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Form 8-A
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
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(Exact name of registrant as specified in its charter)
Delaware 38-2673623
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(State of incorporation or organization) (IRS Employer Identification No.)
1000 Chrysler Drive
Auburn Hills, Michigan 48326-2766
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(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 Pacific Exchange, Inc.
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
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(Title of Class)
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ITEM 1. Description of Registrant's Securities to
be Registered
On February 4, 1998, the Board of Directors of Chrysler Corporation
(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
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
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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 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
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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 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).
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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.
Exercisability
The Rights are not exercisable until the Dis tribution 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
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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
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
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The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of Preferred Stock of certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of Preferred Stock or (iii) upon the
distribution to holders of Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above). The number of Rights and number of shares of Preferred Stock
issuable upon the exercise of each Right are also subject to adjustment in the
event of a stock split, combination or stock dividend on the Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one 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.
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.
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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 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
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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 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 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.
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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: February 13, 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
Page
----
Section 1. Certain Definitions..............................................2
Section 2. Appointment of Rights Agent.....................................14
Section 3. Issue of Right Certificates.....................................15
Section 4. Form of Right Certificates......................................18
Section 5. Countersignature and Registration...............................19
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates....................................................20
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...22
Section 8. Cancellation and Destruction of Right Certificates..............26
Section 9. Reservation and Availability of Capital Stock...................26
Section 10. Preferred Stock Record Date.....................................29
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights................................................30
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......47
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power.....................................48
Section 14. Fractional Rights and Fractional Shares.........................53
Section 15. Rights of Action................................................56
Section 16. Agreement of Right Holders......................................57
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Section 17. Right Certificate Holder Not Deemed a Stockholder...............58
Section 18. Concerning the Rights Agent.....................................59
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......60
Section 20. Duties of Rights Agent..........................................61
Section 21. Change of Rights Agent..........................................65
Section 22. Issuance of New Right Certificates..............................67
Section 23. Redemption......................................................68
Section 24. Exchange........................................................69
Section 25. Notice of Certain Events........................................72
Section 26. Notices.........................................................74
Section 27. Supplements and Amendments......................................75
Section 28. Successor.......................................................76
Section 29. Determinations and Actions by the Board of Directors, etc.......76
Section 30. Benefits of this Agreement......................................78
Section 31. Severability....................................................78
Section 32. Governing Law...................................................79
Section 33. Counterparts....................................................79
Section 34. Descriptive Headings............................................80
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Signatures..................................................................80
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
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become the Beneficial Owner of 15% or more of the shares of Common Stock
of the Company by reason of share purchases by the Company and shall,
after such share purchases by the Company, 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
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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.
(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 "bene-
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ficially 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 Ex change 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
(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
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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.
(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 Sec tion 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.
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(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.
(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
contain ing 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
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<PAGE> 11
expenses, together with copies of all written materials prepared by such
person for such financial institutions in connection with obtaining such
financial commitments;
(ii) such offer is conditioned such that it cannot be consummated
unless after the consummation of such offer, such Person, alone or
together with any of its Affiliates and Associates, owns shares of Common
Stock representing a majority of the then outstanding shares of Common
Stock;
(iii) such offer remains open for at least 60 Business Days;
provided, however, that (A) if there is any increase in the price of such
offer, such offer must remain open for at least an additional 20 Business
Days after the last such increase, (B) such offer must remain open for at
least 20 Business Days after the date that any bona fide alternative offer
is made which, in the opinion of one or more investment banking firms
designated by the Company, provides for consideration per share in excess
of that provided for in the Qualifying Offer, and (C) such offer must
remain open for at least 20 Business Days after the date on which such
Person reduces the per share price offered as described in clause (v)(B)
below; provided further, however, that such offer need not remain open, as
a result of this clause (iii), beyond (y) the time which any other offer
satisfying the criteria for a Qualifying Offer is then required to be kept
open under this clause (iii), or (z) the scheduled expiration date of any
other tender or exchange offer for shares of Common Stock with respect to
which the Board of Directors has agreed to redeem the Rights immediately
prior to acceptance for payment of shares of Common Stock thereunder
(unless such other offer is terminated prior to its expiration without any
shares of Common Stock having been purchased thereunder);
(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
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<PAGE> 12
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
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
Sec tion 11(a)(ii) hereof.
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<PAGE> 13
(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 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 Sec
tion 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.
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<PAGE> 14
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 certifi cates 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 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 Exhib it 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.
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<PAGE> 15
(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.
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
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<PAGE> 16
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 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 provi sions 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
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<PAGE> 17
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 Cer tificate 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
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.
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(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 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
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<PAGE> 19
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 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 Sec tion 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.
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(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.
(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
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<PAGE> 21
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 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,
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<PAGE> 22
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 Sec
tion 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 Sec tion 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that any Person,
alone or toge ther 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 Directors, may, and, in the event that the number of shares of
Common Stock which are au thorized 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
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<PAGE> 23
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 Sec tion 11(a)(ii) Event, in order that the Company may
seek stockholder approval for the autho rization 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 Sec tion
11(a)(iii) and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock of the Company shall
be the Current Market Price per share of the Common Stock of the
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<PAGE> 24
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 connec tion 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 than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Sec tion
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined
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<PAGE> 25
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> 26
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 Sec tion 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive
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<PAGE> 27
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 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 Sec tion 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 elec tion 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
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<PAGE> 28
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 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 ad justed Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Stock, or a fraction thereof, and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Pre ferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; 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.
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<PAGE> 29
(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 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
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<PAGE> 30
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 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 Sec tion 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
26
<PAGE> 31
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 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 con solidation, 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
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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, "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
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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 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
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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 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
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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;
(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
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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 admin istration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any 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
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<PAGE> 37
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 suc cessor 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:
(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.
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(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
Sec tion 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.
(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
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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 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
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<PAGE> 40
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 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.
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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 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.
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(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 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
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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, dis solution 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.
(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,
39
<PAGE> 44
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 suffi ciently 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 resolu tion of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without the
approval of any holders of 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
40
<PAGE> 45
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
determinations deemed necessary or advisable for the administration of this
Agreement
41
<PAGE> 46
(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.
42
<PAGE> 47
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.
43
<PAGE> 48
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.
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 By
----------------------------- -----------------------------------
Name: Name:
Title: Title:
44
<PAGE> 49
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
<PAGE> 50
share of Preferred Stock set forth above, are the number and Purchase Price as
of Febru ary 23, 1998, based on the shares of Preferred Stock as constituted at
such date.
From and after the first occurrence of a Section 11(a)(ii) Event (as
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an 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
2
<PAGE> 51
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at a
redemption price of $.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.
3
<PAGE> 52
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________, _____.
ATTEST: CHRYSLER CORPORATION
By
- --------------------------- ---------------------------
Secretary Title:
Countersigned:
First Chicago Trust Company
of New York
By
-------------------------
Authorized Signature
4
<PAGE> 53
[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:
<PAGE> 54
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); 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> 55
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> 56
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> 57
[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 evi denced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Rights Certificate.
5
<PAGE> 58
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> 59
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
2
<PAGE> 60
original offer (including any amendment thereof) if such original offer does not
result in the tender of the number of shares of Common Stock required to be
purchased pursuant to clause (ii) above, unless another tender offer by another
party for all outstanding shares of Common Stock is commenced that (y)
constitutes a Qualifying Offer or (z) is approved by the Board of Directors of
the Company (in which event, any new offer by such Person or of any of its
Affiliates or Associates must be at a price no less than that provided for in
such approved offer).
The Rights Agreement provides that, until the Distribution Date, (i)
the Rights will be transferred with and only with the Common Stock, (ii) new
Common Stock certificates issued after February 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.
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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. 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.
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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
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.
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The term "Voting Stock" means (i) the shares of Common Stock of the
Company and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the shares of Common Stock in respect of any merger, consolidation, sale of all
or substantially all of the Company's assets, liquidation, dissolution or
winding up.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to 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.
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