right is exercisable immedi
ately or only after the passage of time) pursuant
to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or
otherwise, provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to bene
ficially own, (A) securities tendered pursuant to
a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange, or (B) secu
rities issuable upon exercise of Rights at any
time prior to the occurrence of either a Section
11(a)(ii) Event or a Section 13 Event, or
(C) securities issuable upon exercise of Rights
from and after the occurrence of either a Section
11(a)(ii) Event or a Section 13 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 pur
suant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original
Rights; or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affili
ate 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 subparagraph (i)
of this paragraph (d)) or disposing of any securi
ties of the Company in a manner that relates or is
reasonably likely potentially to relate to influ
encing the control or management of the Company;
provided, however, that nothing in this paragraph (d)
shall cause a person engaged in business as an under
writer 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
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 institu
tions in the State of Ohio are authorized or obligated
by law or executive order to close.
(f) "Certificate of Designation" shall mean the
Certificate of Designation of Junior Participating
Cumulative Preferred Stock setting forth the powers,
preferences, rights, qualifications, limitations and
restrictions of such series of preferred stock of the
Company, a copy of which is attached hereto as Exhibit
A.
(g) "Close of Business" on any given date shall
mean 5:00 P.M., New York, New York time, on such date;
provided, however, that if such date is not a Business
Day, it shall mean 5:00 P.M., New York, New York time,
on the next succeeding Business Day.
(h) "Common Stock" when used with reference to
the Company shall mean the Common Stock, par value $.10
per share, of the Company. "Common Stock" when used
with reference to any Person other than the Company
which is organized in corporate form shall mean the
capital stock with the greatest voting power, or the
equity securities or other equity interest having power
to control or direct the management, of such Person,
or, if such Person is a Subsidiary of another Person,
the capital stock with the greatest voting power of the
Person which ultimately controls such first-mentioned
Person. "Common Stock" when used with reference to any
Person which is not organized in corporate form shall
mean units of beneficial interest which (i) shall
represent the right to participate generally in the
profits and losses of such Person (including, without
limitation, any flow-through tax benefits resulting
from an ownership interest in such Person) and which
(ii) shall be entitled to exercise the greatest voting
power of such Person or, in the case of a limited
partnership, shall have the power to remove the general
partner or partners.
(i) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(j) "Company" shall have the meaning set forth in
the first paragraph of this Agreement.
(k) "Continuing Director" shall mean any member
of the Board of Directors of the Company (while such
person is a member of such Board of Directors) who
either (i) was a member of such Board of Directors
prior to the Stock Acquisition Time or (ii) is not an
Acquiring Person, an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate,
and after the Stock Acquisition Time became a member of
such Board of Directors, and whose nomination for
election or election thereto was recommended or
approved by a majority of the Continuing Directors then
on such Board of Directors.
(l) "Current Market Price" shall have the meaning
set forth in Section 11(d) hereof.
(m) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning
specified in Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the
meaning set forth in Section 11(b) hereof.
(p) "Expiration Date" shall have the meaning
specified in Section 7(a) hereof.
(q) "Final Expiration Date" shall have the mean
ing specified in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in
Section 11(d) hereof.
(s) "Outside Directors" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(t) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity, and
shall include any successor (by merger or otherwise) of
such entity.
(u) "Preferred Stock" shall mean shares of Series
A Participating Preferred Stock, no par value, of the
Company, having the rights, preferences and limitations
set forth in the Certificate of Designation attached to
this Agreement as Exhibit A, and, to the extent there
are not a sufficient number of shares of Series A
Participating Preferred Stock authorized to permit the
full exercise of the then outstanding Rights, any other
series of preferred stock of the Company designated for
such purpose by the Board of Directors of the Company
containing terms substantially similar to the terms of
the Series A Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(x) "Record Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this
Agreement.
(y) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(z) "Right" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(aa) "Right Certificate" shall have the meaning
set forth in Section 3(a) hereof.
(bb) "Rights Agent" shall have the meaning set
forth in the first paragraph of this Agreement.
(cc) "Section 11(a)(ii) Event" shall have the
meaning set forth in Section 11(a)(ii) hereof.
(dd) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(ee) "Section 13 Event" shall have the meaning
set forth in Section 13(a) hereof.
(ff) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(gg) "Stock Acquisition Time" shall mean the time
of occurrence of whichever of the following first oc
curs: (i) the first public announcement by the Company
or an Acquiring Person that the Acquiring Person has
become such, or (ii) the communication to the Company
(including, without limitation, to the directors of the
Company) of any notice (including, without limitation,
any written consent or notice related thereto) from an
Acquiring Person indicating or reflecting that the
Acquiring Person has become such.
(hh) "Subsidiary" shall mean, with respect to any
Person, any corporation or other entity of which secu
rities or other ownership interests having ordinary
voting power sufficient, in the absence of contin
gencies, to elect a majority of the board of directors
or other persons performing similar functions are at
the time beneficially owned, directly or indirectly, by
such Person or otherwise controlled by such Person.
(ii) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(jj) "Summary of Rights" shall have the meaning
set forth in Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set
forth in Section 11(d) hereof.
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 appoint
ment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. Any
actions which may be taken by the Rights Agent pursuant to
the terms of this Agreement may be taken by any such
Co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of the Close of Business on (i) the
tenth Business Day after the Stock Acquisition Time, or (ii)
the tenth Business Day, or such specified or unspecified
later date as may be determined by action of the Board of
Directors of the Company, after the date of the commencement
of (as determined by reference to Rule 14d-2(a), as in ef
fect under the Exchange Act on the Record Date), or first
public announcement of the intent of any Person (other than
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any Person organized, appointed or established
by the Company or such Subsidiary as a fiduciary pursuant to
the terms of any such employee benefit plan) to commence
(which intention to commence remains in effect for five
Business Days after such announcement), a tender or exchange
offer for an amount of Common Stock of the Company which,
together with the shares of such stock already beneficially
owned by such Person, constitutes 15% or more of the
outstanding Common Stock of the Company (including any such
date which is after the date of this Agreement and prior to
the issuance of the Rights) (the earlier of such dates
described in clauses (i) and (ii) above being herein
referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for shares of Common
Stock registered in the names of the holders of Common Stock
(which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate Right
Certificates, and (y) the right to receive Right Certifi
cates will be transferable only in connection with the
transfer of the underlying Common Stock. As soon as
practicable after the Distribution Date, the Rights Agent
will send, by first class, insured, postage-prepaid mail, to
each record holder of 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, a Right Cer
tificate, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided
herein and to the provisions of Section 14(a) hereof. As of
the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Stock, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"),
to each record holder of Common Stock as of the Close of
Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record
Date, until the earlier of the Distribution Date or the
Expiration Date, the Rights will be evidenced by such
certificates for Common Stock registered in the names of the
holders of Common Stock with a copy of the Summary of Rights
attached thereto. Until the earliest of the Distribution
Date, the Expiration Date and the Final Expiration Date, the
surrender for transfer of any of the certificates for Common
Stock outstanding on the Record Date, with or without a copy
of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(c) Certificates for Common Stock issued (or
delivered from the Company's treasury) after the Record Date
but prior to the earliest of the Distribution Date, the
Expiration Date and the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between the Company and The Chase
Manhattan Bank dated as of December 12, 1996 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal executive
offices of the Company. Under certain
circumstances, as set forth in the Rights Agree
ment, such Rights will be evidenced by separate
certificates and will no longer be evidenced by
this certificate. The Company will mail to the
holder of this certificate a copy of the Rights
Agreement without charge promptly after receipt of
a written request therefor. Under certain cir
cumstances set forth in the Rights Agreement,
Rights beneficially owned by an Acquiring Person
or any Associate or Affiliate thereof (as such
terms are defined in the Rights Agreement) will
become null and void. The Rights shall not be
exercisable, and shall be void so long as held, by
a holder in any jurisdiction where the requisite
qualification for the issuance to such holder, or
the exercise by such holder of the Rights in such
jurisdiction, shall not have been obtained or be
obtainable.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Stock represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also consti
tute the transfer of the Rights associated with the Common
Stock represented by such certificates.
Section 4. Form of Right Certificates. (a) The
Right Certificates (and the forms of election to purchase
shares, certification and assignment to be printed on the
reverse thereof) shall be substantially in the form set
forth in Exhibit B hereto and may have such marks of identi
fication or designation and such legends, summaries or en
dorsements printed thereon as the Company may deem appro
priate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11
and 22 hereof, the Right Certificates, whenever distributed,
which are distributed in respect of shares of Common Stock
which were issued and outstanding as of the Record Date,
shall be dated as of the Record Date, and all Right Certifi
cates which are distributed in respect of other shares of
Common Stock shall be dated as of the respective dates of
issuance of such Common Stock, and in each such case on
their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred
Stock as shall be set forth therein at the price per one one-
hundredth of a share of Preferred Stock set forth therein
(the "Purchase Price"), but the number and type of secu
rities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as
provided in this Agreement.
(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Asso
ciate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affili
ate) 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 trans
feree 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 under
standing regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding (whether or
not in writing) which has as a primary purpose or effect the
avoidance of the provisions of Section 7(e), Sec
tion 11(a)(ii) or of Section 13 hereof with respect to the
limitation of the Rights beneficially owned by an Acquiring
Person (or any Associate or Affiliate thereof), and any
Right Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend
modified as necessary to apply to such Person:
The Rights represented by this Certificate are or
were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in
the Rights Agreement). Accordingly, this Certifi
cate 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 Right Certificates shall be executed on behalf of
the Company manually or by facsimile signature by the Chair
man of the Board, the President or any Vice President and
have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or any As
sistant Secretary, either manually or by facsimile signa
ture. The Right Certificates shall be countersigned by the
Rights Agent manually and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before counter
signature by the Rights Agent and issuance and delivery by
the Company, such Right 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 Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office
in New York, New York, books for registration and transfer
of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date and
certificate number of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates. (a) Subject to the provi
sions of Sections 4(b) and 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Expiration
Date and the Final Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certifi
cates, entitling the registered holder to purchase a like
number of shares of Preferred Stock (or other securities,
cash, and/or assets, as the case may be) as the Right Cer
tificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certifi
cate shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate appro
priately executed, at the principal office of the Rights
Agent in New York, New York. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right
Certificate or Right Certificates until the registered
holder shall have completed and signed the certificate con
tained in the form of assignment on the reverse side of such
Right Certificate or Right Certificates and shall have pro
vided such additional evidence of the identity of the Bene
ficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall countersign and deliver to
the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The
Company may require payment 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 any
Right 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 Right Certifi
cate, and, in case of loss, theft or destruction, of indem
nity or security reasonably satisfactory to them, and, if
requested by the Company, reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancel
lation of the Right Certificate if mutilated, the Company
will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for counter-signature and delivery
to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e)
hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certificate on the
reverse side thereof duly executed, to the Rights Agent at
the principal office of the Rights Agent in New York, New
York, together with payment of the Purchase Price for each
one one-hundredth of a share of Preferred Stock as to which
the Rights are exercised, at or prior to the earliest of (i)
the Close of Business on December 30, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, (iii) the time at
which the Rights are exchanged as provided in Section 23A
hereof, or (iv) the time at which the Rights expire pursuant
to Section 13(d) hereof (the earliest of such times being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth
of a share of Preferred Stock issued pursuant to the exer
cise of a Right shall initially be $190, shall be subject to
adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate repre
senting exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by pay
ment (by certified check or bank draft payable to the order
of the Company) of the Purchase Price for the Preferred
Stock (or other shares, securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
the Rights pursuant hereto in cash, or by certified check or
bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k) hereof, (i)(A) prompt
ly requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the trans
fer agent) certificates for the number of shares of Pre
ferred Stock to be purchased (and the Company hereby irrevo
cably authorizes its transfer agent to comply with all such
requests), or (B) if the Company shall have elected to de
posit 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 one-hundredths of a
share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock repre
sented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby
directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and
(iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obli
gated to issue other securities 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.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evid
enced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized
assigns, 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 Sec
tion 11(a)(ii) Event, any Rights beneficially owned by (i)
an Acquiring Person or an Associate or Affiliate of an Ac
quiring Person, (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after such Acquiring Person becomes such, or
(iii) a transferee of any such Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Per
son to holders of equity interests in such Acquiring Person
or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect 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 ensure that the provisions of this Section 7(e) and Sec
tion 4(b) hereof are complied with, but shall have no lia
bility to any holder of Right Certificates or any other
Person as a result of its failure to make any determination
with respect to an Acquiring Person or any of its respective
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 reg
istered holder of any Right Certificate upon the occurrence
of any purported transfer or exercise as set forth in this
Section 7 unless such registered holder shall have (i) com
pleted and signed the certificate following the form of
assignment or election to purchase set forth on the reverse
side of the Right Certificate surrendered for such assign
ment or exercise, and (ii) provided such additional evidence
of the identity of the Beneficial Owner (or former Benefi
cial Owner) or Affiliates or Associates thereof as the Com
pany shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancella
tion or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly per
mitted 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 Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates
to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof
to the Company.
Section 9. Reservation and Availability of Capi
tal 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 or any
authorized and issued shares of Preferred Stock held in its
treasury (and will use its best efforts, following the oc
currence of a Section 11(a)(ii) Event, to cause to be re
served and kept available out of its authorized and unissued
shares of Common Stock and/or other securities or out of its
authorized and issued shares of Common Stock and/or other
securities held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Section
11(a)(ii) Event, Common Stock and/or other securities) that
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) 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, or as soon as is required by
law following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to the securities purchas
able 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 Expi
ration Date. 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 con
nection with the exercisability of the Rights. The Company
may, acting by resolution of its Board of Directors,
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(b), 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 tem
porarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwith
standing any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction
shall have been obtained.
(c) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
one one-hundredths of a share of Preferred Stock (and, fol
lowing the occurrence of a Section 11(a)(ii) 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 shares.
(d) 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 Right Certifi
cates or of any shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, how
ever, be required to pay any transfer tax which may be pay
able in respect of any transfer or delivery of Right Certi
ficates to a person other than, or the issuance or delivery
of certificates or depositary receipts for a number of one
one-hundredths of a share of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be),
in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates for shares of Pre
ferred Stock (or Common Stock and/or other securities, as
the case may be) or depositary receipts for Preferred Stock
upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no
such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
one-hundredths of a share of Preferred Stock (or shares of
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 shares of
Preferred Stock (or shares of 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
Right Certificate evidencing such Rights was duly surren
dered and payment of the Purchase Price (and any 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 shares of Common Stock and/or other
securities, as the case may be) transfer books of the Com
pany are closed, such person shall be deemed to have become
the record holder of such shares (fractional and otherwise)
on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exer
cise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, 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 meetings
or other 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, or fractions thereof, covered
by each Right and the number of Rights outstanding are sub
ject 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 into a greater
number of shares, (C) combine or consolidate the outstanding
Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassifica
tion of the Preferred Stock (including any such reclassifica
tion in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation),
except as otherwise provided in Section 7(e) hereof and this
Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date
of such subdivision, 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,
he 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 adjust
ment under both Section 11(a)(i) and Section 11(a)(ii) here
of, 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 (a "Section 11(a)(ii) Event")
that any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
Section 13 Event or is an acquisition of Common Stock of the
Company pursuant to a tender or exchange offer for all out
standing Common Stock of the Company at a price and on terms
determined by at least a majority of the members of the
Board of Directors of the Company who are not Acquiring
Persons or representatives, nominees, Affiliates or Associ
ates of an Acquiring Person (the "Outside Directors"), after
receiving advice from one or more investment banking firms,
to be (A) at a price which is fair to stockholders (taking
into account all factors which such Outside Directors deem
relevant, including, without limitation, prices which could
reasonably be achieved if the Company or its assets were to
be sold on an orderly basis designed to realize maximum
value) and (B) otherwise in the best interests of the Com
pany and its stockholders, then 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 following the Dis
tribution Date at the then current Purchase Price in accor
dance with the terms of this Agreement, in lieu of a number
of one-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-hundredths of a share of
Preferred Stock for which a Right was exercisable immediate
ly prior to the first occurrence of such Section 11(a)(ii)
Event, whether or not such Right was then exercisable, and
(y) dividing that product (which, following such first oc
currence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agree
ment) by 50% of the Current Market Price per share of the
Common Stock of the Company (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such Section
11(a)(ii) Event (such number of shares being hereinafter
referred to as the "Adjustment Shares"). The Company shall
notify the Rights Agent as to any Persons who are deemed by
the Company to be Acquiring Persons or Associates, Affili
ates or transferees (as described in subparagraphs (ii) and
(iii) of Section 7(e) hereof) of such Persons and shall
identify any Rights pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of
the Company in accordance with Section 11(a)(ii) hereof, the
Company, acting by resolution of its Board of Directors
(which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors), may
(and, in the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incor
poration but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Company, act
ing by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall): (A)
determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current
Value"), over (2) the Purchase Price attributable to each
Right (such excess, the "Spread") and (B) with respect to
each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limita
tion, shares, or units of shares, of preferred stock which
the Board of Directors of the Company (with the concurrence
of a majority of the Continuing Directors) has deemed to
have the same value as shares of Common Stock of the Company
(such shares or units of preferred stock hereinafter called
"Common Stock Equivalents")), (4) debt securities of the Com
pany, (5) other assets, or (6) any combination of the fore
going having an aggregate value equal to the Current Value,
where such aggregate value has been determined by action of
the Board of Directors of the Company (with the concurrence
of a majority of the Continuing Directors) based upon the
advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company which has
theretofore performed no services for the Company or any Sub
sidiary of the Company in the past five years; provided,
however, 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 first
date that the right to redeem the Rights pursuant to Section
23 hereof, as such date may be amended pursuant to Section
26 hereof, shall expire (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 of the
Company (to the extent available) and then, if necessary,
cash, securities and/or assets, that in the aggregate have a
value equal to the Spread. If, after the occurrence of a
Section 11(a)(ii) Event, the number of shares of Common
Stock that are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not
sufficient to permit exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof and the Company,
acting by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall determine in
good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the 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 period as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action is to be taken pursuant to the terms of this
Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder
approval for the authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to the first sentence of this Section 11(a)(iii)
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 the Common Stock shall be the Current Market Price per
share of Common Stock (as determined pursuant to Section
11(d) hereof) on the date of the first occurrence of the Sec
tion 11(a)(ii) Event, and the per share or per unit value of
any Common Stock Equivalents shall be deemed to equal the
Current Market Price per share of the Common Stock of the
Company on such date.
(b) In the event that the Company shall fix a
record date for the issuance of rights, options or warrants
to all holders of shares of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock
(or shares having the same rights, privileges and prefer
ences as the shares of Preferred Stock ("Equivalent Prefer
ence Stock")) or securities convertible into shares of Pre
ferred Stock or Equivalent Preference Stock at a price per
share of Preferred Stock or Equivalent Preference Stock (or
having a conversion price per share, if a security convert
ible into shares of Preferred Stock or Equivalent Preference
Stock) less than the Current Market Price per share of the
Preferred Stock (as defined in Section 11(d) hereof) on such
record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date
plus the number of additional shares of Preferred Stock
and/or Equivalent Preference Stock which the aggregate of
fering price of the total number of such shares so to be
offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase
at such Current Market Price, and 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 Preference Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially con
vertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as de
termined in good faith by the Board of Directors of the
Company (with the concurrence of a majority of the
Continuing Directors), whose determination shall be de
scribed in a statement filed with the Rights Agent. Pre
ferred 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, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of Preferred
Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebt
edness or assets (other than a regular periodic cash divi
dend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or a divi
dend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) here
of), 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 frac
tion, the numerator of which shall be the Current Market
Price per share of Preferred Stock (as defined in Section
11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Board of Directors
of the Company, with the concurrence of a majority of the
Continuing Directors, whose determination shall be described
in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the
denominator of which shall be such Current Market Price 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 again be adjusted to be the Purchase
Price which would then be in effect if such record date had
not been fixed.
(d)(i) For the purpose of any computation here
under, the "Current Market Price" per share of Common Stock
on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter de
fined) immediately prior to such date; provided, however,
that in the event that the Current Market Price per share of
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (a) a
dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into
such Common Stock or (b) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification, as the case
may be, then, and in each such case, the "Current Market
Price" shall be appropriately adjusted to take into account
the 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 clos
ing 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 con
solidated transaction reporting system with respect to secu
rities 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 Securi
ties 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 organiza
tion, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in
shares of Common Stock selected by the Company, acting by
resolution of the Board of Directors of the Company (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors). If on any such date
no market maker is making a market in shares of Common
Stock, the fair value of such shares on such date as
determined in good faith by the Company, acting by reso
lution of the Board of Directors of the Company (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), 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 but are quoted on NASDAQ, a day on which
NASDAQ is in operation or if the shares of Common Stock are
neither listed or admitted to trading on any national secu
rities exchange nor quoted on NASDAQ, a Business Day. If
the current per share market price of the Common Stock can
not be determined in the manner provided above, or if the
Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share of Common Stock
shall mean the fair value per share as determined in good
faith by the Company, acting by resolution of the Board of
Directors of the Company (which resolution shall be
effective only with the concurrence of a majority of the
Continuing Directors), 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 for the
Common Stock in Section 11(d)(i) hereof (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 Section 11(d)(i)
hereof, the "Current Market Price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitaliza
tions 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, the "Current Market Price" per share of Preferred
Stock shall mean the fair value per share as determined in
good faith by the Company, acting by resolution of its Board
of Directors (which resolution shall be effective only with
the concurrence of a majority of the Continuing Directors),
whose determination shall be described in a statement filed
with Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the "Current Market
Price" of one one-hundredth of a share of Preferred Stock
shall be equal to the "Current Market Price" of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstand
ing, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or
to the nearest ten-thousandth of a share of Common Stock or
other share or the nearest one-millionth of a share of Pre
ferred 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 years from the date of the transaction which re
quires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Pre
ferred Stock, thereafter the Purchase Price and the number
of such other shares so receivable upon exercise of any
Right and the number of Rights outstanding 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 pro
visions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other
shares, provided, however, that the Company shall not be
liable for its inability or failure to reserve and keep
available for issuance upon exercise of the Rights pursuant
to Section 11(a)(ii) a number of shares of Common Stock
greater than the number then authorized by the Certificate
of Incorporation of the Company but not outstanding or re
served for any other purpose.
(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 ad
justed Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time here
under 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) hereof, upon each ad
justment of the Purchase Price as a result of the calcula
tions made in Section 11(b) and (c) hereof, each Right out
standing immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths
of a share of Preferred Stock (calculated to the nearest one-
millionth of a share of Preferred Stock) obtained by
(i) multiplying (A) the number of one one-hundredths of a
share covered by a Right immediately prior to such adjust
ment of the Purchase Price by (B) the Purchase Price in
effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstand
ing after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share
of Preferred Stock for which a Right was exercisable immedi
ately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall be
come that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certifi
cates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Com
pany, shall cause to be distributed to such holders of re
cord in substitution and replacement for the Right Certifi
cates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders
of record of Right Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of shares of Preferred
Stock, or fraction thereof, issuable upon the exercise of
the Rights, the Right Certificates theretofore and there
after issued may continue to express the Purchase Price per
one one-hundredth of a share and the number of shares which
were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the one one-hundredths of a share of Pre
ferred Stock issuable upon exercise of the Rights, the Com
pany shall take any corporate action which may, in the opin
ion of counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
shares 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 issuing to the holder of any Right exercised after
such record date the Preferred Stock, or a fraction thereof,
and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Pre
ferred 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; pro
vided, however, that the Company shall deliver to such hold
er a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (frac
tional 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, acting by resolution of its
Board of Directors (which resolution shall be effective only
with the concurrence of a majority of the Continuing
Directors), shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in
its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred
Stock, any issuance wholly for cash of any Preferred Stock
at less than the current market price, any issuance wholly
for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred
Stock, any stock dividends or any issuance of rights,
options or warrants referred to herein above in this Section
11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such shareholders.
(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 Subsid
iary 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 trans
action that complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or in a series of related
transactions, assets, cash flow or earning power aggregating
more than 50% of the assets, cash flow 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 that 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 Subsid
iary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be af
forded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time
after the date of this Agreement and prior to the Distribu
tion Date (i) declare or pay any dividend on the Common
Stock of the Company payable in such Common Stock or
(ii) subdivide the outstanding Common Stock of the Company
into a greater number of shares (by reclassification or
otherwise than by payment of dividends in such Common Stock)
or (iii) combine or consolidate the outstanding Common Stock
of the Company into a smaller number of shares, then in any
such case, (x) the number of one one-hundredths of a share
of Preferred Stock purchasable after such event upon proper
exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a share of Preferred
Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of
Common Stock of the Company outstanding immediately before
such event and the denominator of which is the number of
shares of such Common Stock outstanding immediately after
such event and (y) action shall be taken such that each
share of Common Stock of the Company outstanding immediately
after such event shall have issued with respect to it that
number of Rights which each share of such Common Stock out
standing immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or con
solidation is effected. If an event occurs which would
require an adjustment under Section 11(a)(ii) hereof and
this Section 11(p), the adjustments provided for in this Sec
tion 11(p) shall be in addition and prior to any adjustment
required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is made
as provided in Sections 11 and 13 hereof, the Company shall
(a) promptly prepare a certificate setting forth such adjust
ment, 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 Common Stock and Preferred Stock
a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or if prior
to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with
Section 25 of this Agreement. Notwithstanding the foregoing
sentence, the failure of the Company to make such certifi
cates or give such notice shall not affect the validity or
the force or effect of the requirement for such adjustment.
The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Any adjustment to be made pursuant to Sections 11 and 13
hereof shall be effective as of the date of the event giving
rise to such adjustment.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. (a) In the event (a
"Section 13 Event") that, following the Stock Acquisition
Time, directly or indirectly, (x) the Company shall consoli
date 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 surviving or continuing corporation of such
merger, consolidation or combination, (y) any Person (other
than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with
the Company, or merge with and into the Company, and the Com
pany shall be the surviving or continuing corporation of
such merger or consolidation and, in connection therewith,
all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of the Company or of
any 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 or
more transactions, assets, cash flow or earning power aggre
gating more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole
and calculated on the basis of the Company's most recent
regularly prepared financial statement) to any other 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 provided in Section 13(d) hereof), proper provi
sion shall be made so that (i) each holder of a Right (ex
cept as otherwise 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, nonassessable and freely
tradable shares of Common Stock of the Principal Party (as
hereinafter defined), not subject to any liens, encum
brances, rights of call, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by
(A) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Sec-
tion 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of
one one-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 by the Purchase
Price in effect immediately prior to such first occurrence),
and dividing that product (which, following the first occur
rence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by (B) 50% of the Current Market Price per share
of Common Stock of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
merger, consolidation, sale or transfer; (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 Sec
tion 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 accor
dance with Section 9 hereof) in connection with such consum
mation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reason
ably may be possible, in relation to its Common Stock there
after 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. The Company shall not consummate any such merger,
consolidation, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement containing the
provisions required by this Section 13.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Sec
tion 13(a) hereof, the Person that is the issuer of any
securities into which shares of Common Stock of the Com
pany 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) here
of, the Person that is the party receiving the greatest
portion of the assets, cash flow or earning power
transferred pursuant to such transaction or transac
tions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at any time and has not been
continuously over the preceding twelve 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 indi
rectly, of more than one Person, the Common Stock 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 Sec
tion 13 Event unless the Principal Party shall have a suffi
cient number of shares of authorized Common Stock which have
not been issued or reserved for issuance to permit the exer
cise in full of the Rights in accordance with this Sec
tion 13 and unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a
supplemental agreement containing the provisions set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement
under the Act with respect to the Rights and the secu
rities purchasable upon exercise of the Rights on an ap
propriate 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) 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) hereof.
(d) Notwithstanding anything in this Agreement to
the contrary, this Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of Sec
tion 13(a) hereof if (i) such transaction is consummated
with a Person or Persons who acquired Common Stock of the
Company pursuant to a tender offer or exchange offer for all
outstanding Common Stock of the Company 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 of the Company offered in
such transaction is not less than the price per share of
Common Stock of the Company paid to all holders of Common
Stock of the Company 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
Common Stock of the Company 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.
(e) The Company covenants and agrees that it will
not, after the Stock Acquisition Time, engage in any Sec-
tion 13 Event if at the time of or after such event there
are any charter or by-law provisions or any rights, warrants
or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such frac
tional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such frac
tions of Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value
of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the clos
ing 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 ad
mitted 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 pro
fessional market maker making a market in the Rights (se
lected by the Company, acting by resolution of its Board of
Directors, which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors). 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 Company, acting by
resolution of its Board of Directors (which resolution shall
be effective only with the concurrence of a majority of the
Continuing Directors), shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredths of a
share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares
(other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock). Fractions of
Preferred Stock in integral multiples of one one-hundredths
of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide
that the holders of depositary receipts shall have all the
rights, privileges and preferences to which they are en
titled as beneficial owners of the Preferred Stock. In lieu
of fractional shares which are not integral multiples of one
one-hundredths of a share of Preferred Stock, the Company
may pay to the registered holders of Right Certificates at
the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one share of Preferred Stock. For
purposes of this Section 14(b), the current market value of
a share of Preferred Stock shall be the closing price of a
share of Preferred Stock (as determined pursuant to the
second sentence of Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Sec-
tion 11(a)(ii) Event or a Section 13 Event, the Company
shall not be required to issue fractions of shares of its
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of its Common
Stock. In lieu of fractional shares of its Common Stock,
the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one share of its Common Stock. For
purposes of this Section 14(c), the current market value of
one share of Common Stock of the Company shall be the
closing price of one share of Common Stock of the Company
(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 frac
tional 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, except the rights of
action vested in the Rights Agent pursuant to Section 18
hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date,
the registered holders of Common Stock); and any registered
holder of any Right Certificate (or, prior to the Distribu
tion Date, of Common Stock), without the consent of the
Rights Agent or of any holder of any other Right Certificate
(or, prior to the Distribution Date, of 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 Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is spe
cifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agree
ment and will be entitled to specific performance of the
obligations hereunder, and injunctive relief against actual
or threatened violations of the obligations of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right by accepting such Right consents and
agrees with the Company and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights
shall be evidenced by the certificates for shares of
Common Stock registered in the name of the holders of
such shares (which certificates for shares of Common
Stock shall also constitute certificates for Rights)
and each Right will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Cer
tificates are transferable only on the registry books
of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accom
panied by a proper instrument of transfer and with the
appropriate forms and certificates duly completed and
fully executed;
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (not
withstanding any notations of ownership or writing on
the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be af
fected 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 admin
istrative 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. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right or Right
Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of one one-hundredth of
a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer
upon the holder of any Right or Right Certificate, as such,
any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stock
holders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certifi
cate shall have been exercised in accordance with the provi
sions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reason
able compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agree
ment and the exercise and performance of its duties here
under. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, lia
bility, 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 administra
tion of this Agreement in reliance upon any Right Certifi
cate or certificate for Preferred Stock or Common Stock or
for other securities of the Company, instrument of assign
ment 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 re
sulting 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. The purchase of all or
substantially all of the Rights Agent's assets employed in
the performance of transfer agent activities shall be deemed
a merger or consolidation for purposes of this Section 19.
In case at the time such successor Rights Agent shall suc
ceed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predeces
sor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and
in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not deliv
ered, the Rights Agent may adopt the countersignature under
its prior name and deliver Right Certificates so counter
signed; and in case at that time any of the Right Certifi
cates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal coun
sel (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 (includ
ing, without limitation, the identity of an Acquiring
Person and the determination of the Current Market
Price per share of Preferred Stock and Common Stock) 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 conclu
sively proved and established by a certificate signed
by the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Com
pany and delivered to the Rights Agent; and such cer
tificate 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 mis
conduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals
contained in this Agreement or in the Right Certifi
cates (except as to its countersignature thereof) or be
required to verify the same, but all such statements
and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any re
sponsibility in respect of the validity of this Agree
ment or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any coven
ant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 11
or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of
the existence of facts that would require any such
adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual
notice of any such adjustment), nor shall it be respon
sible for any determination by the Board of Directors
of the Company (with the concurrence of a majority of
the Continuing Directors) of the Current Market Price
of the Rights or Preferred Stock or Common Stock, 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 or other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or Common Stock or other
securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be per
formed, 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, direc
tor, 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 pre
clude the Rights Agent from acting in any other capa
city for the Company or for any other legal entity,
except it may not act for an Acquiring Person in an
investment banking capacity, or otherwise assist an
Acquiring Person in ways hostile to the Company, with
out the consent of the Company.
(i) The Rights Agent may execute and exercise any
of the rights and powers hereby vested in it or perform
any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, de
fault, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or to holders of
the Rights resulting from any such act, omission, de
fault, neglect or misconduct, provided 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 perfor
mance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate
indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate sur
rendered 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 dis
charged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered,
certified or express mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock by registered, cer
tified or express mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such re
moval or after it has been notified in writing of such res
ignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state
of the United States, in good standing, which is authorized
under such laws to exercise corporate trust or stock trans
fer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus
of at least $100 million. 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 pre
decessor Rights Agent and each transfer agent of the Common
Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legal
ity or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or
of the Rights to the contrary, the Company may, at its op
tion, issue new Right Certificates evidencing Rights in such
form as may be approved by resolution of its Board of Direc
tors (which resolution shall, if adopted after the Stock
Acquisition Time, be effective only with the concurrence of
a majority of the Continuing Directors), to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common
Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise, con
version or exchange of securities, notes or debentures
hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of
Directors of the Company (with the concurrence of a majority
of the Continuing Directors), issue Right Certificates repre
senting the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such
Right Certificates 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
Right Certificates would be issued, and (ii) no such Right
Certificates 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. (a) The Company may, by
resolution of its Board of Directors, at its option, at any
time prior to the earlier of (x) the Stock Acquisition Time
or (y) the Close of Business on the Final Expiration Date,
redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right (payable in
cash, shares of Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board
of Directors of the Company), appropriately adjusted to
reflect any stock split, stock dividend or similar transac
tion occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights (or at such time subsequent to such action as the
Board of Directors may determine), 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.
Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Dis
tribution 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. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or
purchase any Rights at any time in any manner other than
that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock of
the Company prior to the Distribution Date.
Section 23A. Exchange. (a) The Board of Direc
tors of the Company may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the
provisions of Section 7(e)) 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
of Directors shall not be empowered to effect such exchange
at any time after any Person (other than the Company, any
wholly owned Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity
holding Common Stock as a fiduciary for or pursuant to the
terms of any such employee benefit 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 of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 23A, evidence of
which shall have been filed with the Rights Agent, and with
out any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity
of such exchange. The Company shall promptly 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 ex
change 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 23A,
the Company, at its option, may substitute shares of Pre
ferred Stock (or any other series of preferred stock of the
Company containing terms substantially similar to the terms
of the Preferred Stock) for some or all of the shares of
Common Stock exchangeable for Rights, at the initial rate of
one one-hundredth of a share of Preferred Stock (or of such
other series of preferred stock of the Company) for each
share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock
pursuant to the terms thereof, so that the fraction of a
share of Preferred Stock (or of such other series of pre
ferred stock of the Company) delivered in lieu of each share
of Common Stock shall have the same voting rights as one
share of Common Stock.
(d) In the event that there shall not be suffi
cient shares of Common Stock or Preferred Stock (or any
other series of preferred stock of the Company containing
terms substantially similar to the terms of the Preferred
Stock) issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accor
dance with this Section 23A, the Company shall take all such
action as may be necessary to authorize additional shares of
Common Stock or Preferred Stock (or such other series of
preferred stock of the Company) 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 shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value
of a whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Sec
tion 11(d) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 23A.
Section 24. Notice of Certain Events. (a) In
case the Company shall propose (i) to pay any dividend pay
able in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of
its Preferred Stock (other than a regular quarterly dividend
out of earnings on retained earnings of the Company at a
rate not in excess of 125% of the rate of the last regular
quarterly cash dividend theretofore paid), or (ii) to offer
to the holders of Preferred Stock options, rights or war
rants to subscribe for or to purchase any additional Pre
ferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any re
classification of the Preferred Stock (other than a reclass
ification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any merger,
consolidation or other combination into or with, or to ef
fect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets,
cash flow or earning power of the Company and its Subsidi
aries (taken as a whole) to, any other Person, or (v) to
effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 25 here
of, 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, merger, consolidation, combination,
sale, transfer, liquidation, dissolution or winding up is to
take place and the date of participation therein by the
holders of Common Stock and/or 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 days prior to the record date for determin
ing holders of Preferred Stock for purposes of such action,
and in the case of any such other action, at least twenty
days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Com
mon Stock and/or Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this Sec
tion 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote
upon any such action.
(b) In case any of the events set forth in Sec
tion 11(a)(ii) or Section 13(a) of this Agreement shall
occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to each holder of a Right
Certificate, to the extent feasible and in accordance with
Section 25, 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) or Section 13(a)
hereof, and (ii) all references in Section 24(a) hereof to
Preferred Stock shall be deemed thereafter to refer also to
Common Stock or other securities issuable in respect of the
Rights.
Section 25. Notices. Notices or demands autho
rized by this Agreement to be given or made by the Rights
Agent or by the holder of any Right Certificate to or on the
Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol
lows:
Owens Corning
One Owens Corning Parkway
Toledo, Ohio 43659
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Right Certificate to
or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company)
as follows:
The Chase Manhattan Bank
c/o ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street - 15th Fl.
New York, New York 10001
Attention: Cynthia Gonzalez
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate (or if prior to the Distribution Date
to each holder of a certificate representing shares of Com
mon Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such Right
holder (or if prior to the Distribution Date to such holder
of Common Stock) at the address of such holder as shown on
the registry books of the Company.
Section 26. Supplements and Amendments. Prior to
the Stock Acquisition Time and subject to the penultimate
sentence of this Section 26, the Company may, by resolution
of its Board of Directors, and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of
this Agreement in any respect whatsoever (including, without
limitation, any extension of the period in which the Rights
may be redeemed) without the approval of any holders of cer
tificates representing shares of Common Stock of the Com
pany. From and after the Stock Acquisition Time and subject
to the penultimate sentence of this Section 26, without the
approval of any holders of certificates representing shares
of Common Stock of the Company or of Right Certificates, the
Company may, by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors, and only if the
Continuing Directors constitute a majority of the number of
directors then in office), and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement
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 or make any other provisions in
any manner which the Company may deem necessary or
desirable, which shall not adversely affect the interests
of, or diminish substantially or eliminate the benefits
intended to be afforded by the Rights to, the holders of
Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of any such Person); provided,
however, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sen
tence, (A) a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the
Board of Directors of the Company to redeem the Rights, in
either case at such time as the Rights are not then redeem
able or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the
rights of or the benefits to the holders of Rights (other
than an Acquiring Person or an Affiliate or Associate of any
such Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement
or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the
number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable. Prior to the Stock Acqui
sition Time, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Com
mon Stock."
Section 27. 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 here
under.
Section 28. Determinations and Actions by the
Board of Directors, etc. For all purposes of this Agree
ment, 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 of Direc
tors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors or the
Outside Directors) shall have the exclusive power, authority
and discretion to administer this Agreement and to exercise
all rights and powers specifically granted to such Board of
Directors (with, where specifically provided for herein, the
concurrence of the Continuing Directors or the Outside
Directors), or as may be necessary or advisable in the ad
ministration of this Agreement, including, without limita
tion, 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 Agree
ment (including, but not limited to, a determination to
redeem or not redeem the Rights, to amend the Agreement or
to find or to announce publicly that any Person has become
an Acquiring Person). All such actions, calculations, inter
pretations and determinations (including, for purposes of
clauses (i) and (iii) below, all omissions with respect to
the foregoing) which are done or made by the Board of
Directors of the Company (with, where specifically provided
for herein, the concurrence of the Continuing Directors or
the Outside Directors), the Outside Directors or the Company
(i) shall be within the discretion of the Board of Directors
or the Outside Directors, (ii) shall be final, conclusive
and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and
(iii) shall not subject the Board of Directors of the
Company, the Continuing Directors or the Outside Directors
to any liability to the holders of the Rights and Right
Certificates.
Section 29. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distri
bution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agree
ment; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distri
bution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provi
sion, 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 unenforce
able and the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors)
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 Business Day following the date of such
determination by the Board of Directors. Without limiting
the foregoing, if any provision of this Agreement requiring
that a determination be made by the Board of Directors with
the concurrence of a majority of the Continuing Directors or
Outside Directors or by the Outside Directors is held by a
court of competent jurisdiction or other authority to be in
valid, void, or unenforceable, such determination shall then
be made by the Board of Directors in accordance with
applicable law and the Company's certificate of incorpora
tion and by-laws.
Section 31. Governing Law. This Agreement and
each Right Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to con
tracts to be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an orig
inal, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are in
serted 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 as of the day and year
first above written.
OWENS CORNING
By
Name:
Title:
THE CHASE MANHATTAN BANK
By
Name:
Title:
Exhibit A
CERTIFICATE OF DESIGNATION OF SERIES A
PARTICIPATING PREFERRED STOCK
No Par Value
of
Owens-Corning Fiberglas Corporation
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
We, William Colville, Senior Vice President, and
Dennis Jarvela, Assistant Secretary, of Owens-Corning
Fiberglas 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 December 18, 1986, adopted the following
resolution creating a series of four hundred fifty thousand
(450,000) shares of Preferred Stock designated as Series A
Participating Preferred Stock, no Par Value;
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
<PAGE>
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 A
Participating Preferred Stock, no par value (the "Series
A Preferred Stock") and the number of shares
constituting such series shall be 400,000. Such number
of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock
to a number less than the number of shares then
outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the
holders of Common Stock, $.10 par value of the
Corporation (the "Common Stock") and of any other junior
stock which may be outstanding, shall be entitled to
receive, when, as and if declared by the Board of
Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the
first day of 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
<PAGE>
a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater
of (a) $2.50 per share ($10.00 per annum), or (b)
subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction
of a share of Series A Preferred Stock. In the event
the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of
Series A 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 A Preferred Stock as provided
in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend
Payment date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $2.50 per share ($10.00 per
<PAGE>
annum) on the Series A 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 A Preferred Stock from
the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A 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 A
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
accumulate but shall not bear interest. Dividends paid
on the shares of Series A 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 A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting
rights:
(A) Subject to the provisions for adjustment as
hereinafter set forth, each share of Series A Preferred
Stock shall entitle the holder thereof to 100 votes (and
each one one-hundredth of a share of Series A Preferred
Stock shall entitle the holder thereof to one vote) on
all matters submitted to a
<PAGE>
vote of the stockholders of the Corporation. In the
event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders
of shares of Series A 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, in the
Restated Certificate of Incorporation, in any other
certificate of designation creating a series of
preferred stock or any similar stock, or by law, the
holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights
shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) If at the time of any annual meeting of
stockholders for the election of directors, the
equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A
Preferred Stock are in default, the number of directors
constituting the Board of Directors of the Corporation
shall be increased by two. In addition to voting
together with the holders of Common Stock for the
election of other directors of the Corporation, the
holders of record of the Series A Preferred Stock,
voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart
<PAGE>
for payment prior thereto, to vote for the election of
two directors of the Corporation. Until the default in
payments of all dividends which permitted the election
of said directors shall cease to exist any director who
shall have been so elected pursuant to the next
preceding sentence may be removed at any time, either
with or without cause, only by the affirmative vote of
the holders of the shares at the time entitled to cast a
majority of the votes entitled to be cast, for the
election of any such director at a special meeting of
such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such
holders. If and when such default shall cease to exist,
the holders of the Series A Preferred Stock shall be
divested of the foregoing special voting rights, subject
to revesting in the event of each and every subsequent
like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the
terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by
two. The voting rights granted by this Section 3(c)
shall be in addition to any other voting rights granted
to the holders of the Series B Preferred Stock in this
Section 3.
(D) Except as provided herein, in Section 10 or by
applicable law, holders of Series A 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 authorizing or taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A 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 A Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
<PAGE>
(i) declare or pay dividends on, make any other
distributions on any shares or stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding-up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock except dividends paid ratably on the Series A
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 A 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 A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding-up) with the
Series A 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
<PAGE>
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 A
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,
without designation as to series, 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, in the Restated Certificate of
Incorporation, in any other certificate of designation
creating a series of preferred stock or any similar
stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding-Up.
Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, no
distribution shall be made (A) to the holders of shares
of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Series A
Preferred Stock unless prior thereto, the holders of
shares of Series A Preferred Stock shall have received
the higher of (i) $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, or (ii) an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock; nor
shall any distribution be made (B) to the holders of
stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding-up) with the
Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon
such liquidation, dissolution or winding-up. In the
event
<PAGE>
the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled
immediately prior to such event under the provision in
clause (A) 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.
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, or
otherwise changed, then in any such case each share of
Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share
(subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction
<PAGE>
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 A
Preferred Stock shall not be redeemable.
Section 9. Rank. Unless otherwise provided in the
Restated Certificate of Incorporation of the Corporation
or a Certificate of Designation relating to a subsequent
series of preferred stock of the Corporation, the Series
A 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 on
liquidation, dissolution or winding-up, and senior to
the Common Stock of this Corporation.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation, as amended, shall not
be amended in any manner which would materially alter or
change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single series.
Section 11. Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share (in one one-
hundredths (1/100) of a share and integral multiples
thereof) which shall be entitle the holder, in
proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate
in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Senior Vice
President and attested by its Assistant Secretary this
19th day of December, 1986.
<PAGE>
/s/ William Colville
Senior Vice President
ATTEST:
/s/ D. L. Jarvela
Assistant Secretary
<PAGE>
CERTIFICATE OF INCREASE OF DESIGNATION OF SERIES A
PARTICIPATING PREFERRED STOCK
No Par Value
of
Owens-Corning Fiberglas Corporation
Pursuant to Section 151 of the General Corporation Law of
the State of Delaware
We, William W. Colville, Senior Vice President, and Dennis
L. Jarvela, Assistant Secretary, of Owens-Corning Fiberglas
Corporation (the "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 provisions of Section 1 of the
resolutions set forth in the Corporation's
Certificate of Designation of a Series A
Participating Preferred Stock, which certificate
was filed in the Office of the Secretary of State
of the State of Delaware on December 24, 1986, an
increase of 300,000 shares in the number of shares
of Preferred Stock designated as and constituting
the Corporation's Series A Participating Preferred
Stock, no par value, has been authorized and
directed by a resolution adopted by the Board of
Directors, resulting in a total of 750,000 shares
of such Preferred Stock so designated.
<PAGE>
IN WITNESS WHEREOF, this Certificate is executed on behalf
of the Corporation by its Senior Vice President and attested
by its Assistant Secretary the 8th day of June, 1994.
/s/ William Colville
Senior Vice President
Attest:
/s/ D. L. Jarvela
Assistant Secretary
Exhibit B
[Form of Right Certificate]
12Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER DECEMBER 30, 2006 OR EARLIER IF THE
BOARD OF DIRECTORS ORDERS THE REDEMPTION OR EXCHANGE OF THE
RIGHTS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE
VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE
THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER,
OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURIS
DICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFI
CIALLY 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). AC
CORDINGLY, THIS CERTIFICATE AND THE RIGHTS REPRESENTED HERE
BY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
OWENS CORNING
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, sub-
ject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 12, 1996 (the "Rights Agree
ment"), between Owens Corning, a Delaware corporation (the
"Company"), and The Chase Manhattan Bank (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York, New York time)
on December 30, 2006, at the principal office of the Rights
Agent, or its successors as Rights Agent, one one-hundredth
of a fully paid nonassessable share of Series A
Participating Preferred Stock, no par value, of the Company
(the "Preferred Stock"), at a purchase price of $190 per one
one-hundredth of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Right Cer
tificate with the Form of Election to Purchase and the Cer
tificate contained therein duly executed. The number of
Rights evidenced by this Right Certificate (and the number
of one-hundredths of a share of Preferred Stock which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per one one-hundredth of a share of Preferred
Stock set forth above, are the number and Purchase Price as
of December 30, 1996, based on the shares of Preferred Stock
as constituted at such date.
From and after the first occurrence of a Sec
tion 11(a)(ii) Event (as defined in the Rights Agreement),
if the Rights evidenced by this Right Certificate are benefi
cially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person
(or of any Associate or Affiliate thereof) who becomes a
transferee after such Acquiring Person (or any Associate or
Affiliate thereof) becomes such or (iii) under certain cir
cumstances specified in the Rights Agreement, a transferee
of such Acquiring Person (or of any Associate or Affiliate
thereof) who becomes a transferee prior to or concurrently
with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occur
rence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate
shall not be exercisable, and shall be void so long as held,
by a holder in any jurisdiction where the requisite qualifi
cation to the issuance to such holder, or the exercise by
such holder, of the Rights in such jurisdiction shall not
have been obtained or be obtainable.
As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a share of
Preferred Stock or the number and kind of other securities
which may be purchased upon the exercise of the Rights evi
denced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, includ
ing Section 11(a)(ii) Events and Section 13 Events (as de
fined in the Rights Agreement).
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, as
it may be amended from time to time, which terms, provisions
and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement refer
ence is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders
of the Right Certificates, which limitations of rights in
clude the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and
the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Right Certificate, with or without other
Right Certificates, upon surrender at the principal office
of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of one one-hundredths of a share of Pre
ferred Stock as the Rights evidenced by the Right Certifi
cate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be re
deemed by the Company at a redemption price of $.01 per
Right at any time prior to the earlier of (i) the Stock
Acquisition Time (as defined in the Rights Agreement) and
(ii) the close of business on the Expiration Date (as de
fined in the Rights Agreement). Subject to the provisions
of the Rights Agreement, the rights evidenced by this Right
Certificate may be exchanged in whole or part for shares of
Common Stock or fractional shares of Preferred Stock (or any
other substantially similar series of preferred stock of the
Company).
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of
one one-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.
Other than those provisions relating to the prin
cipal economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of Direc
tors of the Company in any respect whatsoever up until the
Stock Acquisition Time and thereafter in certain respects
which do not adversely affect the interests of holders of
Right Certificates (other than an Acquiring Person or the
Affiliates or Associates thereof).
No holder of this Right Certificate shall be enti
tled to vote or receive dividends or be deemed for any pur
pose 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 Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obli
gatory for any purpose until it shall have been counter
signed by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
__________, ____.
ATTEST: OWENS CORNING
_________________________ By_________________________
Secretary Title:
Countersigned:
THE CHASE MANHATTAN BANK
By_______________________
Authorized Signatory
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________
hereby sells, assigns and transfers unto ________________
_________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _____________________ Attorney, to transfer the
within Right Certificate on the books of the within named
Company, with full power of substitution.
Dated:_____________, ____
__________________________
Signature
Signatures Guaranteed:
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
___________________________
Signature
NOTICE
The signature to the foregoing Assignment must
correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Owens Corning:
The undersigned hereby irrevocably elects to exer
cise _______________ Rights represented by this Right Cer
tificate to purchase the shares of Preferred Stock issuable
upon the exercise of such Rights and requests that certifi
cates for such shares be issued in the name of:
Please insert social security
or other identifying number
__________________________________________________________
(Please print name and address)
__________________________________________________________
If such number of Rights shall not be all the Rights evi
denced by this Right Certificate, a new Right Certificate
for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________
(Please print name and address)
__________________________________________________________
Dated:__________________, ____
[Form of Election to Purchase -- continued]
__________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate.)
Signature Guaranteed:
____________________________________________________________
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
__________________________
Signature
____________________________________________________________
NOTICE
In the event the certification set forth above in
the Forms of Assignment and Election is not completed, the
Company will deem the beneficial owner of the Rights evi
denced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and, in the case of an Assignment, will
affix a legend to that effect on any Right Certificates
issued in exchange for this Rights Certificate.
Exhibit C
OWENS CORNING
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 12, 1996, the Board of Directors of
Owens Corning (the "Company") declared a dividend
distribution of one Preferred Share Purchase Right (a
"Right") for each outstanding share of Common Stock, par
value $.10 per share, of the Company (the "Common Stock").
The following is a summary of the terms of the Rights.
Each Right entitles the registered holder to pur
chase from the Company one one-hundredth of a share of
Series A Participating Preferred Stock, no par value, of the
Company (the "Preferred Stock") at a price of $190 per one
one-hundredth of a share of Preferred Stock, subject to
adjustment (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement,
dated as of December 12, 1996 (the "Rights Agreement"),
between the Company and The Chase Manhattan Bank, as Rights
Agent (the "Rights Agent").
Initially, the Rights will be attached to all
Common Stock certificates representing shares then outstand
ing, and no separate certificates representing the Rights
("Right Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date"
will occur upon the earlier to occur of (i) ten days follow
ing the time (the "Stock Acquisition Time") of a public
announcement that a person or group of affiliated or associ
ated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of
the outstanding Common Stock of the Company and (ii) ten
business days (or, if determined by the Board of Directors
(with the concurrence of a majority of the Continuing
Directors (as hereinafter defined)), a specified or
unspecified later date) following the commencement or
announcement of an intention to make a tender offer or
exchange offer which, if successful, would cause the bidder
to own 15% of more of the outstanding Common Stock.
The Rights Agreement provides that, until the
Distribution Date, (i) the Rights will be transferred with
and only with the Common Stock, (ii) new Common Stock cer
tificates issued after December 30, 1996, upon transfer or
new issuance of the Common Stock, will contain a notation
incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any of the Common Stock
certificates outstanding will also constitute the transfer
of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable
following the Distribution Date, separate Right Certificates
will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
Except as otherwise determined by the Board of Directors,
only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
The Rights are not exercisable until the Distribu
tion Date. The Rights will expire on December 30, 2006, un
less earlier redeemed or exchanged by the Company as de
scribed below.
In the event that, after the Stock Acquisition
Time, the Company is acquired in a merger or other business
combination transaction (except certain transactions with a
person who became an Acquiring Person as a result of a
tender offer described in the next succeeding paragraph) or
50% or more of its assets, cash flow or earning power is
sold, proper provision shall be made so that each holder of
a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquir
ing company which at the time of such transaction would have
a market value (as defined in the Rights Agreement) of two
times the Purchase Price of the Right. In the event that,
after the Stock Acquisition Time, the Company were the sur
viving corporation of a merger and its Common Stock were
changed or exchanged, proper provision shall be made so that
each holder of a Right will thereafter have the right to re
ceive upon exercise that number of shares of common stock of
the Company having a market value of two times the exercise
price of the Right.
In the event that a person or group becomes an
Acquiring Person (except pursuant to a tender offer for all
outstanding Common Stock determined to be at a fair price
and otherwise in the best interests of the Company and its
stockholders by a majority of the Outside Directors), proper
provision shall be made so that each holder of a Right
(other than the Acquiring Person) will thereafter have the
right to receive upon exercise that number of shares of
Common Stock (or, in certain circumstances, cash, a reduc
tion in the Purchase Price, Common Stock, other equity secu
rities of the Company, debt securities of the Company, other
property or a combination thereof) having a market value (as
defined in the Rights Agreement) of two times the Purchase
Price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain cir
cumstances specified in the Rights Agreement) were, benefi
cially owned by any Acquiring Person (or an affiliate, asso
ciate or transferee thereof) will be null and void. A per
son will not be an Acquiring Person if the Board of Direc
tors of the Company determines that such person or group
became an Acquiring Person inadvertently and such person or
group promptly divests itself of a sufficient number of
shares of Common Stock so that such person or group is no
longer an Acquiring Person.
The Purchase Price payable, and the number of
shares of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjust
ment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the
grant to holders of Preferred Stock of certain rights or
warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of Pre
ferred Stock or (iii) upon the distribution to holders of
Preferred Stock of evidences of indebtedness or assets (ex
cluding regular periodic cash dividends or dividends payable
in Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights
and number of shares of Preferred Stock issuable upon the
exercise of each Right are also subject to adjustment in the
event of a stock split, combination or stock dividend on the
Common Stock.
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock which may, upon
the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will
be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
At any time prior to the earlier of the Stock
Acquisition Time and the Expiration Date (as defined in the
Rights Agreement), the Board of Directors may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors 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.
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such Person of 50% or
more of the outstanding shares of Common Stock, the Board of
Directors of the Company may exchange the Rights (other than
Rights beneficially owned by such Person which have become
void), in whole or part, at an exchange ratio of one share
of Common Stock per Right (subject to adjustment). The
Company, at its option, may substitute one one-hundredth of
a share of Preferred Stock (or other series of substantially
similar preferred stock of the Company) for each share of
Common Stock to be exchanged.
Each share of Preferred Stock purchasable upon
exercise of the Rights will be entitled to receive (subject
to a minimum dividend of $10 per year), a dividend of 100
times the dividend declared on the shares of Common Stock.
In the event of liquidation, the holders of the shares of
Preferred Stock will be entitled to receive (subject to a
minimum liquidation payment of $10 per share), an aggregate
liquidation payment equal to 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will
have one hundred votes, voting together with the shares of
Common Stock. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are ex
changed, each share of Preferred Stock will be entitled to
receive 100 times the amount and type of consideration re
ceived per share of Common Stock. The rights of the shares
of Preferred Stock as to dividends and liquidation, and in
the event of mergers and consolidations, are protected by
anti-dilution provisions.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
other than rights resulting from such holder's ownership of
shares of Common Stock, including, without limitation, the
right to vote or to receive dividends. While the distribu
tion of the Rights will not be taxable to stockholders or to
the Company, stockholders may, depending upon the circum
stances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consid
eration) of the Company or for common stock of the acquiring
company as set forth above.
Other than those provisions relating to the prin
cipal economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of Direc
tors prior to the Stock Acquisition Time. After such time,
the provisions of the Rights Agreement may be amended by the
Board of Directors (only with the concurrence of a majority
of the Continuing Directors) in order to cure any ambiguity,
to correct or supplement defective or inconsistent provi
sions, to shorten or lengthen any time period under the
Rights Agreement, to make changes which do not adversely
affect the interests of the holders of Rights (excluding the
interests of any Acquiring Person) or to shorten or lengthen
any time period under the Rights Agreement; provided, how
ever, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
The term "Continuing Director" means (i) any
member of the Board of Directors of the Company who was a
member of the Board prior to the Stock Acquisition Time, and
(ii) any person who is subsequently elected to the Board, if
such person is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors, and
such person is not an Acquiring Person or an affiliate,
associate, representative or nominee of an Acquiring Person.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Form 8-A. Copies of the Rights Agreement are available free
of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, as it may
be amended from time to time, which is hereby incorporated
herein by reference.
Exhibit 2
[Letterhead of Glen Hiner]
December 30, 1996
Dear Shareholder:
On December 12, 1996, your Board of Directors
adopted a new shareholder rights plan. The new rights plan
will replace the Company's existing shareholder rights plan
adopted in 1986 which expires this year.
We believe that the new plan protects your
interests in the event that the Company is confronted with
coercive or unfair takeover tactics in connection with an
unsolicited offer to acquire the Company. The plan offers
protection from offers that do not treat all stockholders
equally, acquisitions in the open market of shares
constituting control without offering fair value to all
stockholders, and other coercive or unfair takeover tactics
that could impair the Board's ability to represent your
interests fully.
Like the rights plan adopted in 1986, the new
rights plan is intended to enhance the ability of the Board
of Directors to act in the best interests of shareholders in
the event of any proposed takeover of the Company. The new
rights plan was not adopted in response to any specific
efforts to gain control of Owens Corning, and the Board of
Directors is not aware of any such effort.
Under the new plan, one new right will be
distributed for each share of Owens Corning common stock
outstanding at the close of business on December 30, 1996.
The distribution of rights will not result in taxable income
to you, will not affect Owens Corning's reported earnings
per share and will not change the way you currently trade
your shares.
Enclosed is a detailed summary of the rights being
issued in connection with the new rights plan. While the
plan is complex, its purpose is straightforward: to serve
and protect the interests of the Company's stockholders.
Sincerely yours,
Exhibit 3
OWENS CORNING WORLD HEADQUARTERS
ONE OWENS CORNING PARKWAY
TOLEDO, OHIO 43659
419.248.6190
News
Contact: William K. Hamilton Bradley D. Johnson
Media Relations Investor Relations
419/248-6190 419/248-6952
Owens Corning Declares Quarterly Dividend
announces new shareholder rights plan
TOLEDO, Ohio, December 12, 1996 - The board of directors of
Owens Corning (NYSE, TSE: OWC) today declared a quarterly
dividend of 6.25 cents per share of common stock, payable
January 15, 1997 to shareholders of record as of December
31, 1996.
The board also adopted a new shareholder rights plan to
replace an existing plan that expires December 30, 1996.
The new rights plan is intended to enhance the ability of
the board of directors to act in the best interest of
shareholders in the event of any proposed takeover. The
plan was not adopted in response to any specific effort to
gain control of Owens Corning, and the board is not aware of
any such effort.
Under the new plan, shareholders will receive one right to
purchase one one-hundredth of a share of Series A
Participating Preferred Stock, at an exercise price of $190
for each share of Owens Corning common stock held at the
close of business on December 30, 1996. The rights will
become exercisable in the event that any person or group
acquires 15 percent or more of the company's common stock or
announces a tender offer for 15 percent or more of the
company's common stock.
Should any person acquire 15 percent or more of Owens
Corning common stock, (other than pursuant to a tender offer
for all outstanding common stock at a price and on terms
determined to be fair by a majority of Owens Corning's
independent directors), all rights not held by the 15
percent stockholder become rights to purchase Owens Corning
common stock at a 50 percent discount.
- more -
OWENS CORNING
<PAGE>
The rights, which have a 10-year term, may be redeemed for
$0.01 per right by the board of directors at any time prior
to the time the rights become exercisable.
Owens Corning is a world leader in high performance glass
composites and building materials. The Toledo, Ohio-based
company had 1995 sales of $3.6 billion and employs
approximately 18,000 people in more than 30 countries. The
company's website can be found at
http://www.owenscorning.com.
# # #
