FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
IMO INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 21-0733751
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1009 Lenox Drive
Building Four West, P.O. Box 6550
Lawrenceville, New Jersey 08648-0550
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase New York Stock Exchange
Rights
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A.(c)(1), please check the following box. ____
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A.(c)(2),
please check the following box. ____
Securities to be registered pursuant to Section 12(g) of the Act:
None
Item 1. Description of Registrant's Securities to be Registered
On April 30, 1997, the Board of Directors of Imo Industries
Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Company Common Stock to
stockholders of record at the close of business on May 4, 1997.
Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a
"Unit") of Series B Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), at a purchase
price of $15 per Unit (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and the Rights Agent thereunder.
Initially,the Rights will be attached to all Common Stock and
no separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock 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, or obtained the
right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date")
or (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of
Common Stock. Until the Distribution Date, (i) the Rights will
be evidenced by the Common Stock certificates and will be
transferred with such Common Stock certificates, (ii) new
Common Stock certificates issued after May 4, 1997 will
contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on May 4, 2007, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, and except in certain circumstances described in the
Rights Agreement, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that, at any time following the Distribution
Date, (i) the Company is the surviving corporation in a merger
with an Acquiring Person and its Common Stock is not changed or
exchanged, or (ii) a Person becomes the beneficial owner of more
than 15% of the then outstanding shares of Common Stock other
than pursuant to an offer for all outstanding shares of Common
Stock that the independent directors determine to be fair to, and
otherwise in the best interests of, stockholders, each holder of
a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of
the foregoing, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of
either of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth
below.
For example, at an exercise price of $15 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $30 worth of Common Stock
(or other consideration, as noted above) for $15. Assuming that
the Common Stock had a per share value of $5 at such time, the
holder of each valid Right would be entitled to purchase six
shares of Common Stock for $15.
In the event that, any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation (other than a merger described in the second
preceding paragraph or a merger which follows an offer described
in the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights that previously have been voided
as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a
value equal to two times the exercise price of the Right. The
events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Units will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time until 10 days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, payable in cash or stock.
After the redemption period has expired, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of
Common Stock in a transaction or series of transactions not
involving the Company. Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights; provided,
however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
As of April 30, 1997, there were 17,126,609 shares of Common
Stock outstanding and 1,672,788 shares held in the treasury. As
of April 30, 1997, there were available or reserved the following
shares: 2,293,657 shares of Common Stock under the
Company's Equity Incentive Plan for Key Employees, 360,000 shares
under the Company's 1988 Equity Incentive Plan for Outside
Directors, 229,000 shares under the Company's 1995 Equity
Incentive Plan for Outside Directors, 200,000 shares for
Common Stock warrants and 1,758,973 under the Employees Stock
Savings Plan. Each outstanding share of Common Stock on May 4,
1997 will receive one Right. As long as the Rights are attached
to the Common Stock and in certain other circumstances specified
in the Rights Agreement, the Company will issue one Right for
each share of Common Stock issued.
The Rights have certain antitakeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on
a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination
approved by the Board of Directors of the Company since the Board
of Directors may, at its option, at any time prior to 10 days
following the Stock Acquisition Date redeem all but not less than
all of the then outstanding Rights. In this regard, it is noted
that the Company's Restated Certificate of Incorporation, as
amended, currently contains a supermajority/"fair" price
provision governing certain transactions with interested
stockholders.
Attached hereto as Exhibit 1 and incorporated herein by
reference is a form of the Rights Agreement, dated as of April
30, 1997, between the Rights Agent and the Company, specifying
the terms of the Rights, including the exhibits thereto, as
follows: Exhibit A -- Form of Certificate of Designation,
Preferences and Rights of Series B Junior Participating Preferred
Stock of Imo Industries Inc., as Exhibit B thereto, the Form of
Rights Certificate and as Exhibit C thereto, the Summary of
Rights to Purchase Preferred Stock. The foregoing description of
the Rights is qualified in its entirety by reference to the
Rights Agreement and the exhibits thereto.
Item 2. Exhibits
Exhibit No. Description
1 Rights Agreement, dated as of April 30, 1997 between
Imo Industries Inc. and First Chicago Trust Company
of New York, which includes, as Exhibit A thereto,
the Certificate of Designation, Preferences and
Rights of Series B Junior Participating Preferred
Stock of Imo Industries Inc., as Exhibit B thereto,
the Form of Rights Certificate and as Exhibit C
thereto, the Summary of Rights to Purchase Preferred
Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
IMO INDUSTRIES INC.
Dated: May 1, 1997 By: /s/ Thomas J. Bird, Esquire
Thomas J. Bird, Esquire
Executive Vice President,
General Counsel and
Secretary
IMO INDUSTRIES INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
____________________
RIGHTS AGREEMENT
Dated as of April 30, 1997
Table of Contents
Page
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issue of Rights Certificates
Section 4. Form of Rights Certificates
Section 5. Countersignature and Registration
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights
Section 8. Cancellation and Destruction of Rights
Certificates
Section 9. Reservation and Availability of Capital
Stock
Section 10. Preferred Stock Record Date
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action
Section 16. Agreement of Rights Holders
Section 17. Rights Certificate Holder Not Deemed a
Stockholder
Section 18. Concerning the Rights Agent
Section 19. Merger or Consolidation or Change of
Name of Rights Agent
Section 20. Duties of Rights Agent
Section 21. Change of Rights Agent
Section 22. Issuance of New Rights Certificates
Section 23. Redemption and Termination
Section 24. Notice of Certain Events
Section 25. Notices
Section 26. Supplements and Amendments
Section 27. Successors
Section 28. Determinations and Actions by the Board
of Directors, etc
Section 29. Benefits of this Agreement
Section 30. Severability
Section 31. Governing Law
Section 32. Counterparts
Section 33. Descriptive Headings
Exhibit A Certificate of Designation, Preferences and Rights
Exhibit B Form of Rights Certificate
Exhibit C Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 30, 1997 between Imo
Industries Inc., a Delaware corporation, (the "Company") and
First Chicago Trust Company of New York, a New York corporation,
(the "Rights Agent").
WITNESSETH
WHEREAS, on April 30, 1997 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of
common stock, par value $1.00 per share, of the Company (the
"Common Stock") outstanding at the close of business on May 4,
1997 (the "Record Date"), and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) for each share of Common
Stock of the Company issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and
the Distribution Date, each Right initially representing the
right to purchase one one-hundredth of a share of Series B Junior
Participating Preferred Stock of the Company having the rights,
powers and preferences set forth in the form of Certificate of
Designation, Preferences and Rights attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, and in effect on the date of this Agreement
(the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, or (B) securities upon exercise of Rights
at any time prior to the occurrence of a Triggering Event, or (C)
securities upon exercise of Rights from and after the occurrence
of a Triggering Event, which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from
a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or under
standing (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the
Company.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(e) "Close of business" on any given date shall mean
5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 p.m.,
New York City time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company
shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(h) "Preferred Stock" shall mean shares of Series B
Junior Participating Preferred Stock, par value $1.00 per share,
of the Company, and, to the extent that there are not a
sufficient number of shares of Series B Junior Participating
Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, par value $1.00 per
share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series B Junior
Participating Preferred Stock.
(i) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) (A), (B) or (C) hereof.
(j) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(k) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(l) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(m) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth
day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the tenth day following the Record
Date), or (ii) the close of business on the tenth business day
after the date that a tender or exchange offer 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 Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
attached to and, where applicable, evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for the Rights) and not
by separate certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date (as
such term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer
of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock that are issued after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set forth
in the Rights Agreement dated as of April 30,
1997, as it may be amended, between Imo Industries
Inc., a Delaware corporation, (the "Company") and
the Rights Agent (the "Rights Agent") under the
Rights Agreement (the "Rights Agreement"), the
terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal offices of the Company. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by sepa
rate certificates and will no longer be evidenced
by this certificate. The Company will mail or
cause to be mailed to the holder of this
certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge,
promptly after receipt of a written request
therefor. Under certain circumstances set forth
in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such
Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such
number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such
exercise price per one one-hundredth of a share, the "Purchase
Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of
the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned or initialed by the Rights Agent and shall not be
valid for any purpose unless so countersigned or initialed. In
case any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such officer of the Company
before countersignature or initialing by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned or initialed by the Rights
Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company;
and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close
of business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered
then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged
at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign or initial and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination
or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security reason
ably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto
and upon surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute and
deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature or initialing and delivery to the
registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total
number of one one-hundredths of a share (or other securities,
cash or other assets, as the case may be, as to which such
surrendered Rights are then exercisable, at or prior to the
earlier of (i) the close of business on May 4, 2007 (the "Final
Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $15, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one one-
hundredth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths
of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank
check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of a Rights Certificate upon the occurrence of any
purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered
for such exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any 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
Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at
the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and unissued shares held in its treasury), the number of shares
of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be suffi
cient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Securities Act of 1933
(the "Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities,
and (B) the date of the expiration of the Rights. The Company
will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of
time not to exceed 90 days after the date set forth in clause (i)
of the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company
shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as a
registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been
obtained or the exercise thereof shall not be permitted under
applicable law.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-
hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of
a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred
Stock or capital stock, as the case may be, which, if such Rights
had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open,
he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of
this Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger
or combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall, in one transaction or a
series of transactions, transfer any assets to the Company or to
any of its Subsidiaries in exchange (in whole or in part) for
shares of Common Stock, for shares of other equity securities of
the Company, or for securities exercisable for or convertible
into shares of equity securities of the Company (Common Stock or
otherwise) or otherwise obtain from the Company, with or without
consideration, any additional shares of such equity securities or
securities exercisable for or convertible into shares of such
equity securities (other than pursuant to a pro rata distribution
to all holders of Common Stock), or (3) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise acquire
or dispose of, in one transaction or a series of transactions,
to, from or with (as the case may be) the Company or any of its
Subsidiaries, assets on terms and conditions less favorable to
the Company than the Company would be able to obtain in arm's-
length negotiation with an unaffiliated third party, other than
pursuant to a transaction set forth in Section 13(a) hereof, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with
its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding,
unless the event causing the 15% threshold to be crossed is a
transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Common Stock pursuant to a tender offer
or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from
one or more investment banking firms, to be (a) at a price which
is fair to stockholders (taking into account all factors which
such members of the Board deem relevant including, without limita
tion, prices which could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize
maximum value) and (b) otherwise in the best interests of the
Company and its stockholders, or
(C) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation
of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or
any of its Subsidiaries, other than a transaction or transactions
to which the provisions of Section 13(a) apply (whether or not
with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly beneficially owned
by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person,
then promptly following five days after the date of the
occurrence of an event described in Section 11(a)(ii)(B) hereof
and promptly following the occurrence of any event described in
Section 11(a)(ii)(A) or (C) hereof, proper provision shall be
made so that each holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, in lieu of a
number of one one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first occur
rence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of
the current market price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Company's certificate
of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock, "common
stock equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the
Company based upon the advice or a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of
a Section 11(a) (ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the 30-day period
set forth above may be extended to the extent necessary, but not
more than 90 days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may
be extended, the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that
such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall
be the current market price (as determined pursuant to Section
11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within 45 calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred
Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock 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 immedi
ately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Preferred Stock and the denominator of which shall
be such current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock on
any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately
prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price"
per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the ten consecutive Trading Days immediately following
such date; provided, however that in the event that the current
market price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite 30 Trading
Day or ten Trading Day period, as set forth above, after the ex-
dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be
properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("Nasdaq")
or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock. If
neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one one-
hundredth of a share of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by
100.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share or one-millionth of a share of
Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a share of Preferred
Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-hundredths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest 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 of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned or initialed in the manner
provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificate theretofore and thereafter issued may continue
to express the Purchase Price per one one-hundredth of a share
which were expressed in the initial Rights Certificate issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of one one-hundredths of a share of
Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one one-
hundredths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-hundredths of
a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common
Stock) in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or in a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredth of a
share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such
one one-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12 month period registered
under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration
Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each
of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if
(i) such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a cash tender offer
for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii)(B) hereof (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per
share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to
such cash tender offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of
consideration paid pursuant to such cash tender offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights Certificates would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a
whole Right. For purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-
hundredth of a share of Preferred stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one one-
hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one share of
Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall
be entitled to specific performance of the obligations hereunder
and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only in the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-hundredths of a share
of Preferred Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
expenses and counsel fees and disbursements 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 suit, action, claim,
loss, liability, or expense, incurred without gross 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 or arising out of this Agreement, its acceptance and
administration, including the costs and expenses of defending
against any suit, action or claim of liability in connection with
or arising out of this Agreement, its acceptance and
administration.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned or
initialed but not delivered, any such successor Rights Agent may
adopt the countersignature or initials of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned or
initialed; and in case at that time any of the Rights
Certificates shall not have been countersigned or initialed, any
successor Rights Agent may countersign or initial such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned or initialed but not delivered, the
Rights Agent may adopt the countersignature or initials under its
prior name and deliver the Rights Certificates so countersigned
or initialed; and in case at that time any of the Rights
Certificates shall not have been countersigned or initialed, the
Rights Agent may countersign or initial such Rights Certificates
either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations imposed by this
Agreement upon the following terms and conditions (and no duties
or obligations shall be implied by or under this Agreement), by
all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by 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
certificates shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature or initials on
such Rights Certificates), but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
or initialing thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when
so issued, by validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments, agreements and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President,
any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys,
delegates, subcontractors, assigns, subagents or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys, delegates,
subcontractors, assigns, subagents, or agents or for any loss to
the Company or to the holders of the Rights resulting from any
such act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection 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.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties and obligations under this Agreement upon 30 days' notice
in writing mailed to the Company, and to each transfer agent of
the Common Stock and Preferred Stock, if any, by registered or
certified mail. Such resignation and discharge from all duties
under this Agreement shall be effective on the 30th day following
the mailing of the same, without further action on the part of
the Rights Agent and whether or not a successor shall theretofore
have been appointed. Thereafter, the Company shall give written
notice to the holders of the Rights Certificates (if the same
have been issued) by first class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights
agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first
class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of
New York (or of any other state of the United States as long as
such corporation is authorized to do business in the State of New
York), in good standing, which is authorized under such laws to
exercise stock transfer powers and is subject to supervision or
examination by federal or state authority and which has, together
with its parent company, at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000.
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that
(i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following
the Record Date), or (ii) the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"); provided however, that if, following the expiration of a
Stock Acquisition Date and following the expiration of the right
of redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, and (ii) there are no other
Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the
right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii)
Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the
"current market price", as defined in Section 11(d)(i) hereof, of
the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other
than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), 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 transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred Stock 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
shares of Preferred Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on 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:
Imo Industries Inc.
1009 Lenox Drive
Building Four West
P.O. Box 6550
Lawrenceville, New Jersey 08648-0550
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, NJ 07310
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) 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 registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock; provided, that if the effect
of such supplement or amendment would be to alter, amend or
enlarge the scope or extent of the Rights Agent's duties,
liabilities or obligations, such supplement or amendment shall
only become effective upon the written consent of the Rights
Agent. From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything contained in
this Agreement to the contrary, no supplement or amendment shall
be made which changes the Redemption Price, the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of
the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject
the Board to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be per
formed entirely within such State.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. 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 their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
Attest: IMO INDUSTRIES INC.
By:/s/ T.J. Bird By:/s/D.K. Farrar
Thomas J. Bird, Esquire Donald K. Farrar
Executive Vice President, Chairman, President
General Counsel and and Chief Executive Officer
Secretary
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/George Dalton By: /s/James Kuzmich
George Dalton James Kuzmich
Title: AVP Title:Assistant Vice President
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES B JUNIOR
PARTICIPATING PREFERRED STOCK
of
IMO INDUSTRIES INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Donald K. Farrar, Chairman of the Board, and Thomas J.
Bird, Secretary, of Imo Industries Inc. (the "Corporation), a
corporation organized and existing under the General Corporation
Law of the State of Delaware, in accordance with the provisions
of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Restated Certificate of
Incorporation, as amended, of the Corporation, on April 30, 1997,
the Board of Directors adopted the following resolution creating
a series of 250,000 shares of Preferred Stock designated as
"Series B Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority expressly granted
to and vested in the Board of Directors of the Corporation by the
provisions of its Restated Certificate of Incorporation, as
amended, the Board of Directors does hereby establish and
designate and provide for the issuance of a series of the
Preferred Stock of the Corporation designated as "Series B Junior
Participating Preferred Stock," which shall consist of 250,000
shares, and the Board of Directors does hereby fix the terms,
voting powers, preferences and relative rights, participating,
optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, to
be as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series B Junior Participating
Preferred Stock" and the number of shares constituting such
series shall be 250,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series B Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series
B Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, cash dividends in an
amount per share (rounded to the nearest cent) equal to 100 times
the aggregate per share amount of all cash dividends, and non-
cash dividends or distributions in an amount equal to 100 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock"), which dividends and
distributions shall be subject to the provisions for adjustment
hereinafter set forth. In the event the Corporation shall at any
time after April 30, 1997 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of
shares of Series B Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Junior Participating Preferred Stock
as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock), and such dividend or
distribution shall be paid or distributed to the holders of the
Series B Junior Participating Preferred Stock at or prior to the
time the related dividend or distribution is paid or distributed
to the holders of the Common Stock.
(C) The Board of Directors may fix a record date for the
determination of holders of shares of Series B Junior
Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for the
payment thereof. Dividends and distributions payable under
paragraph (A) above, if any, shall begin to accrue and be
cumulative on outstanding shares of Series B Junior Participating
Preferred Stock from the record date for the determination of
holders of shares of Series B Junior Participating Preferred
Stock entitled to receive such dividends or distributions, or if
no record date shall be fixed, from the date on which the related
dividend or distribution was declared by the Board of Directors
on the Common Stock. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior
Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of
Series B Junior Participating Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Junior Participating Preferred
Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of
Series B Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series B Junior Participating Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series B Junior
Participating Preferred Stock shall be in arrears for more than
270 consecutive weeks, the occurrence of such contingency shall
mark the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous periods on all shares of Series B
Junior Participating Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders
of the Series B Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six quarterly
dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two Directors of the Corporation.
(ii) During any default period, such voting right
of the holders of Series B Junior Participating Preferred Stock
may be exercised initially at a special meeting called pursuant
to subparagraph (iii) of this Section 3(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of 10% in number
of shares of the Series B Junior Participating Preferred Stock
outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of the Series B Junior Participating
Preferred Stock of such voting right. At any meeting at which
the holders of the Series B Junior Participating Preferred Stock
shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist, up to two Directors or, if such
right is exercised at an annual meeting, to elect two Directors.
If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Series B
Junior Participating Preferred Stock shall have the right to make
such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the
holders of the Series B Junior Participating Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by
vote of the holders of Series B Junior Participating Preferred
Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or ranking on a parity with the
Series B Junior Participating Preferred Stock.
(iii ) Unless the holders of the Series B Junior
Participating Preferred Stock shall, during an existing default
period, have previously exercised their right to elect Directors,
the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the
total number of shares of Series B Junior Participating Preferred
Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Series B Junior
Participating Preferred Stock, which meeting shall thereupon be
called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Series B Junior Participating Preferred Stock
are entitled to vote pursuant to this paragraph (C)(iii) shall be
given to each holder of record of Series B Junior Participating
Preferred Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or, in
default of the calling of such meeting within 60 days after such
order or request, such meeting may be called on similar notice by
any stockholder or stockholders owning in the aggregate not less
than 10% of the total number of shares of Series B Junior
Participating Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation, if
applicable, shall continue to be entitled to elect the whole
number of Directors of the Corporation until the holders of
Series B Junior Participating Preferred Stock voting as a class
shall have exercised their right to elect two Directors, after
the exercise of which right (x) the Directors so elected by the
holders of Series B Junior Participating Preferred Stock shall
continue in office until their successors shall have been elected
by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining Directors theretofore elected
by the holders of the class of stock that elected the Director
whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors
to fill vacancies as provided in clause (y) of the preceding
sentence.
(v) Immediately upon the termination of a default
period, (x) the right of the holders of Series B Junior
Participating Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of
Series B Junior Participating Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or
by-laws of the Corporation (as then in effect) irrespective of
any increase made pursuant to the provisions of paragraph (C)(ii)
of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, holders of Series B Junior
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or other distributions payable on
the Series B Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series B Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series B Junior Participating Preferred Stock, except
dividends paid ratably on the Series B Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii ) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series B Junior Participating Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series B Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series B Junior Participating Preferred Stock, or
any shares of stock, if any, ranking on a parity with the Series
B Junior Participating Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized
but unissued shares of Series B Junior Participating Preferred
Stock and may be reissued as part of a new series of Series B
Junior Participating Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series B Junior
Participating Preferred Stock shall have received $100 per share,
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series B Liquidation Preference"). Following
the payment of the full amount of the Series B Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series B Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series B Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in paragraph C below to reflect such events
as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the full amount
of the Series B Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series B Junior
Participating Preferred Stock and Common Stock, respectively,
holders of Series B Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Series B Junior Participating Preferred Stock and Common Stock,
on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B
Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a parity
with the Series B Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series B Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series B
Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series B Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series B Junior Participating
Preferred Stock shall rank on a parity with the Corporation's
Series A Junior Participating Preferred Stock. The Series B
Junior Participating Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate of
Incorporation, as amended, of the Corporation shall not be
further amended in any manner that would materially alter or
change the powers, preferences or special rights of the Series B
Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Junior
Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series B Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series B Junior Participating
Preferred Stock.
1IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury this 30th day of April, 1997.
Attest: IMO INDUSTRIES INC.
__________________________
By:
Thomas J. Bird, Secretary Donald K. Farrar
Chairman of the Board,
President and Chief Executive Officer
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- Rights
NOT EXERCISABLE AFTER 5 P.M. (NEW YORK CITY TIME) ON MAY 4, 2007
OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
Rights Certificate
IMO INDUSTRIES INC.
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 April 30, 1997 (the "Rights Agreement"),
between Imo Industries Inc., a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, a New
York corporation (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 p.m. (New York City time) on
May 4, 2007 at the office or offices of the Rights Agent
designated for such purpose, or its successor as Rights Agent,
one one-hundredth of a fully paid, non-assessable share of Series
B Junior Participating Preferred Stock (the "Preferred Stock") of
the Company, at a purchase price of $15 per one one-hundredth of
a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The Purchase Price shall
be paid, at the election of the holder, in cash or shares of
Common Stock of the Company having an equivalent value. The
number of Rights evidenced by this Rights Certificate (and the
number of shares that may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth above,
are the number and Purchase Price as of April 30, 1997 based on
the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certifi
cates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. After the expiration of the
redemption period, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving
the Company.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Rights or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stock
holders at any meeting thereof, or to give or withhold consent to
any corporate action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of __________, 1997
Attest: IMO INDUSTRIES INC.
_____________________________
By:
Secretary
Title:
Countersigned:
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By:
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
_________________________________________________________________
_ this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated:__________, 1997
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:__________, 1997
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: IMO INDUSTRIES INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of and delivered to:
Please 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 Rights Certificate, a new Rights Certificate
for the balance 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:__________, 1997
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [
] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated:__________, 1997
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On April 30, 1997, the Board of Directors of Imo Industries
Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Company Common Stock to
stockholders of record at the close of business on May 4, 1997.
Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a
"Unit") of Series B Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), at a purchase
price of $15 per Unit (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and the Rights Agent thereunder.
Initially, the Rights will be attached to the Common Stock,
and no separate Rights Certificates will be distributed. The
Rights will separate from the Common Stock 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, or
obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
such outstanding shares of Common Stock. Until the Distribution
Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates
issued after May 4, 1997 will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on May 4, 2007, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, and except in certain circumstances described in the
Rights Agreement, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that, at any time following the Distribution
Date, (i) the Company is the surviving corporation in a merger
with an Acquiring Person and its Common Stock is not changed or
exchanged, or (ii) a Person becomes the beneficial owner of more
than 15% of the then outstanding shares of Common Stock other
than pursuant to an offer for all outstanding shares of Common
Stock that the independent directors determine to be fair to, and
otherwise in the best interests of, stockholders, each holder of
a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of
the foregoing, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of
either of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth
below.
For example, at an exercise price of $15 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $30 worth of Common Stock
(or other consideration, as noted above) for $15. Assuming that
the Common Stock had a per share value of $5 at such time, the
holder of each valid Right would be entitled to purchase six
shares of Common Stock for $15.
In the event that, any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation (other than a merger described in the second
preceding paragraph or a merger which follows an offer described
in the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights that previously have been voided
as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a
value equal to two times the exercise price of the Right. The
events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Units will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time until 10 days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, payable in cash or stock.
After the redemption period has expired, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of
Common Stock in a transaction or series of transactions not
involving the Company. Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to stock
holders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights; provided,
however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
