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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: September 3, 1996
BALDWIN PIANO & ORGAN COMPANY
(Exact name of registrant as specified in its charter)
Delaware 0-14903 31-1091812
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
422 Wards Corner Road, Loveland, Ohio 45140-8390
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 576-4500
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Item 5. Other Events
On September 3, 1996, the Board of Directors (the "Board") of Baldwin
Piano & Organ Company (the "Company") adopted a Rights Agreement (the
"Agreement") and declared a dividend distribution of one Common Share Purchase
Right (the "Rights") for each share of the Company's Common Stock, $.01 par
value (the "Common Stock"), outstanding as of September 10, 1996. The Rights are
exercisable if a party acquires 15 percent or more of the Common Stock, or
announces a tender offer to do so, without the consent of the Board. The initial
purchase price for each share of Common Stock purchasable upon the exercise of a
Right is $60 and is subject to change upon the occurrence of certain events. The
Rights will expire as of the close of business on September 3, 2006, if they are
not redeemed prior to that time. Further details regarding the Rights are
provided in the copy of the Agreement attached hereto as Exhibit 2.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 Rights Agreement between Baldwin Piano & Organ Company and The Provident
Bank dated as of September 4, 1996.
99.1 Press Release dated September 4, 1996.
99.2 Form of Letter to Shareholders dated September 10, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALDWIN PIANO & ORGAN COMPANY
(Registrant)
Date: September 13, 1996 By: Karen L. Hendricks
Karen L. Hendricks
President and Chief Executive Officer
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EXHIBIT 2.1
BALDWIN PIANO & ORGAN COMPANY
and
THE PROVIDENT BANK
Rights Agent
RIGHTS AGREEMENT
Dated as of September 4, 1996
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TABLE OF CONTENTS
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issue of Right Certificates
Section 4. Form of Right Certificates
Section 5. Execution, Authentication and Delivery
Section 6. Registration, Registration of Transfer and Exchange
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights
Section 9. Cancellation of Right Certificates
Section 10. Authorization of Shares
Section 11. Record Date
Section 12. Adjustment of Purchase Price, Number of Shares or Number
of Rights
Section 13. Certificate of Adjusted Purchase Price or Number of Shares
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power
Section 15. Fractional Rights and Fractional Shares
Section 16. Rights of Action
Section 17. Agreement of Right Holders
Section 18. Right Certificate Holder Not Deemed a Stockholder
Section 19. Concerning the Rights Agent
Section 20. Duties of Rights Agent
Section 21. Merger or Consolidation or Change of Name of Rights Agent
Section 22. Change of Rights Agent
Section 23. Issuance of New Right Certificates
Section 24. Redemption
Section 25. Mandatory Redemption and Exchange
Section 26. Notice of Certain Events
Section 27. Securities Laws Registrations
Section 28. Notices
Section 29. Supplements and Amendments
Section 30. Successors
Section 31. Benefits of this Agreement
Section 32. Severability
Section 33. Governing Law
Section 34. Counterparts
Section 35. Descriptive Headings
Exhibits
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
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RIGHTS AGREEMENT
This Rights Agreement, dated as of September 4, 1996, is between
Baldwin Piano & Organ Company, a Delaware corporation (the "Company"), and The
Provident Bank, as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the Holders of record of
Common Shares of the Company outstanding on September 10, 1996 of one Right with
respect to each Common Share of the Company outstanding on September 10, 1996,
and has further authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between September 10, 1996
and the earlier of the Distribution Date, the Redemption Date and the Final
Expiration Date; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the terms and conditions under which the Rights are to be
distributed, including without limitation those affecting the exercise thereof,
the securities or other property to be acquired thereby and the purchase price
to be paid therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of the Rights to
the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"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 Voting Shares then outstanding, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any trustee of or fiduciary with respect
to any such plan when acting in such capacity, or (ii) any Person who became the
Beneficial Owner of 15% or more of the Voting Shares prior to September 4, 1996
(an "Existing Owner"); provided however that, if an Existing Owner shall, after
such date and at a time when an Existing Owner is the Beneficial Owner of 15% or
more of the Voting Shares then outstanding, become the Beneficial Owner of
additional Voting Shares representing more than 1% of the Voting Shares, then
such Existing Owner shall be deemed to be an "Acquiring Person." Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Voting Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Voting Shares then outstanding;
provided, however, that, if a Person shall become the Beneficial Owner of 15% or
more of the Voting Shares then outstanding by reason of share purchases by the
Company and shall after such share purchases by the Company and at a time when
such Person is the Beneficial Owner of 15% or more of the Voting Shares then
outstanding, become the Beneficial Owner of additional Voting Shares
representing more than 1% of the Voting Shares, then such Person shall be deemed
to be an "Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors determines
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in good faith that a Person who would otherwise be an "Acquiring Person", as
defined pursuant to the prior sentence of this paragraph, has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer, be an "Acquiring
Person," as defined pursuant to this paragraph, then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
"Agreement" shall mean this Rights Agreement as hereafter amended from
time to time.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "own beneficially" any securities that (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of either Section
13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding voting
or disposing of any securities of the Company; provided, however, that, for
purposes of each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; and provided, further, that, for purposes of each
clause of this definition, a Person shall not be deemed the Beneficial Owner of,
or to own beneficially, any security as a result of any agreement, arrangement
or understanding to vote such security, but only if such agreement, arrangement
or understanding (1) arises solely from a revocable proxy given to such Person
in response to a proxy solicitation made pursuant to a publicly-filed Schedule
14A or any comparable or successor form under the Exchange Act, and (2) is not
also then reportable on Schedule 13D under the Exchange Act or any comparable or
successor form.
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Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding", when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Ohio are authorized or
obligated by law or executive order to close.
"Board of Directors" shall mean the Board of Directors of the Company;
provided, however, that, notwithstanding anything in this Agreement to the
contrary, any action required or permitted to be taken by the Board of Directors
under this Agreement, including, without limitation, any action to redeem the
Rights under Section 24, to exchange the Rights under Section 25, or to
supplement or amend this Agreement under Section 29, shall only be taken and
shall only be effective if there are one or more Continuing Directors in office
at the time of such action and such action is authorized by a majority of the
Continuing Directors.
"Close of Business" on any given date shall mean 5:00 P.M., Cincinnati,
Ohio time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Cincinnati, Ohio time, on the next succeeding
Business Day.
"Closing Price", with respect to any security, shall mean the last sale
price, regular way, on a specific Trading Day or, in case no such sale takes
place on such Trading 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 on the principal
national securities exchange on which such security is listed or admitted to
trading or, if such security is not then listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or such other system then in use, or, if on any such Trading
Day such security is 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 such security selected by the Board of Directors. If such security
is not publicly held or so listed or traded, "Closing Price" shall mean the fair
value per unit of such security as determined in good faith by the Board of
Directors, whose determination shall be described and the Closing Price set
forth in a statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall mean
shares of capital stock of the Company which have no preference over any other
class of stock with respect to dividends or assets, which are not redeemable at
the option of the Company and with respect to which no sinking, purchase or
similar fund is provided and shall initially mean the shares of Common Stock,
$.01 par value, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a corporation,
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person
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is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person and, if used with reference to any other
Person, mean the equity interest in such Person (or, if the net worth determined
in accordance with generally accepted accounting principles of another Person
(other than an individual) which controls such first-mentioned Person is greater
than such first-mentioned Person, then such other Person) with the greatest
voting power or managerial power with respect to the business and affairs of
such Person.
"Company" shall mean Baldwin Piano & Organ Company, a Delaware
corporation, and its successors. Where any action on the part of the Company is
required or permitted in this Agreement, such action shall be taken or
authorized by the Board of Directors.
"Company Order" means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Rights Agent.
"Continuing Director" shall mean (i) any member of the Board of
Directors, who, while such person is a member of the Board of Directors, is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the date of this Agreement, or (ii) any
Person who after the date of this Agreement becomes a member of the Board of
Directors and who, while such Person is a member of the Board of Directors, is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or
a representative of an Acquiring Person or of any such Affiliate or Associate,
if such Person's nomination for election or election to the Board of Directors
is recommended or approved by a majority of the Continuing Directors, or (iii)
any Person who subsequently becomes a member of the Board of Directors who,
while such Person is a member of the Board of Directors, is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such Person's
election to the Board of Directors is solely the result of a proxy solicitation
made pursuant to a publicly-filed Schedule 14A or any comparable or successor
form under the Exchange Act.
"Corporate Trust Office" means the principal office of the Rights Agent
at which it administers its corporate trust business.
"Distribution Date" shall mean the earlier of (i) the tenth day after
the Shares Acquisition Date or (ii) the tenth Business Day (or such later date
as may be determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of commencement by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any trustee
of or fiduciary with respect to any such plan when acting in such capacity) of,
or after the date of the first public announcement of the intent of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the
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Beneficial Owner of 15% or more of the then outstanding Voting Shares; provided,
however, that an occurrence described in clause (ii) of this definition above
shall not cause the occurrence of the Distribution Date if the Board of
Directors shall, prior to such tenth Business Day (or such later dale as
described in clause (ii) above), determine that such tender or exchange offer is
spurious, unless, thereafter, the Board of Directors shall make a contrary
determination, in which event the Distribution Date shall occur on the later to
occur of such tenth Business Day (or such later date as described in clause (ii)
above) and the date of such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on September
3, 2006.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean the initial price at which the holder of a
Right may, subject to the terms and conditions of this Agreement, purchase one
Common Share (which initial price is set forth in Section 8(b) herein), as such
price shall be adjusted pursuant to the terms of this Agreement.
"Redemption Date" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein or the time at which all of the Rights are
mandatorily redeemed and exchanged pursuant to Section 25 hereof.
"Redemption Price" shall have the meaning specified in Section 24(b)
herein.
"Right" shall mean one Common Share purchase right which initially
represents the right of the registered holder thereof to purchase one Common
Share upon the terms and subject to the conditions herein set forth.
"Right Certificate" shall mean a certificate, in substantially the form
of Exhibit A attached to this Rights Agreement, evidencing the Rights registered
in the name of the holder thereof.
"Rights Agent" shall mean The Provident Bank, and any successor thereto
appointed in accordance with the terms hereof, in its capacity as agent for the
Company and the holders of the Rights pursuant to this Agreement.
"Rights Register" and "Rights Registrar" shall have the meanings
specified in Section 6.
"Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include without
limitation a report filed pursuant to Section 13(d)
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or Section 16(a) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the outstanding capital stock or other equity interests
having ordinary voting power in the election of directors or similar officials
is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase Common
Shares in substantially the form attached as Exhibit B to this Agreement.
"Trading Day" shall mean a day on which the principal national
securities exchange or market on which any of the Voting Shares are listed or
admitted to trading is open for the transaction of business or, if none of the
Voting Shares is listed or admitted to trading on any national stock exchange, a
Business Day.
"Voting Shares" shall mean (i) the Common Shares 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 Common Shares
in respect of any merger or consolidation of the Company, any sale of all or
substantially all of the Company's assets or any liquidation, dissolution or
winding up of the Company. Whenever any provision of this Agreement requires
determination of whether a number of Voting Shares comprising a specified
percentage of such Voting Shares is, was or will be beneficially owned or has
been voted, tendered, acquired, sold or otherwise disposed of or a determination
of whether a Person has offered or proposed to acquire a number of Voting Shares
comprising such specified percentage, the number of Voting Shares comprising
such specified percentage of Voting Shares shall in every such case is deemed to
be the number of Voting Shares comprising the specified percentage of all the
Company's then outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any corporation or
other entity all the outstanding capital stock or other equity interests of
which having ordinary voting power in the election of directors or similar
officials (other than directors' qualifying shares or similar interests) are
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) From and after September
10, 1996 until the Distribution Date, (i) outstanding Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the and not by separate Right
Certificates, and (ii) the right to receive Right Certificates will be
transferable only in
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connection with the transfer of Common Shares of the Company. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, postage-prepaid mail, to each record holder of Common Shares of the
Company as of the Close of Business on the Distribution Date, at the address of
such holder shown on the stock transfer records of the Company, a Right
Certificate evidencing one Right for each Common Share so held. From and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On September 17, 1996, or as soon thereafter as practicable, the
Company will send a copy of a Summary of Rights, by first-class, postage-prepaid
mail, to each record holder of Common Shares of the Company as of the Close of
Business on September 10, 1996, at the address of such holder shown on the stock
transfer records of the Company. With respect to Common Shares outstanding on
September 10, 1996, the certificates evidencing such Common Shares shall,
together with copies of such Summary of Rights, thereafter also evidence the
outstanding Rights (as such Rights may be amended or supplemented) distributed
with respect thereto until the earlier of the Distribution Date or the date of
surrender thereof to the Company's transfer agent for registration of transfer
or exchange of Common Shares. Until the Distribution Date (or, if earlier, the
Redemption Date or Final Expiration Date), the surrender for registration of
transfer or exchange of any certificate for Common Shares outstanding as of the
Close of Business on September 10, 1996, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the surrender for registration
of transfer or exchange of the outstanding Rights associated with the Common
Shares represented thereby.
(c) The Company agrees that, at any time after September 10, 1996 and
prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of Common Shares at the same Purchase Price as the Rights then
outstanding.
(d) Certificates for Common Shares issued after September 10, 1996 but
prior to the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on September 10, 1996 or upon original issue or out of
treasury thereafter, 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
Baldwin Piano & Organ Company and The Provident Bank, dated as
of September 4, 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of
Baldwin Piano & Organ Company. Under certain circumstances, as
set
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forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by
this certificate. Baldwin Piano & Organ Company will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to or
acquired by any Acquiring Person or any Affiliate or Associate
thereof (each as defined in the Rights Agreement) shall, under
certain circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares after
September 10, 1996, but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The form of Right Certificates
(and the forms of election to purchase Common Shares (or other securities) and
of assignment to be printed on the reverse thereof) shall in form and substance
be substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, 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 as may be necessary to conform to usage. The Right
Certificates shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 23
hereof, the Right Certificates, whenever issued, shall be dated as of the date
of authentication thereof, but, regardless of any adjustments of the Purchase
Price or the number of Common Shares (or other securities) as to which a Right
is exercisable (whether pursuant to this Agreement or any future amendments or
supplements to this Agreement), or both, occurring after September 10, 1996 and
prior to the date of such authentication, such Right Certificates may, on their
face, without invalidating or otherwise affecting any such adjustment, expressly
entitle the holders thereof to purchase such number of Common Shares at the
Purchase Price per one Common Share as to which a Right would be exercisable if
the Distribution Date were September 10, 1996; no adjustment of the Purchase
Price or the number of Common Shares (or other securities) as to which a Right
is exercisable, or both, effected subsequent to the date of
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authentication of any Right Certificate shall be invalidated or otherwise
affected by the fact that such adjustment is not expressly reflected on the face
or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, at the Company's expense, by first-class, postage-prepaid mail to each
record holder of Common Shares of the Company as of the Close of Business on the
Distribution Date, temporary Right Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Right Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Right Certificates may determine, as evidenced by their
execution of such Right Certificates. If temporary Right Certificates are
issued, the Company will cause definitive Right Certificates to be prepared
without unreasonable delay. After the preparation of definitive Right
Certificates, the temporary Right Certificates shall be exchangeable for
definitive Right Certificates, upon surrender of the temporary Right
Certificates at the Corporate Trust Office of the Rights Agent, without charge
to the holder. Upon surrender for cancellation of any one or more temporary
Right Certificates, the Company shall execute and the Rights Agent shall
authenticate and deliver in exchange therefor one or more definitive Right
Certificates, evidencing a like number of Rights. Until so exchanged, the
temporary Right Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Right Certificates
may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature of an
authorized signatory, which need not be the same authorized signatory for all of
the
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Right Certificates, and such certificate upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has been
duly authenticated and delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder. Upon
surrender to the Rights Agent for registration of transfer of any Right
Certificate, the Company shall execute, and the Rights Agent shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Right Certificates evidencing a like number of Rights.
At the option of the holder, Right Certificates may bc exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing. No service charge
shall be made for any registration of transfer or exchange of Right
Certificates, but the Company may require payment by the holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer. The provisions of this Section
6 shall be subject to the provisions of Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates. If
any mutilated Right Certificate is surrendered to the Rights Agent, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, the Company shall execute and the Rights Agent shall
authenticate and deliver in exchange therefor a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
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If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights: Purchase Price: Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Corporate Trust Office, together with
payment of the Purchase Price for each one Common Share (or other securities) as
to which the Rights are exercised, at or prior to the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the time of redemption on the
Redemption Date, or (iii) the time at which such Rights are mandatorily redeemed
and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one Common Share pursuant to the
exercise of a Right shall initially be Sixty dollars ($60.00), shall be subject
to adjustment from time to time as provided in Sections 12 and 14 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashier's
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<PAGE> 14
check payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Common Shares (or other
securities) certificates for such number of Common Shares (or other securities)
as are to be purchased and registered in such name or names as may be designated
by the registered holder of such Right Certificate or, if appropriate, in the
name of a depositary agent or its nominee, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (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 15, (iii) promptly
after receipt of such certificates registered in such name or names as may be
designated by such holder, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 15 hereof.
Section 9. Cancellation of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer or exchange shall, if
surrendered to the Company or to any of its other agents, be delivered to the
Rights Agent for such purpose and for cancellation or, if surrendered to the
Rights Agent for such purpose, shall be cancelled by it. No Right Certificates
shall be authenticated in lieu of or in exchange for any Right Certificates
cancelled as provided in this Section 9 except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation, and the Rights Agent shall so cancel, any other Right
Certificate purchased or acquired by the Company. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
Section 10. Authorization of Shares. The Company shall not be required
to reserve and keep available out of its authorized and unissued Common Shares
or any Common Shares held in its treasury, the number of Common Shares that will
be sufficient to permit the exercise of outstanding Rights pursuant to the
adjustments set forth in Section 12(a)(ii) or Section 14 or otherwise until such
time as the Rights become exercisable.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Shares of the Company issued upon
exercise of Rights shall (subject to payment of the Purchase Price) be duly
authorized, validly issued, fully paid and nonassessable. 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 Common Shares of the
Company 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 in respect of the
issuance or delivery of certificates for Common Shares of the Company upon
exercise of Rights evidenced by Right Certificates in a name other than that of,
the registered holder of the Right Certificate
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<PAGE> 15
evidencing Rights surrendered for transfer or exercise or to issue or deliver
any certificates for Common Shares of the Company 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 thereof) or until
it has been established to the Company's satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate for
Common Shares of the Company is issued upon the exercise of, or upon mandatory
redemption and exchange of, Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares represented thereby on, and
such certificate shall be dated, (i) in the case of the exercise of Rights, 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, or (ii) in the case of the mandatory redemption and exchange of
Rights, the date of such mandatory redemption and exchange; provided, however,
that, if the date of such surrender and payment or mandatory redemption and
exchange is a date upon which the transfer books of the Company for its Common
Shares are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open. Prior to the
exercise of (or the mandatory redemption and exchange of) the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Common Shares of the Company for which the Rights shall be
exercisable, including without limitation the rights to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive my notice of any proceedings of the Company, except
as provided herein.
Section 12. Adjustment of Purchase Price. Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on the
Common Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares, (C) combine the outstanding Common Shares into a smaller number of
Common Shares or (D) issue any shares of its capital stock in a reclassification
of the Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 12(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 capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised thereafter
shall be entitled to receive, upon payment of the Purchase Price for the number
of Common Shares for which a Right was exercisable immediately Prior to such
date, the aggregate number and kind of shares of capital stock which, if such
Right had been duly exercised immediately prior to such date (at a time when the
Common Shares transfer books of the Company were open), such holder would have
acquired upon such exercise and been entitled to receive upon payment or
effectuation of such dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment
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<PAGE> 16
under both Section 12(a)(i) and Section 12(a)(ii), the adjustment provided for
in this Section 12(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors pursuant to Section 25
of this Agreement, if any Person shall become an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of
Common Shares for which a Right is then exercisable, in accordance with the
terms of this Agreement, such number of Common Shares of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of Common Shares for which a Right is then exercisable and dividing
that product by (y) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 12(d)) on the date such
Person became an Acquiring Person. If any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.
Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights that are or
were acquired or beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be null and void pursuant to the preceding sentence or to any
Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to any
Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate shall be cancelled.
(iii) In the event that there shall not be sufficient issued but not
outstanding, or authorized but unissued, Common Shares to permit the exercise or
exchange in full of all outstanding Rights in accordance with the foregoing
subparagraph (ii) or Section 25, the Company shall either (i) call a meeting of
shareholders seeking approval to cause sufficient additional shares to be
authorized and take all such additional action as is within its power to provide
for the authorization of such additional shares (provided that if such approval
is not obtained the Company will take the action specified in clause (ii) of
this sentence) or (ii) take such action as shall be necessary to ensure and
provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Shares Acquisition Date to which the Company is a
party, that each Right shall thereafter constitute the right to receive, in the
Company's discretion, either (x) in return for the Purchase Price, debt or
equity securities (including, in the Company's discretion, any available Common
Shares) or other assets (or a combination thereof) having a fair value equal to
twice the Purchase Price, or (y)
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<PAGE> 17
if the Company elects to exchange the Rights in accordance with Section 25, debt
or equity securities (including, in the Company's discretion, any available
Common Shares) or other assets (or a combination thereof) having a fair value
equal to the product of the then current per share market price of a Common
Share as of the Shares Acquisition Date (determined pursuant to Section 12(d))
multiplied by the number of Common Shares that the holder of the Rights would be
entitled to receive from the Company in mandatory redemption of, and in exchange
for, the outstanding Rights pursuant to Section 25, where in any case set forth
in (x) or (y) above the fair value of such debt or equity securities or other
assets shall be as determined in good faith by the Board of Directors, after
consultation with a nationally recognized investment banking firm.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Shares (or shares having the same rights privileges and
preferences as the Common Shares ("equivalent common shares")) or securities
convertible into or exchangeable for Common Shares or equivalent common shares
at a price per Common Share or equivalent common share (together with any,
additional consideration required upon conversion or exchange in the case of a
security convertible into or exchangeable for Common Shares or equivalent common
shares), less than the then current per share market price of the Common Shares
(determined pursuant to Section 12(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 Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares and/or equivalent common shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent common
shares to be offered for subscription or purchase (or into or for which the
convertible or exchangeable securities so to be offered are initially
convertible or exchangeable). In case all or part of such subscription or
purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent. Common Shares owned by or held for the account of the Company or any of
its Subsidiaries shall not be deemed outstanding for the purpose of any
computation described in this Section 12(b). The adjustment described in this
Section 12(b) shall be made successively whenever such a record date is fixed;
and, if none of such rights, options or warrants is 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) If the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Common Shares) or subscription rights or warrants (excluding those referred to
in Section 12(b)),
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<PAGE> 18
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 then current per share market
price of the Common Shares (determined pursuant to Section 12(d)) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one Common
Share and the denominator of which shall be such then current per share market
price of the Common Shares. Such adjustments shall be made successively whenever
such a record date is fixed; and, if such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "then current per
share market price" of the Common Shares on any date shall be deemed to be the
average of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the then current per share market price of the Common
Shares shall be appropriately adjusted to reflect the current market price per
Common Share equivalent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share, as the case may be, and references herein to the "number
of Common Shares" (or similar phrases) shall be construed to include fractions
of a Common Share. Notwithstanding the first sentence of this Section 12(e), any
adjustment required by this Section 12 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the thirtieth day preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Common Shares, thereafter 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 shares contained
in this Section 12, and the provisions of this Agreement, including without
limitation Sections 8, 10, 11 and 14, with respect to the Common Shares shall
apply on like terms to any such other shares.
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<PAGE> 19
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 12(i), upon each adjustment of the Purchase Price pursuant to Section
12(b) or 12(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price per one Common Share, that number of Common Shares obtained by
(i) multiplying (x) the number of whole Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each Right outstanding after such adjustment of the number of Rights
shall be exercisable for the number of Common Shares for which a Right was
exercisable immediately prior to such adjustment of the Purchase Price. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one 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, along with simultaneous written notice to the Rights Agent, of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. Until such record
date, however, any adjustment in the number of Common Shares for which a Right
shall be exercisable made as required by this Agreement shall remain in effect.
If Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 12(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 15 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
authenticated in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
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<PAGE> 20
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Common Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Shares or 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
securities upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 12 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Common Shares, issuance wholly
for cash of any of the Common Shares at less than the current market price,
issuance wholly for cash of Common shares or securities which by their terms are
convertible into or exchangeable for Common Shares, dividends on Common Shares
payable in Common Shares or issuance of rights, options or warrants referred to
in subsection (b) of this Section 12, hereafter effected by the Company to
holders of its Common Shares shall not be taxable to such shareholders.
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares of
the Company a copy of such certificate and (c) mail a brief summary thereof to
each holder of record of a Right Certificate in accordance with Section 28
hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. If, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with any such merger, all or part
of the Common Shares of the Company shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or a series of two or
more transactions, assets of the Company or its Subsidiaries which constitute
more than 50% of the assets or which produce more than 50% of the earning power
of the Company and is Subsidiaries (taken as a whole) to any Person or any
Affiliate or Associate of such Person other than the Company or one or more of
its Wholly-Owned Subsidiaries, then, and in each
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<PAGE> 21
such case, the Company agrees that, as a condition to engaging in any such
transaction, it will make or cause to be made proper provision so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement, such number of Common Shares of such other Person (including the
Company as successor thereto or as the surviving corporation) or, if such other
Person is a Subsidiary of another Person, of the Person or Persons (other than
individuals) which ultimately control such first-mentioned Person, as shall be
equal to the result obtained by (X) multiplying the then current Purchase Price
by the number of whole Common Shares for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
12(a)(ii)) and dividing that product by (Y) 50% of the then current per share
market price of the Common Shares of such other Person (determined pursuant to
Section 12(d)) on the date of consummation of such consolidation, merger, sale
or transfer; (ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company", as used herein, shall thereafter be deemed
to refer to such issuer; and (iv) such issuer shall take such steps (including
without limitation the reservation of a sufficient number of shares of its
Common Shares in accordance with Section 10) 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, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement or arrangements which, as a
result of the consummation of such transaction, would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent an agreement supplemental to this Agreement
complying with the provisions of this Section 14. The provisions of this Section
14 shall similarly apply to successive mergers or consolidations or sales or
other transfers. For the purposes of this Section 14, 50% of the assets of the
Company and its Subsidiaries shall be determined by reference to the book value
of such assets as set forth in the most recent consolidated balance sheet of the
Company and its Subsidiaries (which need not be audited) and 50% of the earning
power of the Company and its Subsidiaries shall be determined by reference to
the mathematical average of the operating income resulting from the operations
of the Company and its Subsidiaries for the two most recent full fiscal years as
set forth in the consolidated and consolidating financial statements of the
Company and its Subsidiaries for such years; provided, however, that if the
Company has, during such period, engaged in one or more transactions to which
purchase accounting is applicable, such determination shall be made by reference
to the pro forma operating income of the Company and its Subsidiaries giving
effect to such transactions as if they had occurred at the commencement of such
two-year period.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the
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Company shall, in lieu thereof, pay or cause to be paid to such Person an amount
in cash equal to the same fraction of the current market value of a whole Right.
For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute scrip or certificates which
evidence fractional Common Shares. If, on the Distribution Date or thereafter, a
Person would otherwise be entitled to receive a fractional Common Share, the
Company shall, in lieu thereof, pay to such Person at the time such Right is
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 15(b),
the current market value of a Common Share shall be the Closing Price of a
Common Share for the Trading Day immediately prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute scrip or certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and exchange, a
Person would otherwise be entitled to receive a fractional Common Share of the
Company upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any registered
holder of any Rights may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding, judicial or
otherwise, against the Company to enforce, or otherwise to act in respect of,
such holder's right to exercise such Rights in the manner provided in the Right
Certificate evidencing such Rights and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
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<PAGE> 23
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy or
constitute a waiver of any default hereunder or an acquiescence therein. Every
right and remedy given hereunder or by law to such holders may be exercised from
time to time, and as often as may be deemed expedient, by such holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares 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 Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer, along with such other and further documentation
as the Rights Agent may reasonably request;
(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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes, 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, that the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive
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<PAGE> 24
dividends or be deemed for any purpose the holder of Common Shares of the
Company or any other securities of the Company which may at any time be issuable
on the exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 26) or to receive dividends or subscription rights until the Right or
Rights evidenced by such Right Certificate shall have been exercised (or
mandatorily redeemed and exchanged) in accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent 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 expenses 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 performance
of its duties as set forth in this Agreement, including the costs and expenses
of defending against any claim of liability in the premises.
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 reliance upon
any Right Certificate or certificate for Common Shares of the Company or other
securities of the Company, Company Order, 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 executed by the proper person or persons and, where necessary,
verified or acknowledged, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
The provisions of this Section 19 shall survive the expiration of the
Rights and the termination of this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, 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 of its selection
(who may be legal counsel employed by 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.
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<PAGE> 25
(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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent, and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or any
other Person 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 authentication 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 have any responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or with respect to the validity or
execution of any Right Certificate (except its authentication 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 change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable; nor
shall the Rights Agent be responsible for the legality of the terms hereof in
its capacity as such agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties,
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<PAGE> 26
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 or for any delay
in acting while waiting for those instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss of the Company resulting from any such act, 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 to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the portion of the form of assignment or form of
election to purchase (as the case may be) certifying that the Rights are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
has not been completed or indicates that such Rights are beneficially owned by
such Person, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without the written consent of the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with the performance of its duties as set forth in this
Agreement if such acts or omissions are in reliance upon (i) the proper
execution of the certification concerning beneficial ownership appended to the
form of assignment
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<PAGE> 27
and the form of election to exercise attached to any Right Certificate unless
the Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership which would prohibit the exercise or transfer of the
Right Certificates.
Section 21. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate 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.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate 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 22. 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 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, 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 registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then the
Rights Agent or any registered holder of a Right Certificate (or, prior to the
Distribution Date, of Common Shares) may apply to any court of
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<PAGE> 28
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States, which is authorized under such laws to
exercise corporate trust 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 for the Common Shares of the
Company 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 22,
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 23. 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 Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of the
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to Section
25 herein, but shall not be redeemed in any other manner.
(b) The Board of Directors may, at its opinion, at any time prior to
the time any Person becomes an Acquiring Person redeem all but not less than all
the then outstanding Rights at a redemption price of one cent ($0.01) per Right
then outstanding, appropriately adjusted to reflect any adjustment in the number
of Rights outstanding pursuant to Section 12(i) herein (such redemption price
being hereinafter referred to as the "Redemption Price"). Any such redemption of
the Rights by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph (b)
of this Section 24 (or, alternatively, if the Board of Directors
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<PAGE> 29
qualified such action as to time, basis or conditions, then at such time, on
such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b)); thereafter, the only right of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after the adoption of any redemption resolution pursuant to
paragraph (b) of this Section 24, the Company shall give notice of such
redemption to the Rights Agent and 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 agents for the Common Shares. 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
shall state the method by which the payment of the Redemption Price will be
made.
(d) Neither the Company nor any of its Affiliates or Associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24 or in Section 25 herein, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
Section 25. Mandatory Redemption. (a) The Board of Directors may, at
its option, at any time after any Person becomes an Acquiring Person, issue
Common Shares of the Company in mandatory redemption or, and in exchange for,
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 12(a)(ii) hereof) at an exchange ratio of one Common Share for each two
Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 12(a)(ii) hereof. Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such redemption and exchange at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any such Subsidiary, or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
mandatory redemption and exchange of any Rights pursuant to subsection (a) of
this Section 25 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 such number of Common Shares as is
provided in paragraph (a) of this Section 25. The Company shall promptly give
public notice of any such redemption and exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such redemption and exchange. The Company promptly shall mail a notice of any
such redemption and exchange to the Rights Agent and to all 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
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<PAGE> 30
receives the notice. Each such notice of mandatory redemption and exchange shall
state the method by which the redemption and exchange of the Common Shares for
Rights will be effected and, in the event of any partial redemption and
exchange, the number of Rights which will be redeemed and exchanged. Any partial
redemption and exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions of
Section 12(a)(ii) hereof) held by each holder of Rights.
Section 26. Notice of Certain Events. If the Company shall, on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its common Shares, (b) to offer to the holders of its Common
Shares rights, options or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other
securities, rights, options or warrants, (c) to make any other distribution to
the holders of its Common Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
(e) to effect any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (determined as provided in
Section 14 herein) to, any other Person (other than the Company or a
Wholly-Owned Subsidiary or Wholly-owned Subsidiaries), (f) to effect the
liquidation, dissolution or winding up of the Company or (g) if the Rights have
theretofore become exercisable with respect to Common Shares pursuant to Section
12(a)(ii) herein, to declare or pay any dividend or other distribution on the
Common Shares payable in Common Shares or in stock of any other class of the
Company or any Subsidiary of the Company or to effect a subdivision or
combination of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 28 hereof, notice of such proposed action, which shall
specify the date of authorization by the Board of Directors of, and record date
for, such stock dividend or such distribution of rights or warrants or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, winding up, subdivision or combination is to take
place and the date of participation therein by the holders of the Common Shares
of the Company if any such date is to be fixed. Such notice shall be so given in
the case of any action covered by clause (a), (b), (c) or (g) above at least 20
days prior to the record date for determining holders of the Common Shares of
the Company, for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares of the
Company, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 28 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 12(a)(ii) hereof.
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Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Common Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Common Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Common Shares,
the Company agrees that it will, to the extent legally required, promptly
thereafter prepare and file, or cause to be prepared and filed, and will use its
best efforts to cause to be declared effective, a registration statement under
such Act registering the sale and delivery of such other securities and the
Company will, thereafter, uses its best efforts to maintain such registration
statement (or another) continuously in effect so long as any outstanding Rights
are exercisable with respect to such securities. The Company further agrees to
use its best efforts, from and after the Distribution Date, to qualify or
register for sale the Common Shares or other securities of the Company or one of
its Subsidiaries issuable upon exercise of the Rights under the securities or
"blue sky" laws (to the extent legally required thereunder) of all jurisdictions
in which registered holders of Right Certificates reside determined by reference
to the Rights Register.
Section 28. 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:
Baldwin Piano & Organ Company
422 Wards Corner Road
Cincinnati, OH 45140-8390
Attention: President
Any notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
The Provident Bank
One East Fourth Street
ML 654D
Cincinnati, OH 45202
Attention: Stock Transfer Department
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
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<PAGE> 32
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, to make any other provisions in
regard to matters or questions arising hereunder, or to add, delete, modify or
otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date and,
provided that at the time of such amendment or supplement the Distribution Date
has not occurred, the period during which the Rights may be redeemed; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, any such amendment or supplement shall not materially and adversely
affect the interests of the holders of Right Certificates. Without limiting the
foregoing, the Board of Directors may by resolution adopted at any time prior to
such time as any Person becomes an Acquiring Person amend this Agreement to
lower the threshold set forth in the definitions of Acquiring Person and
Distribution Date herein from 15% to a percentage not less than the greater of
(i) any percentage greater than the largest percentage of the outstanding Voting
Shares then known to the Company to be beneficially owned by any Person (other
than an Existing Person, the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any
trustee of or fiduciary with respect to any such plan when acting in such
capacity), and (ii) 10% if the Board of Directors shall determine that a Person
whose interests are adverse to the Company and its shareholders may seek to
acquire control of the Company.
Notwithstanding any other provision hereof, the Rights Agent's consent
must be obtained regarding any amendment or supplement pursuant to this Section
29 which alters the Rights Agent's rights or duties.
Section 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 31. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.
Section 32. Severability. If any term, provision, covenant 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.
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<PAGE> 33
Section 33. 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 34. Counterpart. 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 35. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
BALDWIN PIANO & ORGAN COMPANY
Attest:
/s/ C.R. Juengling
- ------------------------------ By: /s/ Karen L. Hendricks
-------------------------------
Its: Vice President Its: President
------------------------- -------------------------------
THE PROVIDENT BANK
Attest:
/s/ Jacqueline M. Dever
- ------------------------------ By: /s/ [UNREADABLE]
-------------------------------
Its: Vice President and
Trust Officer Its: Trust Officer
------------------------- ------------------------------
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<PAGE> 34
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 3, 2006 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. 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 ACQUIRING PERSONS
(AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
BALDWIN PIANO & ORGAN COMPANY
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 September 4, 1996 (the "Rights Agreement"), between
BALDWIN PIANO & ORGAN COMPANY, a Delaware corporation (the "Company"), and THE
PROVIDENT BANK (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 p.m., Eastern Standard Time, on September 3, 2006, at the
Corporate Trust Office of the Rights Agent (or at the office of its successor as
Rights Agent), one fully paid nonassessable share of Common Stock, $.01 par
value (the "Common Shares"), of the Company, at a purchase price of Sixty
dollars ($60.00) per Common Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of Common Shares which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of September 4, 1996, based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of Common
Shares which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon that happening
of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
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<PAGE> 35
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust 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
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged by the Company in whole or in part for
Common Shares.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
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 entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
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<PAGE> 36
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of
ATTEST: BALDWIN PIANO & ORGAN COMPANY
[SEAL]
______________________________ By: _______________________________
Secretary President
Authentication by:
The Provident Bank, Rights Agent
By:______________________________
Date of Authentication:______________
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<PAGE> 37
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO BALDWIN PIANO & ORGAN COMPANY:
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the Common Shares (or
other securities) issuable upon the exercise of such Rights and requests that
certificates for such Common Shares (or other securities) 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 as of ________________________________, __________________.
___________________________________
Signature
35
<PAGE> 38
[Form of Reverse Side of Right Certificate - continued]
Signature Guaranteed:
Signatures must have an acceptable guarantee.
________________________________________________________________________________
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________________
Signature
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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<PAGE> 39
EXHIBIT B
BALDWIN PIANO & ORGAN COMPANY
SHAREHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On September 3, 1996, the Board of Directors of Baldwin Piano & Organ
Company (the "Company"), authorized the issuance of one common share purchase
right (a "Right") with respect to each outstanding share of common stock, $.01
par value (the "Common Shares"), of the Company. The rights were issued on
September 10, 1996 to the holders of record of Common Shares on that date. Each
Right entitles the registered holder to purchase from the Company one Common
Share at a price of $60.00 per Common Share (the "Purchase-Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated September 4, 1996, between the Company
and the Provident Bank, as Rights Agent (the "Rights Agent").
Detachment of Rights: Exercise. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company, or (ii) 10 business days following the commencement
or announcement of an intention to commence a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on September 10, 1996, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after September 10, 1996, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of September 10, 1996, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the
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<PAGE> 40
close of business on the Distribution Date and such separate Right Certificates
alone will thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on September 3, 2006 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to acquire 15% or more of the Voting Shares,
each Right then outstanding (other than Rights beneficially owned by the
Acquiring Person which would become null and void) would become a right to buy
that number of Common Shares that at the time of such acquisition would have a
market value of two times the Purchase price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase 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 of two times the Purchase Price of the Right.
Registration and Listing of Common Shares. The offer and sale of the
Common Shares issuable upon exercise of the Rights will be registered with the
Securities and Exchange Commission but such registration will not be effective
until the Rights become exercisable. As described above, however, the Rights
will not be transferable separately from the Common Stock until the Distribution
Date.
Anti-dilution and Other Adjustments. The number of Common Shares or
other securities or property issuable upon exercise of the Rights, and the
Purchase Price payable, are subject to customary adjustments from time to time
to prevent dilution.
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
Exchange Option. At any time after the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 15% or more of
the outstanding Voting Shares and before the acquisition by a person or group of
50% or more of the Outstanding Voting Shares, a majority of the Continuing
Directors, as defined in the Rights Agreement, on the Board of Directors, may,
at their option, issue Common Shares in mandatory redemption of, or in exchange
for, all or part of the then Outstanding and exercisable Rights (other than
Rights owned by such Acquiring Person or group which would become null and void)
at an exchange ratio of one Common Share for each two Common Shares for which
each Right is then exercisable, subject to adjustment.
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<PAGE> 41
Redemption of Rights. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, a majority of the Continuing Directors,
as defined in the Rights Agreement, on the Board of Directors, may redeem all,
but not less than all, of the then outstanding Rights at a price of $0.01 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
No Rights as Shareholder. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by the
Board of Directors without the consent of the holders of the Rights, including
an amendment to extend the Final Expiration Date, and, provided a Distribution
Date has not occurred, to extend the period during which the Rights may be
redeemed, except that after the Distribution Date no such amendment may
materially and adversely affect the interests of the holders of the Rights.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
September 13, 1996. A copy of the Rights Agreement is available free of charge
from the Company.
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<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
BALDWIN PIANO & ORGAN ADOPTS SHAREHOLDER RIGHTS PLAN
LOVELAND, OHIO, SEPTEMBER 4, 1996 - Baldwin Piano & Organ Company
(NASDAQ:BPAO) announced today that its Board of Directors has adopted a
shareholder rights plan. The Board declared a dividend distribution of one
Common Share Purchase Right for each outstanding share of Baldwin's common
stock.
"This plan has been designed and put in place to enhance the Board's ability to
assure that all Baldwin shareholders are treated fairly in the event that the
company is faced with a coercive or unfair takeover attempt," stated Karen L.
Hendricks, President and Chief Executive Officer of Baldwin. "While we have
received no overtures, this plan is important to our shareholders because it
allows the Board time to evaluate any offer and to consider any and all
alternatives to such an offer. The plan does not stop the Board from considering
or accepting an offer if the Board believes such an action is in the best
interests of the company and its shareholders."
Baldwin's shareholder rights plan is similar to those in place at many public
companies today. Under the plan, shareholders of record on September 10, 1996,
will receive one right for each common share held on that date. This
distribution is not taxable to shareholders. The rights have a ten year life,
and may be exercised if a party acquires 15 percent or more of Baldwin's common
stock, or announces a tender offer to do so, without the consent of the Board of
Directors of Baldwin.
Baldwin Piano & Organ Company has manufactured and marketed keyboard musical
products for more than 130 years. The market leader of acoustic pianos in the
United States, Baldwin also manufactures electronic and electro-mechanical
components for Original Equipment Manufacturers.
###
CONTACT: Karen L. Hendricks (513) 576-4693
<PAGE> 1
EXHIBIT 99.2
September 10, 1996
To our Shareholders:
Your Board of Directors has adopted a shareholder rights plan and declared a
dividend distribution of one Common Share Purchase Right for each outstanding
share of Baldwin's common stock.
The plan enhances your Board's ability to assure that all Baldwin shareholders
are treated fairly in the event that the Baldwin Piano & Organ Company is faced
with a coercive or unfair takeover attempt. While Baldwin has received no
overtures, this plan is important because it allows your Board time to evaluate
an offer, and to consider any and all alternatives. The plan does not stop your
Board from considering or accepting an offer that is in the best interests of
your company and all shareholders.
You should be aware that Baldwin's shareholder rights plan is similar to those
in place at many public companies to protect the interests of shareholders.
Under the plan, shareholders of record on September 10, 1996, will receive one
right for each common share held on that date. This distribution is not taxable
to shareholders. The rights have a ten year life, and may be exercised if a
party acquires 15 percent or more of Baldwin's common stock, or announces a
tender offer to do so, without the consent of the Board of Directors of your
company. The rights will trade with the common shares. Other terms of the plan
are detailed in the Rights Agreement.
Baldwin Piano & Organ Company has manufactured and marketed keyboard musical
products for more than 130 years. By adopting this shareholder rights plan, your
Board of Directors has indicated our confidence in the future of Baldwin. We
wish to see that all of our loyal shareholders have the opportunity to
participate in that future.
On behalf of the Board of Directors,
Karen L. Hendricks
President and Chief Executive Officer
Attachment: Shareholder Rights Plan
