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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 28, 1994
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PETROLITE CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 0-685 43-0617572
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
369 Marshall Avenue, St. Louis, Missouri 63119
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (314) 961-3500
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None
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On March 28, 1994, the Board of Directors of Petrolite Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of capital stock, without par value (the "Capital Stock"), of the
Company. The distribution is payable to stockholders of record on April 8,
1994. When exercisable, each Right entitles the registered holder to purchase
from the Company one share of Capital Stock at a price of $120 per share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and Society National Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
shares of Capital Stock then outstanding, and no separate certificates
evidencing the Rights will be distributed. The Rights will separate from the
Capital Stock and a distribution of Rights Certificates will occur upon the
earlier to occur of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Capital Stock (the "Stock Acquisition Date")
or (ii) 10 business days (or such later date as the Continuing Directors may
determine) following the commencement of a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person of
15% or more of the outstanding shares of Capital Stock (the earlier of such
dates being called the "Distribution Date").
Notwithstanding the foregoing, "Acquiring Person" shall not include
Boatmen's Bancshares, Inc., Boatmen's Trust Company, Wm. S. Barnickel &
Company, The William S. Barnickel Testamentary Trust and Michael V. Janes
(each, together with its Affiliates and Associates, an "Exempt Person"), each
of whom has reported beneficial ownership of the Company's Capital Stock in
excess of 15% of the outstanding shares of Capital Stock, unless such an
Exempt Person acquires beneficial ownership of an additional 1% of the shares
of Capital Stock of the Company in excess of the amount reported by the Exempt
Person on such Schedule 13D, excluding in each case, those shares of Capital
Stock held pursuant to the terms of any Company employee benefit plan (other
than as a result of acquisitions of shares of Capital Stock by the Company
which increases the proportionate number of shares beneficially owned by such
Exempt Person, so long as such Exempt Person has not taken any actions which
caused the proportionate number of shares of Capital Stock beneficially owned
by such Exempt Person to increase by 1%).
Until the Distribution Date, the Rights (i) will be evidenced by the
Capital Stock certificates and will be transferred with and only with the
Capital Stock certificates, (ii) new Capital Stock certificates issued after
April 8, 1994 upon transfer or new issuance of the Capital Stock will contain
a notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates for Capital Stock outstanding also
will constitute the transfer of the Rights associated with the Capital Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on March 28, 2004, unless redeemed or
exchanged earlier by the Company as described below. The Rights will not be
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exercisable 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
has not been obtained or is not obtainable.
As soon as practicable following the Distribution Date separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Capital Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
evidence the Rights. Except as determined otherwise by the Board of
Directors, only shares of Capital Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more
(or an Exempt Person acquires an additional 1%) of the then outstanding
shares of Capital Stock (except pursuant to an offer for all outstanding
shares of Capital Stock which the Outside Directors determine to be fair to,
and otherwise in the best interests of, the Company and its stockholders),
each holder of a Right thereafter will have the right to receive upon exercise
at one-half of the Purchase Price, Capital Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right. Notwithstanding any
of the foregoing, following the occurrence of the events set forth in this
paragraph, all Rights that are, or under certain circumstances specified in
the Rights Agreement were, beneficially owned by any Acquiring Person will be
null and void. The Rights are not exercisable following the occurrence of the
events set forth above until the Rights are no longer redeemable by the
Company as set forth below.
For example, at a Purchase Price of $120 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $120
worth of Capital Stock (or other consideration, as note above) for $60.
Assuming that the Capital Stock had a per share value of $40 at such time, the
holder of each valid Right would be entitled to purchase 3 shares of Capital
Stock for $60.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
in which the Company is not the surviving corporation (other than a merger
which follows an offer described in the second preceding paragraph), or (ii)
50% or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise,
capital stock of the acquiring company having a value equal to two times the
exercise price of the Right, e.g., capital stock of the acquiring company
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having a value of $240 for the $120 exercise price.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void) in whole or in part, at an exchange ratio of one share of Capital Stock
per Right (subject to adjustment).
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The Purchase Price payable, and the number of shares of Capital Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of the
Capital Stock (ii) upon the grant to holders of the Capital Stock of certain
rights or warrants to subscribe for Capital Stock or convertible securities at
less than the current market price of the Capital Stock or (iii) upon the
distribution to holders of the Capital Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
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 will be issued, and in lieu thereof
an adjustment in cash will be made based on the market price of the Capital
Stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part,
at any time until ten days following the Stock Acquisition Date at a price of
$.01 per Right (payable in cash, Capital Stock or other consideration deemed
appropriate by the Board of Directors). Under certain circumstances set forth
in the Rights Agreement the decision to redeem the Rights will require the
concurrence of a majority of the Continuing Directors. After the redemption
period has expired the Company's right of redemption may be reinstated (with
the concurrence of the Continuing Directors) if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of Capital
Stock in a transaction or series of transactions not involving the Company and
there are no other Acquiring Persons. Immediately upon the action of the
Board of Directors of the Company ordering redemption of the Rights with,
where required, the concurrence of the Continuing Directors, the Rights will
terminate and the only right of the Rights holders will be to receive the $.01
redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors. The term shall not include an Acquiring Person, an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities. The term "Outside Directors" means "Continuing Directors" who are
not officers of the Company.
Until a Right is exercised the holder thereof, as such, will have no
rights as a stockholder of the Company including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be subject to federal taxation to stockholders or to the Company
stockholders may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Capital Stock (or other
consideration) of the Company or for capital stock of the acquiring company as
set forth above.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
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the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of the Rights holders
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided however, no amendment
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to adjust the time period governing redemption may be made at such time as the
Rights are not redeemable.
As of March 31, 1994, there were 11,308,371 shares of Capital Stock
issued and outstanding, after deducting 907,326 shares held in the Company's
treasury. Each share of Capital Stock outstanding on April 8. 1994 will
receive one Right. As long as the Rights are attached to the Capital Stock,
the Company will issue one Right for each share of Capital Stock issued
between April 8, 1994 and the Distribution Date.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired, or in a manner or on terms not approved by the Board of Directors.
The Rights, however, should not deter any prospective offeror willing to
negotiate in good faith with the Board of Directors. Nor should the Rights
interfere with any merger of other business combination approved by the Board
of Directors.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the form of
Rights Certificate, is attached hereto as Exhibit 1 and is incorporated herein
by reference. The press release announcing the declaration of the Rights
dividend and a form of letter to the Company's stockholders relating to the
adoption of the Rights Plan are attached hereto as Exhibits 2 and 3,
respectively, and are incorporated herein in their entireties by reference.
The foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such Exhibits.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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4. Form of Rights Agreement dated as of March 28, 1994, between
the Company and Society National Bank as Rights Agent.
20.1 Press Release dated March 28, 1994
20.2 Form of letter to Company's Stockholders.
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SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PETROLITE CORPORATION
By: /s/ John M. Casper
--------------------------------
John M. Casper
Vice President and
Chief Financial Officer
Date: April 6, 1994
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RIGHTS AGREEMENT
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Agreement, dated as of March 28, 1994 (the "Agreement"),
between Petrolite Corporation, a Delaware corporation (the "Company"),
and Society National Bank (the "Rights Agent").
WHEREAS, on March 28, 1994 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of Capital Stock (as
hereinafter defined) of the Company outstanding at the Close of Business
on April 8, 1994 (the "Record Date"), and has authorized the issuance of
one Right with respect to each share of Capital Stock of the Company
issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as hereinafter
defined), each Right initially representing the right to purchase one
share of Capital Stock upon the terms and subject to the conditions
hereinafter set forth.
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
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Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of Capital Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, or
(iii) any employee benefit plan of the Company or any Subsidiary of
the Company, or any Person or entity holding shares of Capital Stock
for or pursuant to the terms of any such plan to the extent, and only
to the extent, of such shares so held. Notwithstanding the foregoing,
neither Boatmen's Bancshares, Inc., Boatmen's Trust Company, Wm. S.
Barnickel & Company, The William S. Barnickel Testamentary Trust,
nor Michael V. Janes (each, together with its Affiliates and
Associates, an "Exempt Person"), each of whom filed a Statement on
Schedule 13D (each, a "Schedule 13D"), dated February 24, 1994, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
reporting beneficial ownership of shares of the Company's Capital
Stock in excess of 15% of the Company's outstanding Capital Stock,
shall be deemed an "Acquiring Person"; provided, however, that if
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after the
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date hereof, any Exempt Person shall become at any time the
Beneficial Owner of an additional 1% of the shares of Capital Stock of
the Company then outstanding in excess of the amount reported by such
Exempt Person in such Schedule 13D, excluding, in each case, those
shares of Capital Stock held pursuant to the terms of any Company
employee benefit plan, then such Exempt Person shall be deemed an
"Acquiring Person". Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of shares
of Capital Stock by the Company which, by reducing the number of
shares of Capital Stock outstanding, increases the proportionate
number of shares of Capital Stock beneficially owned by such Person to
15% or more of the shares of Capital Stock of the Company then
outstanding (or, in the case of an Exempt Person, increases the
proportionate number of shares of Capital Stock beneficially owned as
of the date hereof by an additional 1%, so long as such Exempt Person
has not taken any action which caused the proportionate number of
shares of Capital Stock beneficially owned by such Exempt Person to
increase by 1%); provided, however, that if a Person shall become the
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Beneficial Owner of 15% or more of the Capital Stock of the Company
then outstanding (or, in the case of an Exempt Person, increases the
proportionate number of shares of Capital Stock beneficially owned as
of the date hereof by an additional 1%) by reason of share purchases
by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Capital Stock
of the Company, then such Person shall be deemed to be an "Acquiring
Person" if such Person is then the Beneficial Owner of 15% or more of
the Capital Stock then outstanding (or, in the case of an Exempt
Person, the Beneficial Owner of an additional 1% of the shares of
Capital Stock of the Company then outstanding in excess of the amount
reported by such Exempt Person on such Schedule 13D).
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended,
as in effect on the date of this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
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(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), other than an
agreement, arrangement or understanding with respect to an
acquisition or conversion of Capital Stock between the proposed
acquiror and acquiree that is subject to substantial conditions
(such as a vote of the stockholders) or upon the exercise of
conversion rights, exchange rights, other rights (other than
these Rights), warrants or options, or otherwise; provided,
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however, that a Person shall not be deemed the "Beneficial
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Owner" of, or to "beneficially 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) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect
to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the
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"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with
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which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing), other than an agreement,
arrangement or understanding with respect to an acquisition
or conversion of Capital Stock between the proposed acquiror
and acquiree that is subject to substantial conditions (such
as a vote of the stockholders), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the
Company; provided, however, that nothing in this paragraph
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(c) 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.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(e) "Capital Stock" when used with reference to the Company shall
mean the shares of capital stock, without par value, of the Company.
"Capital Stock" when used with reference to any Person other than the
Company shall mean the class of capital stock with the greatest
aggregate voting power, or the class of equity securities or other
equity interests having power to control or direct the management of
such Person.
(f) "Close of Business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is
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not a Business Day it shall mean 5:00 P.M., New York City time, on
the next succeeding Business Day.
(g) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of any Acquiring Person or of
any such Affiliate or Associate, and was a member of the Board as of
the date of this Agreement, or (ii) any Person who subsequently
becomes a member of the Board, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative of
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an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(h) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth day after the Stock Acquisition Date (or, if
the tenth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii) the
Close of Business on the tenth Business Day (or, if such tenth
Business Day occurs before the Record Date, the Close of Business on
the Record Date), or such specified or unspecified later date on or
after the Record Date as may be determined by action of a majority of
the Continuing Directors, after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity holding shares of
Capital Stock for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the beneficial owner of 15%
or more of the outstanding shares of Capital Stock.
(i) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(k) "Outside Directors" shall mean the Continuing Directors who are
not officers of the Company.
(l) "Person" shall mean any individual, firm, corporation, partner-
ship or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(m) "Rights Certificate" shall have the meaning set forth in
Section 3 hereof.
(n) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(o) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
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(p) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(q) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, directly or indirectly, by
such Person, or is otherwise controlled by such Person.
(r) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
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appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Capital Stock)
in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
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(a) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Capital
Stock, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage prepaid mail, to each
record holder of Capital 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 shares of Capital Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Capital Stock and the registered
holders of the Capital Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier
Expiration Date or Final Expiration Date), the transfer of any
certificate representing shares of Capital Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with the shares of Capital Stock represented thereby.
(b) Rights shall be issued in respect of all shares of
Capital Stock issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date or the Final Expiration Date.
Rights shall also be issued to the extent
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provided in Section 22 in respect of all shares of Capital Stock which are
issued (whether originally issued or from the Company's treasury) after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Capital Stock shall also be deemed to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Petrolite
Corporation (the "Company") and Society National Bank (the "Rights
Agent") dated as of March 28, 1994 (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
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement as in effect on the date of mailing without charge
promptly after the receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may
become null and void. The Rights shall not be exercisable, and
shall be void so long as held, by a holder in any jurisdiction where
the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Capital Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Capital Stock shall also be the registered holders
of the associated Rights, and the transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Capital
Stock represented thereby.
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(c) Until the Distribution Date (i) the Rights will be
evidenced (subject to the provisions of paragraph (a) of this Section 3)
by the certificates for Capital Stock registered in the names of the
holders thereof (which certificates for Capital Stock shall also be
deemed to be Rights Certificates) and not by separate Rights
Certificates, and (ii) the Rights will be transferable only in
connection with the transfer of the underlying shares of Capital Stock
(including a transfer to the Company).
(d) 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 Capital 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 Rights Certificate, in substantially the form of
Exhibit A hereto, evidencing one Right for each share of Capital Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Capital Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make necessary and
appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever issued, shall be
dated as of the Record Date, and on their face shall entitle the holders
thereof to purchase such number of shares of Capital Stock as shall be
set forth therein at the price set forth therein (such exercise price
per share, the "Purchase Price"), but the amount and type of securities
purchasable upon exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring
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<PAGE> 9
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of
the Continuing Directors has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
----------------------------------
(a) The Rights Certificates shall be executed on behalf of
the Company by its President or a Vice-President either manually or by
facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed
any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the
Company; and any Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
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<PAGE> 10
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated
as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
- ------------------------------------------------------------------------------
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
earlier of the Expiration Date or Final Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Capital Stock
(or following a Triggering Event, other securities, cash, or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the person entitled thereto a Rights Certificate or
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and
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<PAGE> 11
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
----------------------------------------------
Date of Rights.
- ---------------
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of the
Purchase Price for each share of Capital Stock as to which the Rights
are exercised, at or prior to the earlier of (i) the close of business
on March 28, 2004 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof, or (iii) the
time at which such Rights are exchanged (the "Exchange Date") as
provided in Section 24 hereof, or (iv) the time at which the Rights
expire pursuant to Section 13(d) hereof (the earliest of (i), (ii),
(iii) and (iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Capital Stock
pursuant to the exercise of a Right shall initially be $120, and 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 Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one share of Capital Stock
to be purchased and an amount equal to any applicable transfer tax
required to be paid by the registered holder of such Rights Certificate
in cash, or by certified check, cashier's check or bank draft payable to
the order of the Company, the Rights Agent shall, subject to Section 18
(j) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Capital Stock (or make available, if the Rights
Agent is the transfer agent) certificates for the total number of shares
of Capital Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of
shares of Capital Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent
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<PAGE> 12
depositary receipts representing such number of shares of Capital Stock
as are to be purchased (in which case certificates for the shares of
Capital Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct
the depositary to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (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
Rights Certificate, registered in such name or names as may be
designated by such holder and (iv) after receipt thereof, promptly
deliver such cash, if any, to or upon the order of the registered holder
of such Rights Certificate. In the event that the Company is obligated
to issue other securities (including Capital Stock) of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such
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 Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or
upon the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, which a majority of the
Continuing Directors, in their sole discretion, determines is or was
involved in or caused or facilitated, directly or indirectly (including
through any change in the Board), such Section 11(a)(ii) Event, (ii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of
the Continuing Directors 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
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<PAGE> 13
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
----------------------------------------------------
All Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
----------------------------------------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Capital Stock, the number of shares of Capital Stock that, as provided
in this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Capital Stock issuable and
deliverable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
- 13 -
<PAGE> 14
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
in accordance with this Agreement, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the Capital Stock or
other securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration 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 connection
with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the
date set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement
has been declared effective. Upon any suspension of exercisability of
Rights referred to in this Section 9(c), 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. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable, or the
exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Capital
Stock 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 authorized and validly issued and fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery
of the Rights Certificates or of any certificates for a number of shares
of Capital Stock upon the exercise of Rights. The Company shall not,
however, be required to pay any
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<PAGE> 15
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of
certificates for a number of shares of Capital Stock in a name other than that
of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
shares of Capital Stock in a name other than that of the registered holder upon
the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Capital Stock Record Date. Each person in
--------------------------
whose name any certificate for a number of shares of Capital Stock (or
other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Capital Stock (or other securities,
as the case may be) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the
--------- --------
date of such surrender and payment is a date upon which the Capital
Stock (or other securities as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which
the Capital Stock (or other securities as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and
----------------------------------------
Kind of Shares or Number of Rights. The Purchase Price, the number and
- -----------------------------------
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Capital Stock
payable in shares of Capital Stock, (B) subdivide the outstanding
Capital Stock, (C) combine the outstanding Capital Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Capital Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in
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<PAGE> 16
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Capital Stock or the number and kind of shares of capital stock
issuable on such date, as the case may be, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the aggregate adjusted Purchase Price then in effect
necessary to exercise a Right in full, the aggregate number and kind of
shares of Capital Stock or the number and kind of shares of 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 Capital Stock (or
other capital stock, as the case may be) 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 adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of the Agreement, in the
event that any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates, shall, at
any time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Capital Stock pursuant to a cash tender offer
made pursuant to Section 14(d) of the Exchange Act for all outstanding
shares of Capital Stock (other than shares of Capital Stock beneficially
owned by the person making the offer or by its Affiliates or Associates)
at a price and on terms determined by at least a majority of 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 members of the Board deem relevant
including, without limitation, prices which could reasonably be achieved
if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the
Company and its stockholders, proper provision shall be made so that
promptly following ten (10) days after the occurrence of an event
described in this Section 11(a)(ii), each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at one-half of the then current
Purchase Price in accordance with the terms of this Agreement, such
number of shares of Capital Stock of the Company as shall equal the
result obtained by (x) multiplying one-half of the then current Purchase
Price by the then number of shares of Capital Stock for which a Right
was or would have been exercisable immediately prior to the first
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<PAGE> 17
occurrence of a Section 11(a)(ii) Event, whether or not such Right was
then exercisable, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of
the current market price per share of Capital Stock (determined pursuant
to Section 11(d) hereof) on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In lieu of issuing shares of Capital Stock in
accordance with Section 11(a)(ii), if the Board determines that the
action described below in this Section 11(a)(iii) is necessary or
appropriate and not contrary to the interests of the holders of Rights
(other than an Acquiring Person or any Affiliate or Associate of any
such Person), the Company may: (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 (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 exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors has
deemed to have the same value as shares of Capital Stock (such shares of
preferred stock are herein called "capital stock equivalents")),
(4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board of Directors based upon the advice of an investment banking firm
selected by the Board of Directors; 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 date
on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Capital Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If, after the occurrence
of a Section 11(a)(ii) Event, the number of shares of Capital Stock
which 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 the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), or in the event that, for any other reason, the number of
shares of Capital Stock which the Company is permitted to issue is not
sufficient to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), and the
Board of Directors determines in good faith that it is likely that
sufficient additional shares of Capital Stock could be authorized for
- 17 -
<PAGE> 18
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 action is to be taken
pursuant to the preceding provisions 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 any 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
Capital Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Capital Stock on the
Section 11(a)(ii) Trigger Date and the value of any "capital stock
equivalent" shall be deemed to have the same value as the Capital Stock
on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Capital Stock
entitling them (for a period expiring within forty-five (45) calendar
days after such record date) to subscribe for or purchase Capital Stock
(or shares having the same rights, privileges and preferences as the
shares of Capital Stock ("equivalent capital stock") or securities
convertible into Capital Stock at a price per share of Capital Stock or
per share of equivalent capital stock (or having a conversion price per
share of Capital Stock, if a security convertible into Capital Stock)
less than the current per share market price of the Capital Stock (as
defined in Section 11(d)) 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
Capital Stock outstanding on such record date, plus the number of shares
of Capital Stock which the aggregate offering price of the total number
of shares of Capital Stock and/or equivalent capital stock so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number of shares
of Capital Stock outstanding on such record date, plus the number of
additional shares of Capital Stock and/or equivalent capital stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such
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<PAGE> 19
consideration shall be as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent. Shares of Capital Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Capital 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
indebtedness, cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Capital Stock, but including any dividend payable in
stock other than Capital Stock), or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current per share market
price of the Capital Stock (as defined in Section 11(d)) on such record
date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Capital Stock
and the denominator of which shall be such current per share market
price of the Capital Stock. Such adjustment 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) For the purpose of any computation hereunder, the
"current market price" of the Capital Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Capital
Stock for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Capital Stock on any date shall be deemed to
be the average of the daily closing prices per share of Capital Stock
for the ten (10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the current market
--------- --------
price of the Capital Stock is determined during a period following the
announcement by the issuer of such Capital Stock of (i) a dividend or
distribution on such Capital Stock payable in shares of such Capital
Stock or securities convertible into such Capital Stock (other than the
Rights), or (ii) any
- 19 -
<PAGE> 20
subdivision, combination or reclassification of such Capital Stock, and prior to
the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market price" shall
be appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Capital Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Capital
Stock are listed or admitted to trading or, if the shares of Capital
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the shares of Capital Stock are not quoted by
any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the
shares of Capital Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the
Capital Stock, the fair value of such shares on such date as determined
in good faith by the Board of Directors shall be used. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Capital Stock are listed or
admitted to trading is open for the transaction of business, or, if the
shares of Capital Stock are not listed or admitted to trading on any
national securities exchange, the term "Trading Day" shall mean a
Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the State of New York are not authorized or obligated by
law or executive order to close. If the Capital Stock is not publicly
held or not listed or traded, "current market price" shall mean the fair
value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent
(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 Capital
- 20 -
<PAGE> 21
Stock or other share, as the case may be. Notwithstanding the first sentence of
this Section 11(e), an 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 requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Capital Stock, thereafter the
number of such other shares so receivable upon exercise of any Right and
the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Capital Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Capital Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
shares of Capital Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that fraction of a shares (or number of shares) of Capital Stock
(calculated to the nearest one-thousandth) obtained by (i) multiplying
(x) the number of shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu
of any adjustment in the number of shares of Capital Stock issuable upon
the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number
of shares of Capital Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately
- 21 -
<PAGE> 22
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days later than the date of
the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the fraction of a share (or number of shares) of Capital Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per share and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-par value, if any, of the
number of shares of Capital Stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable such number of shares of
Capital Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of shares of Capital Stock
and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of shares of Capital Stock
and other capital stock or securities of the Company, if
- 22 -
<PAGE> 23
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
--------- --------
to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Capital Stock, (ii) issuance
wholly for cash of any shares of Capital Stock at less than the current
market price, (iii) issuance wholly for cash of shares of Capital Stock
or securities which by their terms are convertible into or exchangeable
for Capital Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Capital Stock shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
- 23 -
<PAGE> 24
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Capital Stock
payable in shares of Capital Stock, (ii) subdivide the outstanding
shares of Capital Stock, or (iii) combine the outstanding shares of
Capital Stock into a smaller number of shares, the number of Rights
associated with each share of Capital Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Capital Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Capital Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of
shares of Capital Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of
shares of Capital Stock outstanding immediately following the occurrence
of such event.
Section 12. Certificate of Adjusted Purchase Price or
-----------------------------------------
Number of Shares. Whenever an adjustment is made as provided in
- -----------------
Sections 11 and 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Capital Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Capital Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer
-----------------------------------------
of Assets or Earning Power.
- ---------------------------
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or
part of the outstanding shares of Capital Stock shall be changed into or
exchanged for stock or other securities of any other
- 24 -
<PAGE> 25
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one
or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Capital Stock of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of shares of Capital Stock for
which a Right was exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the
number of shares of Capital 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 (2) dividing that product (which product, following the
first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by 50% of the current market price (determined pursuant to Section 11(d)
hereof) per share of the shares of Capital Stock of such Principal Party
on the date of consummation of such Section 13 Event (or the fair market
value on such date or other securities or property of the Principal
Party, as provided for herein); (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Capital Stock)
in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Capital Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
- 25 -
<PAGE> 26
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Capital Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
---------
however, that in any such case, (1) if the Capital Stock of such
--------
Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Capital Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Capital Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Capital Stock having
the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized
shares of its Capital Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any 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 securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date; and
- 26 -
<PAGE> 27
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of
any such Person or Persons) who acquired shares of Capital Stock
pursuant to a cash tender offer for all outstanding shares of Capital
Stock which complies with the provisions of Section 11(a)(ii) hereof,
(ii) the price per share of Capital Stock offered in such transaction is
not less than the price per share of Capital Stock paid to all holders
of Capital Stock whose shares were purchased pursuant to such cash
tender offer and (iii) the form of consideration being offered to the
remaining holders of shares of Capital Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to
such cash tender offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of
Rights except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of
the whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price
for any day shall be the last sale price, or, in case no such sale takes
place on such day, the average of the high bid and low asked prices, in
either case as reported by NASDAQ or such other system then in use or,
if on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such
- 27 -
<PAGE> 28
market maker is making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used. In the event the Rights are listed or admitted
to trading on a national securities exchange, the closing price for any
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the high bid and low asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to the national
securities exchange on which the Rights are listed or admitted to
trading.
(b) The Company shall not be required to issue fractions of
shares of Capital Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Capital Stock. In lieu
of fractional shares of Capital Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Capital Stock.
For purposes of this Section 14(b), the current market value of a share
of Capital Stock shall be the closing price of a share of Capital Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or 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 and Section 20 hereof, are vested in
the respective registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Capital Stock);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Capital Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Capital Stock), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or
threatened violations of, the obligations hereunder of any Person
subject to this Agreement.
- 28 -
<PAGE> 29
Section 16. Agreement of Rights Holders. Every holder of a
----------------------------
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Capital Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate form of assignment and the certificate contained therein
duly completed and executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name
the Rights Certificate (or, prior to the Distribution Date, the
associated Capital Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Capital Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary;
and
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any government authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must
---------
use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
---------------------------------------------------
No holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Capital Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to
- 29 -
<PAGE> 30
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Duties of Rights Agent. The Rights Agent
-----------------------
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may
be an employee of or legal counsel for the Company or the Rights Agent),
and the opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one
of the President, a Vice President, the Treasurer or the Secretary of
the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates (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 responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or
in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any
- 30 -
<PAGE> 31
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment required under the provisions of Section 11 or 13 hereof or
responsible for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Capital
Stock to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Capital Stock will, when so issued, be
validly authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, a
Vice President, the Secretary or the 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. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent
under this Rights Agreement and the date on or after which such action
shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be
less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instruction in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the
- 31 -
<PAGE> 32
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect, or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect, or
misconduct; provided, however, reasonable care was exercised in the
--------- --------
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 19. Compensation and Indemnification of the Rights Agent.
-----------------------------------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided for hereunder shall
survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance
upon any Rights Certificate or
- 32 -
<PAGE> 33
certificate for Capital Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
Section 20. Merger or Consolidation or Change of Name
-----------------------------------------
of Rights Agent.
- ----------------
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be
--------- --------
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at any such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 21. Change of Rights Agent. The Rights Agent or
-----------------------
any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed to
the Company and to each transfer agent of the Capital Stock by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may
- 33 -
<PAGE> 34
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Capital Stock by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection by the
Company), then the registered holder of any Rights Certificate may apply
to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the States of
Missouri, New York or Ohio (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the States of Missouri, New York or Ohio), in good
standing, having a principal office in the States of Missouri, New York
or Ohio which is authorized under such laws to exercise corporate trust
power and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 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 predecessor Rights
Agent and each transfer agent of the Capital Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
------------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase
Price per share and the number or kind of class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Capital Stock
- 34 -
<PAGE> 35
following the Distribution Date (other than upon exercise of a Right)
and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Capital Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights
--------- --------
Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
Section 23. Redemption.
-----------
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"); provided, however, that, if the Board of Directors
--------- --------
authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii) below, then there must be Continuing
Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (i) such
authorization occurs on or after the time a Person becomes an Acquiring
Person, or (ii) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation or from a vote or
written consent(s)) in a majority of the directors in office at the
commencement of such solicitation, or prior to such vote or consent(s),
if any Person who is a participant in such solicitation, vote or
consent(s) has stated (or, if a majority of the directors in office at
the commencement of such solicitation or prior to such vote or
consent(s) has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any
action which would result in such Person becoming an Acquiring Person or
which would cause the occurrence of a Triggering Event unless,
concurrently with such a proxy or consent solicitation or such vote or
consent(s), effected in compliance with applicable law and regulations,
such Person (or one or more of its Affiliates or Associates) is making a
cash tender offer pursuant to a Schedule 14D-1 (or any successor
- 35 -
<PAGE> 36
form) filed with the Securities and Exchange Commission for all outstanding
shares of Capital Stock not beneficially owned by such Person (or by its
Affiliates or Associates). If, following the occurrence of a Stock
Acquisition Date and following the expiration of the Company's right of
redemption hereunder (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Capital Stock
in one transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not result
in the occurrence of a Triggering Event such that such Person is
thereafter a Beneficial Owner of 10% or less of the outstanding shares
of Capital Stock, (ii) there are no other Persons, immediately following
the occurrence of the event described in clause (i), who are Acquiring
Persons, and (iii) the Board of Directors (with the concurrence of a
majority of the Continuing Directors) shall so approve, then the
Company's right of redemption shall be reinstated and thereafter be
subject to the provisions of this Section 23. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has
expired. The Company may, at its option, pay the Redemption Price in
cash, shares of Capital Stock (based on the current market price of the
Capital Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Capital Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be
made.
Section 24. Exchange.
---------
(a) The Board of Directors 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 11(a)(ii) hereof) for shares of Capital Stock at
an exchange ratio of one share of Capital Stock per
- 36 -
<PAGE> 37
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").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that
number of shares of Capital Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however,
--------- --------
that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Capital 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 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Capital
Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary
to authorize additional shares of Capital Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Capital Stock or to distribute certificates which evidence
fractional shares of Capital 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 Capital Stock. For the purposes of
this paragraph (d), the current market value of a whole share of Capital
Stock shall be the closing price of a share of Capital Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
- 37 -
<PAGE> 38
Section 25. Notice of Certain Events.
-------------------------
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class
to the holders of Capital Stock or to make any other distribution to the
holders of Capital Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings), or (ii) to offer to the holders
of Capital Stock rights or warrants to subscribe for or to purchase any
additional shares of Capital Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any
reclassification of its Capital Stock (other than a reclassification
involving only the subdivision of outstanding Capital Stock), or (iv) to
effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more
than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person, or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of the
shares of Capital Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Capital Stock for purposes of such
action and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the shares of Capital Stock
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26 hereof, a notice of the occurrence of such
event which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Capital Stock shall be deemed
thereafter to refer to Capital Stock and/or, if appropriate other
securities.
Section 26. Notices. Notices or demands authorized by this
--------
Agreement to be given or made by the Rights Agent or by the holder of
any Rights Certificate to, or on behalf of, the Company, shall be
sufficiently given or
- 38 -
<PAGE> 39
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Petrolite Corporation
369 Marshall Avenue
St. Louis, Missouri 63119
Attention: General Counsel
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 Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company)
as follows:
Society National Bank
Corporate Trust Division
127 Public Square
Cleveland, Ohio 44114
Attention: Laura Schellin
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to any such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
---------------------------
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company may (acting by at least a majority of the
Continuing Directors), and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Capital
Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may (acting by at
least a majority of the Continuing Directors), and the Rights Agent
shall at any time and from time to time, if the Company so directs,
supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (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
- --------
- 39 -
<PAGE> 40
to lengthen (A) a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/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 27, 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
shares of Capital Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of shares of Capital
Stock.
Section 28. Successors. All the covenants and provisions
-----------
of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors
and assigns hereunder.
Section 29. Determinations and Actions by the Board of
------------------------------------------
Directors, etc. For all purposes of this Agreement, any calculation of
- ---------------
the number of shares of Capital Stock outstanding at any particular
time, including for purposes of determining the particular percentage of
such outstanding shares of Capital 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 Directors (with, where specifically provided
for herein, the concurrence of the Continuing Directors or Outside
Directors) shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors or Outside Directors) or to the
Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including without limitation a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors or
Outside Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject any director to any liability to
the holders of the Rights.
- 40 -
<PAGE> 41
Section 30. Benefits of this Agreement. Nothing in this
---------------------------
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered
holders of the Capital Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of Capital Stock).
Section 31. Severability. If any term, provision, covenant
-------------
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however, that
--------- --------
notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the
invalid language from this Agreement would materially and adversely
affect the purpose or effect of this Agreement, the right of redemption
set forth in Section 23 hereof shall be reinstated and shall not expire
until the Close of Business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and
--------------
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with laws of
such State.
Section 33. Counterparts. This Agreement may be executed
-------------
in any number of counterparts. It shall not be necessary that the
signature of or on behalf of each party appears on each counterpart, but
it shall be sufficient that the signature of or on behalf of each party
appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary
in any proof of this Agreement to produce or account for more than a
number of counterparts containing the respective signatures of or on
behalf of all of the parties.
Section 34. Descriptive Headings. Descriptive headings of
---------------------
the several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of
the provisions hereof.
- 41 -
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
PETROLITE CORPORATION
Attest:
By /s/ Charles R. Miller By /s/ William E. Nasser
--------------------------- ---------------------------------
Name: Charles R. Miller Name: William E. Nasser
Title: Secretary Title: Chairman of the Board,
President and Chief
Executive Officer
SOCIETY NATIONAL BANK
Attest:
By /s/ Victor W. LaTessa By /s/ Laura Schellin
--------------------------- ---------------------------------
Name: Victor W. LaTessa Name: Laura Schellin
Title: Senior Trust Officer Title: Trust Officer
and Assistant Secretary
- 42 -
<PAGE> 43
Exhibit A
----------
[Form of Rights Certificate]
Certificate No. R Rights
-----------------
NOT EXERCISABLE AFTER MARCH 28, 2004 OR
EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF ANY SUCH PERSON (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 JURISDICTION SHALL NOT HAVE
BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED
BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*/
--
[FN]
- ----------------
*/ The portion of the legend in brackets shall be inserted only if
- --
applicable and shall replace the preceding sentence.
<PAGE> 44
Rights Certificate
PETROLITE CORPORATION
This certifies that , or
--------------------------------------
registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of
March 28, 1994 (the "Rights Agreement"), between Petrolite Corporation,
a Delaware corporation (the "Company"), and Society National Bank (the
"Rights Agent"), to purchase from the Company at any time prior to March
28, 2004 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one share of Capital
Stock, without par value (the "Capital Stock"), of the Company, at a
purchase price of $120 per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase
Price as of , 19 , based on the Capital Stock as
------------------- ---
constituted at such date, and are subject to adjustment upon the
happening of certain events as provided in the Rights Agreement.
From and after the occurrence of an event described in
Section 11(a)(ii) of the Rights Agreement, the Rights evidenced by this
Rights Certificate beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement), which the Continuing Directors (as defined in the
Rights Agreement), in their sole discretion, determines is or was
involved in or caused or facilitated, directly or indirectly (including
through any change in the Board), such Section 11(a)(ii) Event, (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, concurrently with or after such transfer,
became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Capital Stock or other securities,
which may be
<PAGE> 45
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
shares of Capital Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (i) the tenth day following the
Stock Acquisition Date (as such time period may be extended pursuant to
the Rights Agreement), and (ii) the Final Expiration Date (as defined in
the Rights Agreement). Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors. After the expiration of the
redemption period, the Company's right of redemption may be reinstated
if an Acquiring Person reduces his beneficial ownership to 10% or less
of the outstanding shares of Capital Stock in a transaction or series of
transactions not involving the Company, and such reinstatement is
approved by the Company's Board of Directors (with the concurrence of a
majority of the Continuing Directors).
At any time after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other than
Rights owned
- 2 -
<PAGE> 46
by such Acquiring Person which have become void), in whole or in part, at an
exchange ratio of one share of Capital Stock per Right (subject to adjustment).
No fractional shares of Capital Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of shares of Capital Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by this Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of , 19
-------------------------- ---
ATTEST: PETROLITE CORPORATION
By
- ------------------------- ----------------------------------
Name:
Title:
Countersigned:
- -------------------------
- ------------------------
By:
--------------------
Authorized Signature
- 3 -
<PAGE> 47
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
-------------------
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ----------------------------------------------------------
hereby sells, assigns and transfers unto ------------------------------------
(Please print name and address of transferee)
- -----------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint-------------------
- ------- Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 19
---------------------------- ---
-------------------------------------------
Signature
Signature Guaranteed:
<PAGE> 48
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: , 19
----------------- --- ------------------------------------
Signature
Signature Guaranteed:
<PAGE> 49
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
<PAGE> 50
FORM OF ELECTION TO PURCHASE
-----------------------------
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To:
---------------------------------------------------
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase
- -------------
the shares of Capital Stock issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that certificates
for such shares be issued in the name of and delivered to:
- ---------------------------------------
(Please print name and address)
- ---------------------------------------
Please insert social security
or other identifying number:
------------------------------------
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
- ---------------------------------------
(Please print name and address)
- ---------------------------------------
Please insert social security
or other identifying number:
------------------------------------
- ---------------------------------------
Dated: , 19
----------------- ---
-------------------------------
Signature
Signature Guaranteed:
<PAGE> 51
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: , 19
------------------------- --- ---------------------------------
Signature
Signature Guaranteed:
<PAGE> 52
NOTICE
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE> 53
Exhibit B
----------
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On March 28, 1994, the Board of Directors of Petrolite
Corporation (the "Company") declared a dividend distribution of one
Right for each outstanding share of capital stock, without par value
(the "Capital Stock"), of the Company. The distribution is payable to
stockholders of record on April 8, 1994. Each Right, when exercisable,
entitles the registered holder to purchase from the Company one share of
Capital Stock at a price of $120 per share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company
and Society National Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Capital Stock then outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will
separate from the Capital Stock and a distribution of Rights
Certificates will occur upon the earlier to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Capital Stock (the "Stock Acquisition Date") or (ii) 10
business days (or such later date as the Continuing Directors may
determine) following the commencement of a tender offer or exchange
offer the consummation of which would result in the beneficial ownership
by a person of 15% or more of the outstanding shares of Capital Stock
(the earlier of such dates being called the "Distribution Date").
Notwithstanding the foregoing, "Acquiring Person" shall not
include Boatmen's Bancshares, Inc., Boatmen's Trust Company, Wm. S.
Barnickel & Company, The William S. Barnickel Testamentary Trust and
Michael V. Janes (each, together with its Affiliates and Associates, an
"Exempt Person"), each of whom has reported beneficial ownership of the
Company's Capital Stock in excess of 15% of the outstanding shares of
Capital Stock, unless such an Exempt Person acquires beneficial
ownership of an additional 1% of the shares of Capital Stock of the
Company in excess of the amount reported by the Exempt Person on such
Schedule 13D, excluding in each case, those shares of Capital Stock held
pursuant to the terms of any Company employee benefit plan (other than
as a result of acquisitions of shares of Capital Stock by the Company which
<PAGE> 54
increases the proportionate number of shares beneficially owned by
such Exempt Person, so long as such Exempt Person has not taken any
actions which caused the proportionate number of shares of Capital Stock
beneficially owned by such Exempt Person to increase by 1%).
Until the Distribution Date, the Rights (i) will be evidenced
by the Capital Stock certificates, and will be transferred with and only
with the Capital Stock certificates, (ii) new Capital Stock certificates
issued after April 8, 1994 upon transfer or new issuance of the Capital
Stock will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for
Capital Stock outstanding will also constitute the transfer of the
Rights associated with the Capital Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on March 28, 2004, unless earlier
redeemed or exchanged by the Company as described below. The Rights
will not be exercisable 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 has not been obtained or is not
obtainable.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of the Capital Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will evidence the Rights. Except as otherwise
determined by the Board of Directors, only shares of Capital Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15%
or more (or an Exempt Person acquires an additional 1% of the Company's
Capital Stock) of the then outstanding shares of Capital Stock (except
pursuant to an offer for all outstanding shares of Capital Stock which
the Outside Directors determine to be fair to and otherwise in the best
interests of the Company and its stockholders), each holder of a Right
will thereafter have the right to receive upon exercise at one-half of
the Purchase Price, Capital Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the events set forth above until
such time as the Rights are no longer redeemable by the Company as set
forth below.
- 2 -
<PAGE> 55
For example, at a Purchase Price of $120 per Right, each Right
not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle
its holder to purchase $120 worth of Capital Stock (or other
consideration, as noted above) for $60. Assuming that the Capital Stock
had a per share value of $40 at such time, the holder of each valid
Right would be entitled to purchase 3 shares of Capital Stock for $60.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation (other than a merger which follows an offer described in the
second preceding paragraph), or (ii) 50% or more of the Company's assets
or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, capital stock of
the acquiring company having a value equal to two times the exercise
price of the Right, e.g., capital stock of the acquiring company
-----
having a value of $240 for the $120 exercise price.
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, at an
exchange ratio of one share of Capital Stock per Right (subject to
adjustment).
The Purchase Price payable, and the number of shares of
Capital Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Capital Stock (ii) upon the grant
to holders of the Capital Stock of certain rights or warrants to
subscribe for Capital Stock or convertible securities at less than the
current market price of the Capital Stock or (iii) upon the distribution
to holders of the Capital Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
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 will be issued
and in lieu thereof, an adjustment in cash will be made based on the
market price of the Capital Stock on the last trading date prior to the
date of exercise.
- 3 -
<PAGE> 56
In general, the Company may redeem the Rights in whole, but
not in part, at any time until ten days following the Stock Acquisition
Date, at a price of $.01 per Right (payable in cash, Capital Stock or
other consideration deemed appropriate by the Board of Directors).
Under certain circumstances set forth in the Rights Agreement, the
decision to redeem the Rights will require the concurrence of a majority
of the Continuing Directors. After the redemption period has expired,
the Company's right of redemption may be reinstated (with the
concurrence of the Continuing Directors) if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of
Capital Stock in a transaction or series of transactions not involving
the Company and there are no other Acquiring Persons. Immediately upon
the action of the Board of Directors of the Company ordering redemption
of the Rights, with, where required, the concurrence of the Continuing
Directors, the Rights will terminate and the only right of the holders
of Rights will be to receive the $.01 redemption price.
The term "Continuing Director" means any member of the Board
of Directors of the Company who was a member of the Board prior to the
date of the Rights Agreement, and any person who is subsequently elected
to the Board if such person is recommended or approved by a majority of
the Continuing Directors, but shall not include an Acquiring Person or
an affiliate or associate of an Acquiring Person, or any representative
of the foregoing entities. The term "Outside Directors" means
"Continuing Directors" who are not officers of the Company.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be subject to federal taxation to
stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights
become exercisable for Capital Stock (or other consideration) of the
Company or for capital stock of the acquiring company as set forth
above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency or to make changes which do not
adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided however, no amendment to
-----------------
adjust the time period governing redemption may be made at such time as
the Rights are not redeemable.
- 4 -
<PAGE> 57
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on a Current Report on Form 8-K. A copy of the Rights
Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
* * *
- 5 -
<PAGE> 1
For Immediate Release
- ---------------------
PETROLITE CORPORATION ADOPTS STOCKHOLDER RIGHTS PLAN
St. Louis, MO, March 28, 1994 -- Petrolite Corporation, (NASDAQ:PLIT)
announced that its Board of Directors today adopted a stockholder rights plan
granting capital stock purchase rights to its stockholders.
The rights were granted as a dividend at the rate of one Right for each
share of Capital Stock held of record as of the close of business on April 8,
1994. The Rights Plan, similar to plans adopted by more than 1,500 publicly
traded companies, is designed to deter coercive or unfair takeover tactics.
William E. Nasser, Chairman, President and Chief Executive Officer of
Petrolite Corporation, stated, "We're committed to achieving our long-term
goal of improving our earnings and the return to our shareholders. This
Stockholder Rights Plan furthers this goal by offering protection to all our
stockholders against acquirors who may seek to take advantage of the
Company and its stockholders through coercive or unfair tactics aimed at
gaining control of the Company without paying all stockholders a full and fair
price."
Each Right initially would entitle the holder to purchase one share of
Capital Stock for $120.00 under certain circumstances. The Rights will expire
in March 2004.
<PAGE> 2
Add One
At the time of adoption of the Plan the Rights are neither exercisable
nor traded separately from the Capital Stock. The Rights will be exercisable
only if a person or group in the future becomes the beneficial owner of 15% or
more of the Company's Capital Stock, or announces a tender or exchange offer
which would result in its ownership of 15% or more of the Capital Stock.
Current stockholders who have reported under the Securities Exchange Act of
1934, as amended, beneficial ownership of 15% or more of the Company's Capital
Stock do not trigger the exercise of the Rights unless they acquire beneficial
ownership of an additional 1% of the shares of the Company's Capital Stock then
outstanding in excess of the amount reported.
Ten days after a public announcement that a person has acquired, or
become the beneficial owner of, 15% or more of the Capital Stock (or, in the
case of a stockholder who has reported beneficial ownership of 15% or more,
acquires beneficial ownership of an additional 1% in excess of the amount
previously reported), each holder of a Right, other than the acquiring person,
would be entitled to purchase additional shares of Capital Stock of the
Company at one-half of the then-current price per share. If the Company is
acquired in a merger, or 50% or more of the Company's assets are sold in one or
more related transactions, each Right would entitle the holder to purchase
capital stock of the acquiring company at half of the then-current market price
of such capital stock.
At any time after a person or group of persons becomes the beneficial
owners of 15% or more of the Capital Stock (or, in the case of a stockholder
who has reported beneficial ownership of 15% or more, acquires beneficial
ownership of an additional 1% in excess of the amount previously reported),
the Board of Directors may exchange one share of Capital Stock for each Right,
other than Rights held by the acquiring person.
<PAGE> 3
Add Two
The Board of Directors generally may redeem the Rights at any time until
ten days following the public announcement that a person or group of persons
has acquired beneficial ownership of 15% or more of the outstanding Capital
Stock. The redemption price is $.01 per Right. The ten-day period may be
extended under certain circumstances.
A detailed summary of the Stockholder Rights Plan will be mailed to all
stockholders of record of the Company.
Petrolite is the leading producer and supplier of specialty chemical
service programs to oil and gas production markets and supplies
performance-enhancing additive programs and related process design and
engineering services to worldwide industrial markets.
For more information, contact Petrolite Corporation: Charles R. Miller,
Corporate Secretary and Associate General Counsel, 314/968-6186.
# # #
<PAGE> 1
April --, 1994
To our shareholders:
The Petrolite Corporation Board of Directors is pleased to announce that it
adopted a Stockholder Rights Plan (the "Plan") on March 28, 1994 to further
protect your rights and investment in Petrolite Corporation (the "Company").
The Plan is designed to protect all Company stockholders against acquirors who
may seek to take advantage of the Company and its stockholders through
coercive or unfair tactics aimed at gaining control of the Company without
paying all stockholders of the Company a full and fair price.
As part of this Plan, a special type of dividend -- in the form of a
distribution of rights -- has been declared on the capital stock of the
Company. The enclosed Summary of Rights describes the principal features of
the Plan. I urge you to read the Summary carefully and keep it with your
stock records as it contains important information.
You do not need to take any action at this time with respect to your shares.
The distribution of the rights will not change the way in which you can
currently trade the Company's shares. Your existing stock certificate will be
your proof of ownership of the rights.
The distribution of rights does not alter in any way the financial strength of
the Company or interfere with its business plans. While the distribution of
the rights will not be taxable either to you or to the Company, stockholders
may, depending on their individual circumstances, recognize taxable income
should the rights become exercisable. As explained in further detail in the
Summary of Rights, the rights will become exercisable only if certain events
occur.
The rights are not intended to prevent a fair and equitable takeover of the
Company and will not do so. However, the rights should discourage any effort
to acquire the Company in a manner or on terms not approved by the current
Board of Directors. The rights are designed to deal with the serious problem
of a potential acquiror using coercive or unfair tactics to deprive the
Company's Board of Directors of any real opportunity to determine the future
of the Company and to realize the value of your investment in the Company.
More than 1,500 publicly-traded companies have issued rights similar to those
adopted by the Board of Directors. The Board of Directors is aware that some
argue that rights plans similar to the Plan adopted by the Board of Directors
could deter legitimate acquisition proposals. The Board of Directors
carefully considered these arguments and concluded that they are speculative
and do not justify denying stockholders the protection which the rights afford
against abusive takeover tactics.
Our overriding objective is to preserve the Company's value for all
stockholders. In declaring the rights dividend, the Board of Directors has
expressed its confidence in the Company's future and its determination that
you be given every opportunity to participate fully in that future.
Yours very truly,
------------------------------
William E. Nasser
President and
Chief Executive Officer
