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FORM 8-A/A-2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Chrysler Corporation
(Exact name of registrant as specified in its charter)
Delaware 38-2673623
(State of incorporation or organization) (IRS Employer Identification No.)
1000 Chrysler Drive
Auburn Hills, Michigan 48326-2766
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
Rights to Purchase Junior New York Stock Exchange
Participating Cumulative Preferred
Stock, par value $1.00 per share
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [ X ]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [ ]
Securities Act registration statement file number to which this form
relates (if applicable): Not applicable
--------------
Securities to be registered pursuant to Section 12(g) of the Act:-
None
(Title of Class)
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ITEM 1. Description of Registrant's Securities to
be Registered
Chrysler Corporation (the "Registrant") hereby amends and
supplements the Registration Statement on Form 8-A/A filed by the Registrant
with the Securities and Exchange Commission on February 13, 1998, to provide
Exhibit A to the Rights Agreement between the Registrant and First Chicago Trust
Company of New York, Rights Agent, dated as of February 5, 1998. Exhibit A was
inadvertently omitted from the Registrant's February 13, 1998 filing on Form
8-A/A.
On February 4, 1998, the Board of Directors of the Registrant
declared a dividend distribution of one Preferred Share Purchase Right (a
"Right") for each outstanding common share, par value $1.00 per share (the
"Common Stock"), of the Registrant. The Rights will be issued on February 23,
1998 to the stockholders of record on such date and will expire in ten years,
subject to earlier redemption. Under certain circumstances, each Right entitles
the registered holder to purchase from the Registrant one two-hundredth of a
share of Junior Participating Cumulative Preferred Stock, par value $1.00 per
share, of the Registrant (the "Preferred Stock"). The description and terms of
the Rights are set forth in a rights agreement dated February 5, 1998 (the
"Rights Agreement") between the Registrant and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agent").
Exercise Price
When exercisable, except as set forth below, each Right
entitles the registered holder to purchase from the Registrant one two-hundredth
of a share of the Preferred Stock, at a price of $145 per one two-hundredth of a
share (the "Purchase Price"), subject to adjustment.
Transfer and Detachment
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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 or notice to the Registrant 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 Registrant, other than as a result of a
Qualifying Offer (as hereinafter defined) or an offer approved by the Board of
Directors of the Registrant and (ii) ten business days (or, if determined by the
Board of Directors, a specified or unspecified later date) following the
commencement or announcement of an intention to make a tender offer or exchange
offer which, if successful, would cause the bidder to own 15% of more of the
outstanding Common Stock.
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 Registrant 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 Registrant 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
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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 Registrant 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 Qualifying 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 group must make an irrevocable written commitment to the Registrant
(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
Registrant's stockholders, and (C) that such person or group not make any offer
for any equity securities of the
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Registrant 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 Registrant
(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 term "Voting Stock" means (i) the shares of Common Stock
of the Registrant and (ii) any other shares of capital stock of the Registrant
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 Registrant's assets,
liquidation, dissolution or winding up.
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 23, 1998, upon
transfer, new issuance or reissuance 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 in
connection with issuance of Common Stock pursuant to employee stock plans,
options and certain convertible securities, and 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.
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Exercisability
The Rights are not exercisable until the Distribution Date.
The Rights will expire on February 23, 2008 unless earlier redeemed or exchanged
by the Registrant.
Right to Acquire Stock at Half Price
In the event that, after the Stock Acquisition Time, the
Registrant is acquired in a merger or other business combination transaction
(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 Registrant 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 Registrant
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, 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,
Preferred Stock, other equity securities of the Registrant, debt securities of
the Registrant, 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
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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 Registrant determines that such person or group became an Acquiring Person
inadvertently and such person or group promptly divests itself of a sufficient
number of shares of Common Stock so that such person or group is no longer an
Acquiring Person.
Adjustments
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon 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 two-hundredth
of a share of Preferred Stock which may, upon the election of the Registrant, 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.
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Redemption or Exchange
At any time prior to the earlier of the Stock Acquisition Time
and the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 Redemption
Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Person of 50% or more of the outstanding shares
of Common Stock, the Board of Directors of the Registrant 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 Registrant, at its option, may substitute one
two-hundredth (subject to adjustment) of a share of Preferred Stock (or other
series of substantially similar preferred stock of the Registrant) for each
share of Common Stock to be exchanged.
Preferred Shares
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 200 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 $200 per share, but will be entitled to receive an
aggregate liquidation payment equal to 200 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 200 times
the amount and type of consideration
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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 Registrant, 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 Registrant,
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 Registrant or for common stock of the acquiring company as
set forth above.
Amendment
Other than those provisions relating to the Redemption Price
and expiration date 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 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 the time period governing
redemption shall be made at such time as the Rights are not redeemable.
Issuance of Rights
Each share of Common Stock outstanding on February 23, 1998
will receive one Right. As long as the Rights are attached to the Common Stock,
the Registrant will issue one
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Right with each share of Common Stock it issues, so that all such shares have
attached Rights.
Rights Agreement
A copy of the Rights Agreement, which includes as Exhibit A
the Certificate of Designation and as Exhibit B the form of Right Certificate,
is attached hereto as Exhibit 1 and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference to
such Exhibit.
ITEM 2. Exhibits
1. Rights Agreement between the Registrant and First Chicago
Trust Company of New York, Rights Agent, dated as of February
5, 1998, which includes as Exhibit B the form of Right
Certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized.
CHRYSLER CORPORATION
(Registrant)
By /s/ William J. O'Brien, III
------------------------------
Name: William J. O'Brien, III
Title: Vice President, General
Counsel and Secretary
DATE: May 1, 1998
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EXHIBIT INDEX
Exhibit No. Description
1. Rights Agreement between the Registrant and First Chicago
Trust Company of New York, Rights Agent, dated as of February
5, 1998, which includes as Exhibit B the form of Right
Certificate.
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================================================================================
CHRYSLER CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
RIGHTS AGREEMENT
Dated as of February 5, 1998
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Certain Definitions......................................................... 1
Section 2. Appointment of Rights Agent................................................. 9
Section 3. Issue of Right Certificates................................................. 9
Section 4. Form of Right Certificates.................................................. 11
Section 5. Countersignature and Registration........................................... 11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................... 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............... 12
Section 8. Cancellation and Destruction of Right Certificates.......................... 14
Section 9. Reservation and Availability of Capital Stock............................... 15
Section 10. Preferred Stock Record Date................................................ 16
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights...................................................... 16
Section 12. Certificate of Adjusted Purchase Price or Number of Shares................. 25
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power............................................... 25
Section 14. Fractional Rights and Fractional Shares.................................... 27
Section 15. Rights of Action........................................................... 29
Section 16. Agreement of Right Holders................................................. 29
Section 17. Right Certificate Holder Not Deemed a Stockholder.......................... 30
Section 18. Concerning the Rights Agent................................................ 30
</TABLE>
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<TABLE>
<S> <C>
Section 19. Merger or Consolidation or Change of Name of Rights Agent.................. 31
Section 20. Duties of Rights Agent..................................................... 31
Section 21. Change of Rights Agent..................................................... 33
Section 22. Issuance of New Right Certificates......................................... 34
Section 23. Redemption................................................................. 35
Section 24. Exchange................................................................... 35
Section 25. Notice of Certain Events................................................... 37
Section 26. Notices.................................................................... 38
Section 27. Supplements and Amendments................................................. 38
Section 28. Successor.................................................................. 39
Section 29. Determinations and Actions by the Board of Directors, etc.................. 39
Section 30. Benefits of this Agreement................................................. 40
Section 31. Severability............................................................... 40
Section 32. Governing Law.............................................................. 41
Section 33. Counterparts............................................................... 41
Section 34. Descriptive Headings....................................................... 41
</TABLE>
Exhibit A - Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
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RIGHTS AGREEMENT
This Rights Agreement, dated as of February 5, 1998 (the
"Agreement"), between Chrysler Corporation, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, a New York corporation
(the "Rights Agent"),
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one Right (as hereinafter defined) for each share of
Common Stock (as hereinafter defined) of the Company outstanding at the Close of
Business (as hereinafter defined) on February 23, 1998 (the "Record Date"), each
Right initially representing the right to purchase one two-hundredth (1/200th)
of a share of Junior Participating Cumulative Preferred Stock, par value $1.00
per share, of the Company having the rights and preferences set forth in the
Certificate of Designation attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (the "Rights"), and has further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and the
earlier of the Distribution Date (as hereinafter defined) or the Expiration Date
(as hereinafter defined) and, to the extent provided in Section 22 hereof, with
respect to each such share issued after the Distribution Date and prior to the
Expiration Date;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock of the Company
then outstanding, other than by reason of the consummation of a Qualifying
Offer; but shall not include any Exempt Person.
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
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purchases by the Company, 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" unless, upon becoming the Beneficial
Owner of such additional shares of Common Stock of the Company, such
Person is not then the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding;
(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 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;
(iii) no Person shall become an "Acquiring Person" by virtue
of beneficial 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; and
(iv) no Person shall become an "Acquiring Person" by virtue of
an acquisition of shares of Common Stock of the Company pursuant to a
tender or exchange offer for all outstanding shares of Common Stock of
the Company at a price and on terms determined by at least a majority
of the members of the Board of Directors of the Company who are not
officers of the Company or of any of its Subsidiaries, are not
representatives, nominees, Affiliates or Associates of such Person or
of any other Person who would otherwise be an "Acquiring Person," and
would not themselves otherwise be "Acquiring Persons" (the "Outside
Directors"), after receiving advice from one or more investment banking
firms, to be (1) at a price which is fair to stockholders (taking into
account all factors which such Outside Directors deem relevant,
including, without limitation, prices which could reasonably be
achieved if the Company or its assets were to be sold on an orderly
basis designed to realize maximum value) and (2) otherwise in the best
interests of the Company and its stockholders.
(b) "Act" shall have the meaning set forth in Section 9(b)
hereof.
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(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate," when used with reference to
any Person, shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(e) "Agreement" shall have the meaning set forth in the first
paragraph hereof.
(f) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for payment or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Section
11(a)(ii) Event or a Section 13 Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or 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 or shares the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security if the agreement, arrangement or
understanding to vote such security (A) arises solely from a revocable
proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange
Act and the applicable rules and regulations thereunder and (B) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
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(iii) which are beneficially owned, directly or indirectly, by
any other Person and with respect to which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as
described in the proviso to subparagraph (ii) of this paragraph (f)) or
disposing of such securities of the Company;
provided, however, that nothing in this paragraph (f) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(h) "Certificate of Designation" shall mean the Certificate of
Designation of Junior Participating Cumulative Preferred Stock setting forth the
powers, preferences, rights, qualifications, limitations and restrictions of
such series of preferred stock of the Company, a copy of which is attached
hereto as Exhibit A.
(i) "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
not a Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(j) "Common Stock" when used with reference to the Company
shall mean the Common Stock, par value $1.00 per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company which is
organized in corporate form shall mean the capital stock with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person or, if such Person is a
Subsidiary of another Person, the Person which ultimately controls such
first-mentioned Person and which has issued any such outstanding capital stock,
equity securities or equity interests. "Common Stock" when used with reference
to any Person which is not organized in corporate form shall mean units of
beneficial interest which (i) shall represent the right to participate generally
in the profits and losses of such Person (including, without limitation, any
flow-through tax benefits resulting from an ownership interest in such Person)
and which (ii) shall be entitled to exercise the greatest voting power of such
Person or, in the case of a limited partnership, shall have the power to remove
the general partner or partners.
(k) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
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(l) "Company" shall have the meaning set forth in the first
paragraph of this Agreement.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(n) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(o) "Distribution Date" shall have the meaning specified in
Section 3(a) hereof.
(p) "Equivalent Preference Stock" shall have the meaning set
forth in Section 11(b) hereof.
(q) "Exchange Act" shall have the meaning specified in Section
1(f) hereof.
(r) "Exempt Person" means the Company, any Subsidiary of the
Company, 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 as a fiduciary for or pursuant to the terms of any such employee
benefit plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any Subsidiary of the
Company.
(s) "Expiration Date" shall have the meaning specified in
Section 7(a) hereof.
(t) "Final Expiration Date" shall have the meaning specified
in Section 7(a) hereof.
(u) "NASDAQ" shall have the meaning set forth in Section
11(d)(i) hereof.
(v) "Original Rights" shall have the meaning specified in
Section 1(h)(i) hereof.
(w) "Outside Directors" shall have the meaning set forth in
Section 1(a)(iv) hereof.
(x) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any successor (by merger or
otherwise) of such entity.
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<PAGE> 9
(y) "Preferred Stock" shall mean shares of Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company, having the rights, preferences and limitations set forth in the
Certificate of Designation, and, to the extent there are not a sufficient number
of shares of Junior Participating Cumulative Preferred Stock authorized to
permit the full exercise of the then outstanding Rights, any other series of
preferred stock of the Company designated for such purpose by the Board of
Directors of the Company containing terms substantially similar to the terms of
the Junior Participating Cumulative Preferred Stock.
(z) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(aa) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(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 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
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<PAGE> 10
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);
(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 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
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<PAGE> 11
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).
(cc) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(dd) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(ee) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(ff) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(gg) "Rights Agent" shall have the meaning set forth in the
first paragraph of this Agreement.
(hh) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(ii) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(jj) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(kk) "Stock Acquisition Time" shall mean the time of
occurrence of whichever of the following first occurs: (i) the first 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 or (ii)
the communication to the Company (including, without limitation, to the
directors of the Company) of any notice (including, without limitation, any
written consent or notice related thereto) from the Acquiring Person indicating
or reflecting that the Acquiring Person has become such.
(ll) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other
8
<PAGE> 12
persons performing similar functions are at the time beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such Person.
(mm) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(nn) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(oo) "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. Appointment of Rights Agent. The Company hereby
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 Common Stock of the Company) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time act as Co-Rights
Agent or appoint such Co-Rights Agents as it may deem necessary or desirable.
Any actions which may be taken by the Rights Agent pursuant to the terms of this
Agreement may be taken by any such Co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier
of the Close of Business on (i) the tenth day after the date on which the Stock
Acquisition Time occurs, or (ii) the tenth Business Day (or such specified or
unspecified later date on or after the Record Date as may be determined by
action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the commencement by any Person (other than an
Exempt Person) of, or the first public announcement of the intention of any
Person (other than an Exempt Person) to commence, a tender or exchange offer
(other than a Qualifying Offer or an offer approved pursuant to Section
1(a)(iv)) for an amount of Common Stock of the Company which, together with the
shares of such stock already owned by such Person, constitutes 15% or more of
the outstanding Common Stock of the Company (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights) (the
earlier of (i) and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for shares of Common Stock of the Company
registered in the names of the holders of Common Stock of the Company (which
certificates for Common Stock of the Company shall be deemed also to be
certificates for Rights) and not by separate Right Certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying Common Stock. As soon as practicable after the Distribution Date, the
Rights Agent will send, by
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<PAGE> 13
first-class, insured, postage-prepaid mail, to each record holder of Common
Stock of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each share of Common Stock of the
Company so held, subject to adjustment and to the provisions of Section 14(a)
hereof. As of the Close of Business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit C, by first-class,
postage-prepaid mail, to each record holder of its Common Stock as of the Close
of Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for Common Stock of the
Company outstanding as of the Record Date, until the earlier of the Distribution
Date or the Expiration Date, the Rights will be evidenced by such certificates
for Common Stock together with the Summary of Rights. Until the earlier of the
Distribution Date or the Expiration Date, the surrender for transfer of any
certificate for Common Stock of the Company outstanding on the Record Date, with
or without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
(c) Certificates issued by the Company for Common Stock
(whether upon transfer of outstanding Common Stock, original issuance or
disposition from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date shall also be deemed to
be certificates for the Rights and shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between the
Corporation and First Chicago Trust Company of New York dated as of
February 5, 1998, and as it may be amended from time to time (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 Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement (as in effect on the date of mailing) without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights beneficially
owned by an Acquiring Person, or any Associate or Affiliate 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.
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<PAGE> 14
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 Common Stock of the Company represented by such certificates
shall be evidenced by such certificates alone and registered holders of Common
Stock of the Company shall also be the registered holders of the associated
Rights, and the surrender for transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock of the
Company represented by such certificates.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase, certification and assignment to be
printed on the reverse thereof) shall each be substantially in the form set
forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Right Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
one two-hundredths of a share of Preferred Stock as shall be set forth therein
at the price per one two-hundredth of a share of Preferred Stock set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided in this Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company manually or by facsimile
by the Chairman of the Board, any Vice Chairman, the Chief Executive Officer,
the President or any Vice President and also by the Secretary or any Assistant
Secretary. The Right Certificates shall be countersigned by the Rights Agent
manually and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office in New York, New York, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the
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<PAGE> 15
respective holders of the Right Certificates, the number of Rights evidenced by
each of the Right Certificates on its face and the date and certificate number
of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(e) and 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Right Certificate or Right Certificates may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or other securities, cash or assets, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office of the Rights Agent in New York, New York. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or Right Certificates until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate or Right
Certificates 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 Sections 7(e) and 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment from the holders of
Right Certificates 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 such Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a) hereof) in whole
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<PAGE> 16
or in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal office
of the Rights Agent in New York, New York, together with payment of the Purchase
Price for each one two-hundredth of a share of Preferred Stock as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on February 23, 2008 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23, (iii) the time at which the
Rights are exchanged as provided in Section 24, 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 one two-hundredth of a share
of Preferred Stock issued pursuant to the exercise of a Right shall initially be
$145, 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) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by payment (in cash, or by
certified bank check or money order payable to the order of the Company) of the
Purchase Price for the Preferred Stock (or other shares, securities, cash or
other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of the Rights pursuant
hereto in cash, or by certified bank check or money order payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k) hereof, (i) (A)
promptly requisition from any transfer agent of the Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of shares of Preferred Stock to be purchased (and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests), or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing interests in such number of one two-hundredths
of a share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such cash in
lieu of fractional shares to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to
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<PAGE> 17
the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, 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 any Affiliate or
Associate of an Acquiring Person, (ii) a transferee of any such Acquiring Person
(or of any such Affiliate or Associate) who becomes a transferee after such
Acquiring Person becomes such or (iii) a transferee of any such Acquiring Person
(or of any such Affiliate or Associate) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from such
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) are complied with, but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of 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 of any Right
Certificate upon the occurrence of any purported transfer or exercise as set
forth in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate following the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such assignment or 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 Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the
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<PAGE> 18
Company, or shall, at the written request of the Company, destroy such cancelled
Right Certificates and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Section 11(a)(ii) Event or a Section 13 Event, out
of its authorized and unissued shares of Common Stock or other securities or out
of its authorized and issued shares held in its treasury), the number of shares
of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event
or a Section 13 Event, Common Stock of the Company or other securities) that,
as provided in this Agreement, will be sufficient to permit the exercise in full
of all outstanding Rights.
(b) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event or a Section 13 Event in which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
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, acting by resolution of its Board of Directors,
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualifications in such jurisdiction shall not have
been obtained.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one two-hundredths of a share
of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event
or a Section 13 Event, Common Stock of the Company or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.
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(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock (or shares of Common Stock of
the Company or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for shares of Preferred Stock (or shares of Common Stock
of the Company or other securities, as the case may be) in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for shares of
Preferred Stock (or Common Stock of the Company or other securities, as the case
may be) or depositary receipts for Preferred Stock upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for a number of one two-hundredths of a share of Preferred
Stock (or shares of Common Stock of the Company or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of shares of Preferred Stock (or shares of
Common Stock of the Company or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Company's transfer books for the Preferred Stock (or Common Stock or other
securities, as the case may be) are closed, such person shall be deemed to have
become the record holder of such shares (fractional and otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Company's transfer books for the Preferred Stock (or Common Stock or other
securities, as the case may be) are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right 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,
or fractions thereof, 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 or pay a dividend on the Preferred Stock
payable in shares of Preferred
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<PAGE> 20
Stock, (B) subdivide the outstanding Preferred Stock into a greater number of
shares, (C) combine or consolidate the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in Section 7(e) and this
Section 11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock or 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 Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that any
Person, alone or together with its Affiliates and Associates, shall become an
Acquiring Person, then each holder of a Right, except as provided below and in
Section 7(e) hereof, shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one two-hundredths of a share of Preferred
Stock, such number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one two-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of such Section 11(a)(ii)
Event, whether or not such Right was then exercisable, and (y) dividing that
product (which, following such first occurrence, shall thereafter be adjusted as
appropriate in accordance with Section 11(f) hereof and, as so adjusted, 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 per share of the Common Stock
of the Company on the date of such first occurrence (such number of shares being
hereinafter referred to as the "Adjustment Shares"). The Company shall notify
the Rights Agent as to any Persons who are deemed by the Company to be Acquiring
Persons or Associates, Affiliates or transferees (as described in subparagraphs
(ii) and (iii) of Section 7(e) hereof) of such Persons and shall identify any
Rights pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of the
Company in accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of its Board of
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<PAGE> 21
Directors, may, and, in the event that the number of shares of Common 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 exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Company, acting by resolution of
its Board of Directors, shall (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value"),
over (2) the Purchase Price attributable to each Right (such excess, the
"Spread") and (B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for all or any part of the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction
in the Purchase Price, (3) Preferred Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has deemed to have the same
value as shares of Common Stock of the Company (such Preferred Stock or shares
or units of preferred stock hereinafter called "Common Stock Equivalents")), (4)
debt securities of the Company, (5) other assets or (6) any combination of the
foregoing, which, when combined with the Adjustment Shares (if any) to be
issued, has an aggregate value equal to the Current Value, where such aggregate
value has been determined by action of the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company which has theretofore
performed no services for the Company or any Subsidiary of the Company in the
past five years; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the first occurrence of a Section 11(a)(ii) Event, then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock of the
Company (to the extent available) and then, if necessary, cash, which shares 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 Common Stock that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof and the Company, acting by resolution of its Board of
Directors, shall determine in good faith that it is likely that sufficient
additional shares of its Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days after
the occurrence of such Section 11(a)(ii) Event, in order that the Company may
seek stockholder approval for the authorization of such additional shares (such
period as it may be extended, the "Substitution Period"). To the extent that the
Company determines that some action is to be taken pursuant to the terms of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for the
authorization of additional shares 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
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<PAGE> 22
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock of the Company shall be the Current
Market Price per share of the Common Stock of the Company on the date of the
first occurrence of the Section 11(a)(ii) Event, and the per share or per unit
value of any Common Stock Equivalents shall be deemed to equal the Current
Market Price per share of the Common Stock of the Company on such date.
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of shares of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preference Stock")) or securities convertible into shares of
Preferred Stock or Equivalent Preference Stock at a price per share of Preferred
Stock or Equivalent Preference Stock (or having a conversion price per share, if
a security convertible into shares of Preferred Stock or Equivalent Preference
Stock) less than the Current Market Price per share of the Preferred Stock (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of Preferred Stock
and/or Equivalent Preference Stock which the aggregate offering price of the
total number of shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock or Equivalent Preference 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 consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Preferred Stock, but including any dividend payable in stock other
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<PAGE> 23
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which shall
be such Current Market Price per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"Current Market Price" per share of Common Stock of the Company on any date
shall be deemed to be the average of the daily closing prices per share of such
Common Stock of the Company for the thirty (30) consecutive Trading Days
immediately prior to such date; provided, however, that in the event that the
Current Market Price per share of Common Stock of the Company is determined
during a period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into such Common Stock (other than the
Rights) or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, as the case may be, then, and in
each such case, the Current Market Price shall be appropriately adjusted to take
into account the ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock of the Company are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
of the Company are listed or admitted to trading or, if the shares of Common
Stock of the Company 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 Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock of the Company 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 shares of Common Stock of the Company selected
by the Company, acting by resolution of the Board of Directors of the Company,
or, if on any such date no market maker is making a market in shares of Common
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<PAGE> 24
Stock of the Company, the fair value of such shares on such date as determined
in good faith by the Company, acting by resolution of the Board of Directors of
the Company (which determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes). The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the shares of Common Stock of the Company are listed or admitted to
trading is open for the transaction of business or, if the shares of Common
Stock of the Company are not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in the same
manner as set forth for the Common Stock of the Company in Section 11(d)(i)
hereof (other than the last clause of the second sentence thereof). If the
Current Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or listed
or traded in a manner described in Section 11(d)(i) hereof, the Current Market
Price per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 200 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock of the Company occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock of the Company. If
neither the Common Stock of the Company nor the Preferred Stock is publicly held
or so listed or traded, the Current Market Price per share of Preferred Stock
shall mean the fair value per share as determined in good faith by the Company,
acting by resolution of its Board of Directors, whose determination shall be
described in a statement filed with Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market Price of one
two-hundredth of a share of Preferred Stock shall be equal to the Current Market
Price of one share of Preferred Stock divided by 200.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
or the nearest one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Stock, thereafter the Purchase Price and the number of such
other shares so receivable upon exercise of any Right shall be
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<PAGE> 25
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares;
provided, however, that the Company shall not be liable for its inability to
reserve and keep available for issuance upon exercise of the Rights pursuant to
Section 11(a)(ii) a number of shares of its Common Stock greater than the number
then authorized by the Certificate of Incorporation of the Company but not
outstanding or reserved for any other purpose.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one two-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
two-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth of a share of Preferred Stock) obtained by (i) multiplying (A) the
number of one two-hundredths of a share covered by a Right immediately prior to
such adjustment of the Purchase Price by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one two-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one two-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
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<PAGE> 26
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock, or fraction thereof, issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
two-hundredth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the one
two-hundredth of a share of Preferred 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 nonassessable shares of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Stock, or a fraction thereof, and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company, acting by resolution of its Board of Directors
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance wholly for cash of
any Preferred Stock at less than the Current Market Price, issuance wholly for
cash of Preferred Stock or securities which by their terms are convertible into
or exchangeable for
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<PAGE> 27
Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction 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, cash flow or earning
power aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company 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, Section 24 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 eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time after the date of
this Agreement and prior to the Distribution Date (i) declare or pay any
dividend on its Common Stock payable in Common Stock of the Company or (ii)
subdivide its outstanding Common Stock into a greater number of shares (by
reclassification or otherwise than by payment of dividends in Common Stock) or
(iii) combine or consolidate its outstanding Common Stock into a smaller number
of shares, then in any such case, (x) the number of one two-hundredths of a
share of Preferred Stock purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one two-hundredths
of a share of Preferred Stock so purchasable immediately prior to such event by
a fraction, the numerator of which is the number of shares of Common Stock of
the Company outstanding immediately before such event and the denominator of
which is the number of shares of such Common Stock outstanding immediately after
such event and (y) action shall be taken such that each share of Common Stock of
the Company outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common Stock of the
Company outstanding immediately prior to such event had
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<PAGE> 28
issued with respect to it. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected. If an event occurs
which would require an adjustment under Section 11(a)(ii) and this Section
11(p), the adjustments provided for in this Section 11(p) shall be in addition
and prior to any adjustment required pursuant to Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13, 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 its Common Stock and
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or if prior to the Distribution Date, to
each holder of a certificate representing shares of its Common Stock) in
accordance with Section 26 of this Agreement. Notwithstanding the foregoing
sentence, the failure of the Company to make such certificates or give such
notice shall not affect the validity or the force or effect of the requirement
for such adjustment. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained. Any adjustment to be
made pursuant to Sections 11 and 13 shall be effective as of the date of the
event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power. (a) In the event (a "Section 13 Event")
that, following the Stock Acquisition Time, directly or indirectly, (x) the
Company shall consolidate or otherwise combine with or merge with or into, any
other Person (other than a wholly owned Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) and the Company shall not
be the surviving or continuing corporation of such consolidation, combination or
merger, (y) any Person (other than a wholly owned Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate or
otherwise combine with or merge with or into the Company and the Company shall
be the surviving or continuing corporation of such consolidation, combination or
merger and, in connection therewith, all or part of the Common Stock of the
Company shall be changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or more transactions, assets, cash flow or
earning power aggregating more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole and calculated on
the basis of the Company's most recent regularly prepared financial statement)
to any other Person or Persons (other than the Company or any wholly owned
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as provided in
Section 13(d) hereof), proper 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
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<PAGE> 29
issued, fully paid, nonassessable and freely tradable shares of Common Stock of
the Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of call, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by dividing the then current Purchase
Price by 50% of the Current Market Price per share of Common Stock of such
Principal Party on the date of consummation of such merger, consolidation, sale
or transfer (provided that the Purchase Price and the number of shares of Common
Stock of such Principal Party so receivable upon exercise of a Right shall, from
and after such Section 13 Event, be subject to further adjustment in accordance
with Section 11(f) hereof to reflect any events occurring in respect of the
Common Stock of such Principal Party after the occurrence of such Section 13
Event); (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9 hereof) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be possible, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, or (B) if
no securities are so issued, (x) the Person that is the other party to
such merger, and if such Person survives such merger, or (y) if the
Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company
if it survives) or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered,
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"Principal Party" shall refer to such other Person; and (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement containing the provisions
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) 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, subject to
Section 7(e) hereof, become exercisable in the manner described in Section 13(a)
hereof.
(d) The Company covenants and agrees that it will not, after
the occurrence of a Section 11(a)(ii) Event, engage in any Section 13 Event if
at the time of or after such event there are any charter or by-law provisions or
any rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractions of Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall
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be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use,
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights (selected by the Company, acting by
resolution of its Board of Directors). If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Company, acting by resolution of its Board of
Directors shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one two-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares (other than
fractions which are integral multiples of one two-hundredth of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
two-hundredth of a share of Preferred Stock may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of depositary receipts shall have all
the rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Stock. In lieu of fractional shares which are not
integral multiples of one two-hundredth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one share of Preferred
Stock. For purposes of this Section 14(b), the current market value of a share
of Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Section 11(a)(ii) Event or a
Section 13 Event, the Company shall not be required to issue fractions of shares
of its Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of its Common Stock. In lieu of fractional
shares of its Common Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein
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<PAGE> 32
provided an amount in cash equal to the same fraction of the current market
value of one share of its Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock of the Company shall be the
closing price of one share of Common Stock of the Company (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
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 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Stock of the Company); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of Common Stock of the
Company), without the consent of the Rights Agent or of any holder of any other
Right Certificate (or, prior to the Distribution Date, of Common Stock of the
Company) may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is 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 hereunder and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting such Right consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Close of Business on the earlier of the
Distribution Date or the Expiration Date, the Rights shall be evidenced by the
certificates for shares of Common Stock of the Company registered in the name of
the holders of such shares (which certificates for shares of Common Stock of the
Company shall also constitute certificates for Rights) and each Right will be
transferable only in connection with the transfer of Common Stock of the
Company;
(b) after the Distribution Date, the Right 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;
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(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right or Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of one
two-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. (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.
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<PAGE> 34
(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 Right
Certificate or certificate for Preferred Stock or Common Stock of the Company or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. The purchase of all or substantially all of the
Rights Agent's assets employed in the performance of transfer agent activities
shall be deemed a merger or consolidation for purposes of this Section 19. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel selected
by it (which may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of an Acquiring Person and
the determination of the Current Market Price per share of Preferred Stock and
Common Stock) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President (if any) or any Vice President and by 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
Right Certificates (except 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 Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it be
responsible for any determination by the Board of Directors of the Company of
the Current Market Price of the Preferred Stock or Common Stock of the Company;
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock of
the Company or Preferred Stock or other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock or Common Stock of the Company or other securities will, when issued, be
validly authorized and issued, fully paid and nonassessable.
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(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President (if any), any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or to holders of
the Rights resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the 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 for it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common
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Stock of the Company and Preferred Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock of the Company and Preferred
Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of New York or of the State of Michigan (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 State of New York or the State of
Michigan), in good standing, having a principal office in the State of New York
or the State of Michigan, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $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 its Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by resolution of its Board of
Directors, to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of its Common Stock following the Distribution Date (other than upon
exercise of a Right) and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise of
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<PAGE> 38
stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company,
and (b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right 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 Right Certificate would be issued and (ii) no such Right
Certificate shall be issued if and to the extent that appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Company may, by resolution of
its Board of Directors, at its option, at any time prior to the earlier of (x)
the Stock Acquisition Time or (y) the Close of Business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right (payable in cash, shares of Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors of the Company), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (or at such time subsequent to
such action as the Board of Directors may determine), and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock of the Company. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase any Rights at any time in any manner other than that specifically set
forth in this Section 23 or Section 24 hereof and other than in connection with
the repurchase of Common Stock of the Company prior to the Distribution Date.
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 7(e) hereof) for shares of Common Stock at an exchange
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ratio of one share of Common Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 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 Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute shares of Preferred Stock (or any other series of
preferred stock of the Company containing terms substantially similar to the
terms of the Preferred Stock) for some or all of the shares of Common Stock
exchangeable for Rights, at the initial rate of one two-hundredth of a share of
Preferred Stock (or of such other series of preferred stock of the Company) for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to the terms thereof, so that
the fraction of a share of Preferred Stock (or of such other series of preferred
stock of the Company) delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock (or any other series of preferred stock of the
Company containing terms substantially similar to the terms of the Preferred
Stock) issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
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additional shares of Common Stock or Preferred Stock (or such other series of
preferred stock of the Company) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares, the Company shall pay
to the registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (d), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
Section 25. Notice of Certain Events. (a) In case the Company
shall at any time after the earlier of the Distribution Date or the Stock
Acquisition Time propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular periodic dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders
of Preferred Stock options, rights or warrants to subscribe for or to purchase
any additional Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any merger,
consolidation or other combination into or with, or to 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,
cash flow 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 Right, 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 or distribution of rights or warrants, or the date on which such
reclassification, merger, consolidation, combination, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock of the Company or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty days
prior to the record date for determining holders of Preferred Stock for purposes
of such action, and in the case of any such other action, at least twenty days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock of the Company or Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
37
<PAGE> 41
(b) In case any of the events set forth in Section 11(a)(ii)
or Section 13(a) of this Agreement shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder of a Right,
to the extent feasible and in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) or Section 13(a) hereof,
and (ii) all references in Section 25(a) hereof to Preferred Stock shall be
deemed thereafter to refer also to Common Stock or other securities issuable in
respect of the Rights.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Chrysler Corporation
1000 Chrysler Drive
Auburn Hills, Michigan 48326-2766
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
First Chicago Trust Company
of New York
Suite 4660
525 Washington Boulevard
Jersey City, New Jersey 07310
Attention: Tenders and Exchange
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or if prior
to the Distribution Date to each holder of a certificate representing shares of
Common Stock of the Company) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such Right holder (or if prior
to the Distribution Date to such holder of Common Stock of the Company) at the
address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Time and subject to the penultimate sentence of this Section 27, the
Company may, by resolution of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without
38
<PAGE> 42
the approval of any holders of certificates representing shares of Common Stock
of the Company. From and after the Stock Acquisition Time and subject to the
penultimate sentence of this Section 27, without the approval of any holders of
certificates representing shares of Common Stock of the Company or of Right
Certificates, the Company may, by resolution of its Board of Directors, and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement or make any other provisions in any manner which
the Company may deem necessary or desirable, which shall not adversely affect
the interests of, or diminish substantially or eliminate the benefits intended
to be afforded by the Rights to, the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of any such Person); provided,
however, that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed or to modify the ability (or inability) of the Board
of Directors of the Company to redeem the Rights, in either case at such time as
the Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of or the benefits to the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of any such Person). 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 or the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 28. Successor. 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. (a) For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
(with, where specifically provided for herein, the concurrence of the Outside
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to such
Board of Directors (with, where specifically provided for herein, the
concurrence of the Outside Directors), 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
39
<PAGE> 43
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement and a determination of whether an
offer constitutes a Qualifying Offer). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company (with, where specifically provided for herein, the
concurrence of the Outside Directors), the Outside Directors or the Company in
good faith, (x) shall be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties and
(y) shall not subject the Board of Directors of the Company or the Outside
Directors to any liability to the holders of the Rights and Right Certificates.
(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 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 Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock of the Company)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock of the Company).
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 of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day following the date of such determination by the Board of
Directors.
40
<PAGE> 44
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
41
<PAGE> 45
SIGNATURE
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Signatures
Attest: CHRYSLER CORPORATION
By /s/ Holly Leese By /s/ T. P. Capo
--------------------- ---------------------
Name: Holly Leese Name: T. P. Capo
Title: Assistant Secretary Title: Vice President and
Treasurer
Attest: FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By /s/ Gerard J. O'Leary By /s/ Joanne Gorostiola
--------------------- ---------------------
Name: Gerard J. O'Leary Name: Joanne Gorostiola
Title: Vice President Title: Assistant Vice President
42
<PAGE> 46
EXHIBIT A
CHRYSLER CORPORATION
Certificate of Designation
Pursuant to Section 151
of the General Corporation Law
of the State of Delaware
Certificate of Designation
Junior Participating Cumulative Preferred Stock
We, F.W. Zuckerman and A.E. Micale, being, respectively, a Vice President
and the Assistant Secretary of Chrysler Corporation, a corporation organized and
existing under the General Corporation Law of Delaware (the "Corporation"), do
hereby certify:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its Restated Certificate of
Incorporation, the Board of Directors on February 4, 1988 duly adopted the
following resolution:
RESOLVED that this Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Restated Certificate of Incorporation of
the Corporation, hereby authorizes the issue of a series of Preferred Stock of
the Corporation and hereby fixes the designation, relative powers, preferences
and rights, and the qualifications, limitations or restrictions thereof, as
follows:
Section 1. Designation and Number of Shares. 2,500,000 shares of the
Preferred Stock of the Corporation shall constitute a series of Preferred Stock
designated as Junior Participating Cumulative Preferred Stock, (hereinafter
referred to as the "Junior Preferred Stock"). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Junior Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights,
<PAGE> 47
or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
Section 2. Dividends and Distributions. (A) Subject to the rights of
the holders of any shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock, par value $1.00 of the Corporation (the "Common Stock")
and of any other junior stock which may be outstanding, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the fifteenth
day of January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $2.50 per share ($10.00 per
annum), or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Junior Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Junior Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of
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<PAGE> 48
$2.50 per share ($10.00 per annum) on the Junior Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares or Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Junior Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall accumulate
but shall not bear interest. Dividends paid on the shares of Junior Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Junior Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment as hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof to 100
votes (and each one one-hundredth of a share of Junior Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
3
<PAGE> 49
(B) Except as otherwise provided herein, in the Restated Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock, or by law, the holders of shares of Junior
Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as provided herein, in Section 10 or by applicable law,
holders of Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for authorizing or taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on any shares or stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock except dividends paid ratably on the Junior
Preferred Stock, and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with the
Junior Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends
4
<PAGE> 50
or upon liquidation, dissolution or winding-up) with the Junior
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series classes, shall
determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever,
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock, without designation as to series, and may be reissued as part
of a new series of preferred stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein, in the Restated Certificate of Incorporation, in any other
certificate of designation creating a series of preferred stock or any similar
stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding-Up. Upon any voluntary
or involuntary liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding-up) to the
Junior Preferred Stock unless prior thereto, the holders of shares of Junior
Preferred Stock shall have received the higher of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of Common
Stock; nor shall any distribution be made (B) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding-up)
with the Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding-up. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
5
<PAGE> 51
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event under the provision in clause (A) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case each share of Junior Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Junior Preferred Stock shall
not be redeemable.
Section 9. Rank. Unless otherwise provided in the Restated Certificate
of Incorporation of the Corporation or a Certificate of Designation relating to
a subsequent series of preferred stock of the Corporation, the Junior Preferred
Stock shall rank junior to all other series of the Corporation's preferred stock
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding-up, and senior to the Common Stock of this Corporation.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
6
<PAGE> 52
materially alter or change the powers, preferences or special rights of the
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Junior
Preferred Stock, voting together as a single series.
Section 11. Fractional Shares. Junior Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Junior Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its Vice President and attested by its Assistant
Secretary this 17th day of February, 1998.
/s/ F.W. ZUCKERMAN
-------------------------
F.W. Zuckerman
Vice President
ATTEST:
/s/ A.E. MICALE
- ----------------------
A.E. Micale
Assistant Secretary
7
<PAGE> 53
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 23, 2008 OR EARLIER IF THE BOARD OF DIRECTORS
ORDERS THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS
HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
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 5, 1998, as the same may be amended from time to
time (the "Rights Agreement"), between Chrysler Corporation, a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, 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 23, 2008, at the
principal office of the Rights Agent, or its successors as Rights Agent, one
two-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 $145 per one two-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 two-hundredths of a share of Preferred Stock
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per one two-hundredth of a share of Preferred Stock set forth above, are
the number and Purchase Price as of February 23, 1998, based on the shares of
Preferred Stock as constituted at such date.
<PAGE> 54
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
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person (or of any Associate
or Affiliate thereof) who becomes a transferee after such Acquiring Person (or
any Associate or Affiliate thereof) becomes such or (iii) under certain
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.
As provided in the Rights Agreement, the Purchase Price and
the number of one two-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.
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 two-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.
2
<PAGE> 55
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 $.01 per Right at any time prior to the earlier of (i) the
Stock Acquisition Time (as defined in the Rights Agreement) and (ii) the close
of business on the Expiration Date (as 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).
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 two-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
Other than those provisions relating to the redemption price
of the Rights and the Expiration Date, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company in any respect
whatsoever up until the Stock Acquisition Time and thereafter in certain
respects which do not adversely affect the interests of holders of Right
Certificates (other than an Acquiring Person or the Affiliates or Associates
thereof).
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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 __________, _____.
3
<PAGE> 56
ATTEST: CHRYSLER CORPORATION
By
- --------------------------- -------------------------
Secretary Title:
Countersigned:
First Chicago Trust Company
of New York
By
-------------------------
Authorized Signature
4
<PAGE> 57
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfers unto
___________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________ Attorney,
to transfer the within Right Certificate on the books of the within named
Company, with full power of substitution.
Dated:_____________, ____
___________________________
Signature
Signatures Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate
<PAGE> 58
thereof (as defined in the Rights Agreement); and (2) after due inquiry and to
the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
---------------------------
Signature
2
<PAGE> 59
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
3
<PAGE> 60
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Chrysler Corporation:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the
- ---------------
shares of Preferred Stock issuable upon the exercise of such 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:
Please insert social security
or other identifying number
- -----------------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- -----------------------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------------------
Dated: ,
------------------ ----
4
<PAGE> 61
[Form of Election to Purchase -- continued]
--------------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Right
Certificate.)
Signature Guaranteed:
- --------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement); (2) after due inquiry
and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person of an Affiliate or Associate thereof.
--------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Rights Certificate.
5
<PAGE> 62
EXHIBIT C
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.
CHRYSLER CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On February 4, 1998, 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"). The following is a
summary of the terms of the Rights.
Each Right entitles the registered holder to purchase from the
Company one two-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 $145 per one two-hundredth of a share of Preferred Stock,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement, dated as of February 5, 1998 (the
Rights Agreement, as it may be amended from time to time, is hereinafter
referred to as the "Rights Agreement") between the Company and First Chicago
Trust Company of New York, 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 or notice to the Company 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) or an offer approved by the Board of Directors of
the Company and (ii) ten business days (or, if determined by the Board of
Directors, a specified or unspecified later date) following the commencement or
announcement of an intention to make a tender offer or exchange offer which, if
successful, would cause the bidder to own 15% of more of the outstanding Common
Stock.
<PAGE> 63
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 Qualifying 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 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 not 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
2
<PAGE> 64
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 23, 1998, upon
transfer, new issuance or reissuance 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 in
connection with issuance of Common Stock pursuant to employee stock plans,
options and certain convertible securities, and 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 23, 2008, 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, 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,
Preferred 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.
3
<PAGE> 65
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.
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 two-hundredth
of a share of Preferred Stock which may, upon the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Time
and the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 Redemption
Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Person of 50% or more of the outstanding shares
of Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights beneficially owned by such Person which have become void), in
whole or part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment). The Company, at its option, may substitute one
two-hundredth (subject to adjustment) of a share of Preferred Stock (or other
4
<PAGE> 66
series of substantially similar preferred stock of the Company) for each share
of Common Stock to be exchanged.
Each share of Preferred Stock purchasable upon exercise of the
Rights will have a minimum preferential dividend of $10 per year, but will be
entitled to receive, in the aggregate, a dividend of 200 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 $200 per share, but will be entitled to receive an
aggregate liquidation payment equal to 200 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 200 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 Redemption Price
and expiration date 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 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 the time period governing
redemption shall be made at such time as the Rights are not redeemable.
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.
5
<PAGE> 67
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form 8-A dated February
[5], 1998. Copies of the Rights Agreement are available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, as it may
be amended from time to time, which is hereby incorporated herein by reference.
6
