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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: February 13, 1996
Date of earliest
event reported: February 8, 1996
Chrysler Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-9161 38-2673623
- ------------- ---------------------- ------------------
(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1000 Chrysler Drive, Auburn Hills, Michigan 48326-2766
- ------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
(810) 512-5420
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On February 8, 1996, the Board of Directors of Chrysler Corporation,
a Delaware corporation (the "Company"), amended its Amended and Restated Rights
Agreement, dated as of December 14, 1990, as amended by Amendment No. 1, dated
as of December 1, 1994 (the "Rights Agreement"), by entering into Amendment No.
2, dated as of February 8, 1996 ("Amendment No.2"), with First Chicago Trust
Company of New York. Capitalized terms used hereinafter and not otherwise
defined have the meanings ascribed to them in the Rights Agreement.
The Rights Agreement has been amended to provide that a
"Qualifying Offer" will be exempt from the operation of the Rights Agreement.
A "Qualifying Offer" is defined in Amendment No. 2 as an all-cash,
fully-financed tender offer for all outstanding shares of the Company which is
kept open for not less than 60 business days. A Qualifying Offer would also
have to be accompanied by a written fairness opinion, addressed to the
shareholders, of a nationally recognized investment banking firm. Certain
other requirements of a Qualifying Offer are set forth in Amendment No. 2.
A copy of Amendment No. 2 is attached hereto as Exhibit 2 and
is incorporated herein by reference. The foregoing description of Amendment
No. 2 does not purport to be complete and is qualified in its entirety by
reference to Amendment No. 2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
1. Amendment No. 2, dated as of February 8, 1996, to the
Amended and Restated Rights Agreement, dated as of
December 14, 1990, as amended by Amendment No. 1,
dated as of December 1, 1994, between the Company and
First Chicago Trust Company of New York.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CHRYSLER CORPORATION
(Registrant)
By: /s/ William J. O'Brien
-----------------------
William J. O'Brien
Vice President, General
Counsel and Secretary
Date: February 13, 1996
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Amendment No. 2, dated as
of February 8, 1996, to
the Amended and Restated
Rights Agreement, dated
as of December 14, 1990,
as amended by Amendment
No. 1, dated as of
December 1, 1994, between
the Company and First
Chicago Trust Company of
New York.
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AMENDED AND RESTATED RIGHTS AGREEMENT
AMENDMENT NO. 2
THIS AMENDMENT NO. 2, dated as of February 8, 1996 (the
"Amendment"), to the Rights Agreement, dated as of February 4, 1988, amended
and restated as of December 14, 1990, amended as of December 1, 1994 (the
"Rights Agreement"), between Chrysler Corporation, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York (formerly known as
Morgan Shareholder Services Trust Company), a New York corporation (the "Rights
Agent"),
W I T N E S S E T H :
WHEREAS, the Company and the Rights Agent entered into the
Rights Agreement; and
WHEREAS, on February 8, 1996, the Board of Directors of the
Company, in accordance with Section 26 of the Rights Agreement, has determined
it desirable and in the best interests of the Company and its stockholders to
supplement and amend certain provisions of the Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
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Section 1. Amendments to Section 1. (a) The definition of
"Acquiring Person" in Section 1(a) of the Rights Agreement is amended to read
in its entirety as follows:
"(a) `Acquiring Person' shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding, other than pursuant to a Qualifying Offer; but
shall not include any employee benefit plan of the Company or any
Subsidiary of the Company or any Person organized, appointed or established
by the Company or such Subsidiary for or pursuant to the terms of any such
employee benefit plan. Notwithstanding the foregoing:
(i) no Person shall become an `Acquiring Person' as the
result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares of Common Stock
outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the shares of
Common Stock of the Company then outstanding, provided, however,
that if a Person shall become the Beneficial Owner of 15% or more
of the shares of Common Stock of the Company by reason of share
purchases by the Company and shall, after such share purchases by
the Company, at a time when such Person Beneficially Owns 15% or
more of the Common Stock, become the Beneficial Owner of any
additional shares of Common Stock of the Company (other than from
the Company pursuant to a stock dividend or stock split), then
such Person shall be deemed to be an `Acquiring Person';
(ii) if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an `Acquiring
Person' has become such inadvertently (including, without
limitation, because (A) such Person was unaware that he or it
Beneficially Owned a percentage of Common Stock that would
otherwise cause such Person to be an `Acquiring Person' or (B)
such Person was aware of the extent of his or its
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Beneficial Ownership but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement)
and without any intention of changing or influencing control of
the Company, and if such Person as promptly as practicable has
divested or divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person
would no longer be an `Acquiring Person', then such Person shall
not be deemed to be or to have become an `Acquiring Person' for
any purposes of this Agreement; and
(iii) no Person shall become an `Acquiring Person' by
virtue of ownership of Common Stock of the Company by any
Affiliate and/or Associate of such Person, which Affiliate and/or
Associate is deemed to be an Affiliate and/or Associate of such
Person solely by reason of such Affiliate and/or Associate being a
director or officer of the Company."
(b) The following new definition of "Qualifying Offer" shall be inserted
immediately following the definition of "Purchase Price", and definitions
appearing following the definition of "Qualifying Offer" shall be appropriately
relettered:
"(bb) `Qualifying Offer' shall mean a tender offer for all
outstanding shares of each class or series of Voting Stock held by any
Person other than the offeror and its Affiliates for cash, with all shares
of any particular class or series of Voting Stock to be acquired at the
same price, which offer meets all of the following requirements:
(i) on or prior to the date such offer 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, such Person
has obtained, and has provided to the Company, firm written
commitments from responsible financial institutions, which have
been accepted by such Person (or one of its Affiliates), to
provide, subject only to customary terms and conditions, funds for
such offer which, when added to the amount of cash and cash
equivalents which such Person then has available and has
irrevocably committed in writing to the Company to utilize for
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purposes of such offer, will be sufficient to pay for all shares
of Common Stock outstanding on a fully diluted basis pursuant to
the offer and the second-step transaction required by clause (v)
below and all related expenses, together with copies of all
written materials prepared by such person for such financial
institutions in connection with obtaining such financial
commitments;
(ii) such offer is conditioned such that it cannot be
consummated unless after the consummation of such offer, such
Person, alone or together with any of its Affiliates and
Associates, owns shares of Common Stock representing a majority of
the then outstanding shares of Common Stock;
(iii) such offer remains open for at least 60 Business
Days; provided, however, that (A) if there is any increase in the
price of such offer, such offer must remain open for at least an
additional 20 Business Days after the last such increase, (B) such
offer must remain open for at least 20 Business Days after the
date that any bona fide alternative offer is made which, in the
opinion of one or more investment banking firms designated by the
Company, provides for consideration per share in excess of that
provided for in the Qualifying Offer, and (C) such offer must
remain open for at least 20 Business Days after the date on which
such Person reduces the per share price offered as described in
clause (v)(B) below; provided further, however, that such offer
need not remain open, as a result of this clause (iii), beyond (y)
the time which any other offer satisfying the criteria for a
Qualifying Offer is then required to be kept open under this
clause (iii), or (z) the scheduled expiration date of any other
tender or exchange offer for shares of Common Stock with respect
to which the Board of Directors has agreed to redeem the Rights
immediately prior to acceptance for payment of shares of Common
Stock thereunder (unless such other offer is terminated prior to
its expiration without any shares of Common Stock having been
purchased thereunder);
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(iv) such offer is accompanied by a written opinion, in
customary form, of a nationally recognized investment banking
firm, which opinion is addressed to the Board of Directors of the
Company and to the holders of shares of Voting Stock other than
such Person and states that the price to be paid to holders (other
than the offeror and its Affiliates) of each individual class or
series of Voting Stock pursuant to the offer is fair from a
financial point of view to such holders; and such offer includes
as an exhibit any written presentation of such firm showing the
analysis and range of values underlying such conclusions; and
(v) prior to or on the date that such offer 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, such
Person makes an irrevocable written commitment to the Company (A)
to consummate a transaction or transactions promptly upon the
completion of such offer, whereby all shares of Common Stock not
purchased in such offer will be acquired at the same price per
share paid in such offer, subject only to the condition that the
Board of Directors shall have granted any approvals required to
enable such person to consummate such transaction or transactions
following consummation of such offer without obtaining the vote of
any other stockholder, (B) that such Person will not make any
amendment to the original offer which reduces the per share price
offered (other than a reduction to reflect any dividend declared
by the Company (other than a regular quarterly dividend) after the
commencement of such offer or any material change in the capital
structure of the Company initiated by the Company after the
commencement of such offer, whether by way of recapitalization,
reorganization, repurchase or otherwise), changes the form of
consideration offered, or reduces the number of shares being
sought or which is in any other respect materially adverse to the
Company's stockholders, and (C) that neither such Person nor any
of its Affiliates or Associates will make any offer for any equity
securities of the Company for a period of six months after the
termination of the original offer (including any amendment
thereof) if such original
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offer does not result in the tender of the number of shares of
Common Stock required to be purchased pursuant to clause (ii)
above, unless another tender offer by another party for all
outstanding shares of Common Stock is commenced that (y)
constitutes a Qualifying Offer or (z) is approved by the Board of
Directors of the Company (in which event, any new offer by such
Person or of any of its Affiliates or Associates must be at a
price no less than that provided for in such approved offer)."
(c) The following new definition of "Voting Stock" shall be inserted
immediately following the definition of "Trading Day":
"(pp) `Voting Stock' shall mean (i) the shares of Common Stock of
the Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to vote
together with the shares of Common Stock in respect of any merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation, dissolution or winding up."
Section 2. Amendments to Section 3. (a) The first sentence of
section 3(a) of the Rights Agreement is amended by adding the phrase "and other
than a Qualifying Offer" immediately following the phrase "any such employee
benefit plan".
(b) The second sentence of section 3(b) of the Rights Agreement
is amended by deleting the date "December 1, 1994" and inserting in lieu
thereof the date "February 8, 1996".
(c) The legend set forth in section 3(c) of the Rights Agreement
is amended by adding the phrase "and as of
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February 8, 1996" immediately afterthe phrase "and further amended as of
December 1, 1994".
Section 3. Amendment to Section 28. Section 28 is amended by
adding "(a)" immediately prior to the first sentence thereof, by adding the
phrase "and a determination of whether an offer constitutes a Qualifying Offer"
immediately following the phrase "or to amend the Agreement" in clause (ii)
thereof, and by adding the following immediately following the last sentence
thereof:
"(b) Nothing contained in this Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing
contained in this Agreement shall be construed to suggest or imply that the
Board of Directors of the Company shall not be entitled to reject any
Qualifying Offer or any other tender offer, or to take any other action
(including, without limitation, the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or
alternative offers or other proposals) with respect to any Qualifying Offer
or any other tender offer that the Board of Directors believes is necessary
or appropriate in the exercise of such fiduciary duty."
Section 4. Amendment to Right Certificate. The form of Right
Certificate set forth in Exhibit B attached to the Rights Agreement is hereby
amended to read in its entirety as set forth in Exhibit B attached hereto.
Section 5. Amendment to Summary of Rights. The form of Summary
of Rights set forth in Exhibit C attached to the Rights Agreement is hereby
amended to read in its entirety as set forth in Exhibit C attached hereto.
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Section 6. Rights Agreement as Amended. The term "Agreement" as
used in the Rights Agreement shall be deemed to refer to the Rights Agreement
as amended hereby. This Amendment shall be effective as of the date hereof and,
except as set forth herein, the Rights Agreement shall remain in full force and
effect and be otherwise unaffected hereby.
Section 7. Counterparts. This Amendment may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an
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original, and all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment 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.
Attest: CHRYSLER CORPORATION
By: By:
---------------------- -------------------------
Title: Title:
Attest: FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By: By:
---------------------- -------------------------
Title: Title:
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EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 22, 1998 OR EARLIER IF THE BOARD OF DIRECTORS
ORDERS THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.05 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID
SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE
QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER,
OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE
OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1
Rights Certificate
CHRYSLER 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 February 4, 1988, amended and restated as of
December 14, 1990, and further amended by Amendment No. 1, dated as of December
1, 1994 and by
- -------------------
1. The portion of the legend in brackets whall be inserted only if applicable
and shall replace the preceding sentence.
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Amendment No. 2, dated as of February 8, 1996 (the Rights Agreement as so
amended is hereinafter referred to as the "Rights Agreement"), between Chrysler
Corporation, a Delaware corporation (the "Company"), and First Chicago Trust
Company of New York (formerly known as Morgan Shareholder Services Trust
Company), a New York corporation (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (New York City time) on February 22,
1998, at the principal office of the Rights Agent, or its successors as Rights
Agent, one one-hundredth of a fully paid nonassessable share of Junior
Participating Cumulative Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), of the Company, at a purchase price of $120 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and the Certificate contained therein duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a share of Preferred Stock which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per one one-hundredth
of a share of Preferred Stock set forth above, are the number and Purchase
Price as of February 22, 1988,
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based on the shares of Preferred Stock as constituted at such date.
From and after the first occurrence of a Section 11(a)(ii) Event
(as defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Af filiate
or Associate thereof (as such terms are defined in the Rights Agreement), (ii)
a transferee of any such Acquiring Person (or of any Associate or Affiliate
thereof) who becomes a transferee after such Acquiring Person (or any Associate
or Affiliate thereof) becomes such or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of such Acquiring Person (or of
any Associate or Affiliate thereof) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such, such Rights shall become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite 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.
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As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a share of Preferred Stock or the number and
kind of other securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, including Section 11(a)(ii) Events and
Section 13 Events (as defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, as it may be amended from time to time,
which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates, which limitations of rights include
the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
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This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at a
redemption price of $.05 per Right at any time prior to the earlier of (i) the
Stock Acquisition Time (as defined in the Rights Agreement) and (ii) the close
of business on the Expiration Date (as defined in the Rights Agreement).
Subject to the provisions of the Rights Agreement, the rights evidenced by this
Right Certificate may be exchanged in whole or part for shares of Common Stock
or fractional shares of Preferred Stock (or any other substantially similar
series of preferred stock of the Company).
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No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
Other than those provisions relating to the 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 (following the Stock
Acquisition Time, only with the concurrence of a majority of the Continuing
Directors) in any respect whatsoever up until the Stock Acquisition Time and
thereafter in certain respects which do not adversely affect the interests of
holders of Right Certificates (other than an Acquiring Person or the Affiliates
or Associates thereof).
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
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election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or 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: CHRYSLER CORPORATION
_________________________ By _________________________
Secretary Title:
Countersigned:
First Chicago Trust Company
of New York
By _______________________
Authorized Signature
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CHRYSLER CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On February 4, 1988, the Board of Directors of Chrysler
Corporation (the "Company") declared a dividend distribution of one Preferred
Share Purchase Right (a "Right") for each outstanding share of Common Stock,
par value $1.00 per share, of the Company (the "Common Stock"). On September
7, 1989, December 14, 1990, December 1, 1994 and February 8, 1996, the Board of
Directors amended the terms of the Rights. The following is a summary of the
terms of the Rights, as so amended.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Junior Participating Cumulative
Preferred Stock, par value $1.00 per share, of the Company (the "Preferred
Stock") at a price of $120 per one one-hundredth of a share of Preferred Stock,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement, amended and restated as of December
14, 1990, as amended by Amendment No. 1, dated as of December 1, 1994 and
Amendment No. 2, dated as of February 8, 1996 (the Rights Agreement, as so
amended, is hereinafter referred to as the "Rights Agreement"), between the
Company and First Chicago Trust Company of New York (formerly known as Morgan
Shareholder Services Trust Company), as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The Rights
will separate from the Common Stock and a "Distribution Date" will occur upon
the earlier to occur of (i) ten days following the time (the "Stock Acquisition
Time") of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Stock of
the Company, other than as a result of a Qualifying Offer (as hereinafter
defined) and (ii) ten business days (or, if determined by the Board of
Directors (with the concurrence of a majority of the Continuing Directors (as
hereinafter defined)), a specified or unspecified later date) following
<PAGE> 18
the commencement or announcement of an intention to make a tender offer or
exchange offer which, if successful, would cause the bidder to own 15% of more
of the outstanding Common Stock.
A "Qualifying Offer" is defined in the Rights Agreement to mean a
tender offer for all outstanding shares of each class or series of Voting Stock
(as hereinafter defined) held by any person other than the offeror and its
affiliates for cash, with all shares of any particular class or series of
Voting Stock to be acquired at the same price, which offer meets all of the
following requirements: (i) the person or group making the tender offer must,
upon or prior to commencing such offer, have provided to the Company firm
written commitments from responsible financial institutions, which have been
accepted by such person or group, to provide, subject only to customary terms
and conditions, funds for such offer which, when added to the amount of cash
and cash equivalents which such person or group then has available and has
irrevocably committed in writing to the Company to utilize for purposes of such
offer, will be sufficient to pay for all shares of Common Stock outstanding on
a fully diluted basis pursuant to the offer and the second-step transaction
required by clause (v) below and all related expenses, together with copies of
all written materials prepared by such person or group for such financial
institutions in connection with obtaining such financial commitments; (ii) such
offer must be conditioned such that it cannot be consummated unless after the
consummation of such offer, such person or group must own shares of Common
Stock representing a majority of the then outstanding shares of Common Stock;
(iii) such offer must remain open for at least 60 business days and for at
least 20 business days after the last increase or permitted decrease in the
price of such offer and after any bona fide higher alternative offer is made
(except in certain limited circumstances set forth in the Rights Agreement);
(iv) such offer must be accompanied by a written opinion, in customary form, of
a nationally recognized investment banking firm, which opinion is addressed to
the Board of Directors of the Company and to the holders of shares of Voting
Stock other than such person or group and states that the price to be paid to
holders (other than the offeror and its affiliates) of each individual class or
series of Voting Stock pursuant to the Qulaifying Offer is fair from a
financial point of view to such holders; and such offer includes as an exhibit
any written presentation of such firm showing the analysis and range of values
underlying such conclusions; and (v) prior to or upon commencement of the
offer, such person or
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group must make an irrevocable written commitment to the Company (A) to
consummate a transaction or transactions promptly upon the completion of such
offer whereby all shares of Common Stock not purchased in such offer will be
acquired at the same price per share paid in such offer, subject only to the
condition that the Board of Directors has granted any approvals required to
enable such person to consummate such transaction or transactions without
obtaining the vote of any other stockholder, (B) that such person or group will
not make any amendment to the original offer which reduces the per share price
offered (except in certain limited circumstances set forth in the Rights
Agreement), changes the form of consideration offered, or reduces the number of
shares being sought or which is in any other respect materially adverse to the
Company's stockholders, and (C) that such person or group make any offer for
any equity securities of the Company for a period of six months after the
termination of the original offer (including any amendment thereof) if such
original offer does not result in the tender of the number of shares of Common
Stock required to be purchased pursuant to clause (ii) above, unless another
tender offer by another party for all outstanding shares of Common Stock is
commenced that (y) constitutes a Qualifying Offer or (z) is approved by the
Board of Directors of the Company (in which event, any new offer by such Person
or of any of its Affiliates or Associates must be at a price no less than that
provided for in such approved offer).
The Rights Agreement provides that, until the Distribution Date,
(i) the Rights will be transferred with and only with the Common Stock, (ii)
new Common Stock certificates issued after February 22, 1988, upon transfer or
new issuance of the Common Stock, will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any of
the Common Stock certificates outstanding will also constitute the transfer of
the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
Right Certificates will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 22,
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1998, unless earlier redeemed or exchanged by the Company as described below.
In the event that, after the Stock Acquisition Time, the Company
is acquired in a merger or other business combination transaction (except
certain transactions with a person who became an Acquiring Person as a result
of a tender offer described in the next succeeding paragraph) or 50% or more of
its assets, cash flow or earning power is sold, proper provision shall be made
so that each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction would have a market value (as defined in the Rights Agreement)
of two times the Purchase Price of the Right. In the event that, after the
Stock Acquisition Time, the Company were the surviving corporation of a merger
and its Common Stock were changed or exchanged, proper provision shall be made
so that each holder of a Right will thereafter have the right to receive upon
exercise that number of shares of common stock of the Company having a market
value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring Person
(except pursuant to a tender offer for all outstanding Common Stock determined
to be at a fair price and otherwise in the best interests of the Company and
its stockholders by a majority of the Outside Directors), proper provision
shall be made so that each holder of a Right (other than the Acquiring Person)
will thereafter have the right to receive upon exercise that number of shares
of Common Stock (or, in certain circumstances, cash, a reduction in the
Purchase Price, Common Stock, other equity securities of the Company, debt
securities of the Company, other property or a combination thereof) having a
market value (as defined in the Rights Agreement) of two times the Purchase
Price of the Right. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person (or an affiliate, associate or
transferee thereof) will be null and void. A person will not be an Acquiring
Person if the Board of Directors of the Company determines that such person or
group became an Acquiring Person inadvertently and such person or group
promptly divests itself of a sufficient number of shares of Common Stock so
that such person or group is no longer an Acquiring Person.
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The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of Preferred Stock of certain
rights or warrants to subscribe for Preferred Stock or convertible securities
at less than the current market price of Preferred Stock or (iii) upon the
distribution to holders of Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above). The number of Rights and number of shares of Preferred
Stock issuable upon the exercise of each Right are also subject to adjustment
in the event of a stock split, combination or stock dividend on the Common
Stock.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock which may, upon the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Time and
the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.05
per Right (the "Redemption Price"). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.05 Redemption
Price.
At any time after a person becomes an Acquiring Person and prior
to the acquisition by such Person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights beneficially owned by such Person which have become void),
in whole or part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment). The Company, at its option, may substitute one
one-hundredth of a share of Preferred Stock (or other series of substantially
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<PAGE> 22
similar preferred stock of the Company) for each share of Common Stock to be
exchanged.
Each share of Preferred Stock purchasable upon exercise of the
Rights will have a minimum preferential dividend of $10 per year, but will be
entitled to receive, in the aggregate, a dividend of 100 times the dividend
declared on the shares of Common Stock. In the event of liquidation, the
holders of the shares of Preferred Stock will be entitled to receive a minimum
liquidation payment of $100 per share, but will be entitled to receive an
aggregate liquidation payment equal to 100 times the payment made per share of
Common Stock. Each share of Preferred Stock will have one hundred votes,
voting together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount and type of consideration received per share of Common Stock. The
rights of the shares of Preferred Stock as to dividends and liquidation, and in
the event of mergers and consolidations, are protected by anti-dilution
provisions.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, other than rights resulting from
such holder's ownership of shares of Common Stock, including, without
limitation, the right to vote or to receive dividends. While the distribution
of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
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 prior to the Stock Acquisition Time. After
such time, the provisions of the Rights Agreement may be amended by the Board
of Directors (only with the concurrence of a majority of the Continuing
Directors) in order to cure any ambiguity, to correct or supplement defective
or inconsistent provisions, to shorten or lengthen any time period under the
Rights Agreement, to make changes which do not adversely affect the interests
of the holders of Rights (excluding the interests of any Acquiring Person) or
to shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust
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the time period governing redemption shall be made at such time as the Rights
are not redeemable.
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 Stock
Acquisition Time, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors then on the Board of Directors, but shall not include an Acquiring
Person or an affiliate, associate, representative or nominee of an Acquiring
Person.
The term "Voting Stock" means (i) the shares of Common Stock of
the Company and (ii) any other shares of capital stock of the Company entitled
to vote generally in the election of directors or entitled to vote together
with the shares of Common Stock in respect of any merger, consolidation, sale
of all or substantially all of the Company's assets, liquidation, dissolution
or winding up.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to an Amendment on Form 8 dated December
14, 1990. A copy of Amendment No. 1 to the Rights Agreement has been filed
with the Securities and Exchange Commission as an Exhibit to an Amendment on
Form 8 dated December 1, 1994. A copy of Amendment No. 2 to the Rights
Agreement has been filed with the Securities and Exchange Commission as an
Exhibit to a Form 8-A/A (Amendment No. 4) dated February 13, 1996. Copies of
the Rights Agreement and Amendments No. 1 and 2 are available free of charge
from the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, as it may be amended from time to time, which is hereby incorporated
herein by reference.
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