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======================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AIRGAS, INC.
------------
(Exact name of registrant as specified in its charter)
Delaware 56-0732648
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(State of incorporation or organization) (IRS Employer Identification No.)
259 Radnor-Chester Road, Suite 100, Radnor, PA 19087
----------------------------------------------------
(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 Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
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Item 1. Description of Registrant's Securities to be Registered.
The Board of Directors of Airgas, Inc. (the "Company") has declared a
dividend distribution of one preferred stock purchase right (the "Rights") for
each outstanding share of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company to stockholders of record at the close of business on
April 29, 1997. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series B Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Stock") (or in certain
circumstances, cash, property, or other securities of the Company), at a
Purchase Price of $100.00, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement"), dated as of April 1, 1997, between the Company and The Bank
of New York, as Rights Agent (the "Rights Agent"). Capitalized terms used but
not otherwise defined herein will have meanings given such terms in the Rights
Agreement.
Initially, the Rights will be evidenced by the certificates
representing shares of Common Stock then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common Stock
and become exercisable upon the earlier of (i) ten calendar days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% (or 20% in the
case of Peter McCausland or certain of his affiliates) or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) ten
business days (or a later date as is determined by the Board of Directors, or if
there has been an Adverse Change of Control, by a majority of the Continuing
Directors (as such terms are herein defined)) after the commencement of, or
first public announcement of an intention to commence, a tender offer or
exchange offer that would result in a person or group beneficially owning 15%
(or 20%, as the case may be) or more of such outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date").
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 the Record
Date will contain in accordance with the Rights Agreement 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
certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on April 1, 2007, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right 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 Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of
a Right will
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thereafter have the right to receive, upon exercise, shares of Common Stock (or
in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), 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.
After the Stock Acquisition Date, in the event that (i) the Company
consolidates or merges with any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding shares of Common
Stock of the Company are exchanged for securities, cash or property of the other
person and the Company is the surviving corporation or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, proper provision will
be made so that each holder of a Right shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events set forth in this
paragraph and the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of shares of Common Stock or
other securities, cash or property issuable, upon exercise of the Rights are
subject to customary adjustments from time to time to prevent dilution in the
event of certain changes in the shares of the Company. With certain exceptions,
no adjustment in the Purchase Price will be required until cumulative
adjustments amount to an increase or decrease of at least 1% in the Purchase
Price.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Stock Acquisition
Date; provided, however, that if the authorization to redeem the Rights occurs
on or after the date of a change in a majority of the Board of Directors of the
Company as a result of a proxy or consent solicitation and a person who was a
participant in such solicitation has stated that such person (or any of its
Affiliates or Associates) has taken or intends to take or may consider taking
actions that would result in such person becoming an Acquiring Person or cause
the occurrence of a Triggering Event (the existence of these circumstances being
an "Adverse Change of Control"), then the redemption of the Rights will require
the approval of a majority of the Continuing Directors. 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 $.001 redemption price.
"Continuing Director" means (i) any member of the Board of Directors of
the Company who, while such person is a member of the Board, is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, and was a member
of the Board prior to the Record Date, or (ii) any Person who subsequently
becomes a member of the Board who, while such Person is a member of the Board,
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
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At any time after a person becomes an Acquiring Person (but before such
Acquiring Person owns 50% or more of the Company's outstanding Common Stock),
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than those owned by an Acquiring Person), for shares
of Common Stock, each Right being exchangeable for one share of Common Stock,
subject to adjustment.
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.
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 earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors (x) in any
manner that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person, or an Affiliate or Associate of
any such Acquiring Person), or (y) in order to cure any ambiguity or to correct
or supplement any provision contained herein which, in the good faith
determination of a majority of the Continuing Directors then in office, may be
defective or inconsistent with the other provisions contained herein, or (z) to
shorten or lengthen any time period hereunder; provided, however, that the
Rights Agreement cannot be supplemented or amended to lengthen (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 (other than an Acquiring Person, or any
Affiliate or Associate of an Acquiring Person).
The Rights have certain anti-takeover 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.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the Rights help ensure that the
Company's stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The execution of the Rights Agreement by the
Company is not in response to any specific takeover threat or proposal, but is a
precaution taken to protect the rights of the Company's stockholders.
A copy of the Rights Agreement, dated as of April 1, 1997, between
the Company and the Rights Agent, specifying the terms of the Rights (which
Rights Agreement includes as exhibits the form of Right Certificate and the
Summary of Rights to Purchase Preferred Stock) is attached hereto as an exhibit
and incorporated herein by reference. The foregoing description of the Rights is
qualified by reference to such exhibit.
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Item 2. Exhibits.
Exhibit Number Description of Exhibit Page Number
-------------- ---------------------- -----------
1.1 Rights Agreement, dated
as of April 1, 1997,
between Airgas, Inc. and
The Bank of New York,
as Rights Agent, which
includes as Exhibit
B thereto the Form of
Right Certificate.
1.2 First Amendment to the
Rights Agreement, dated
as of April 1, 1997,
between Airgas, Inc. and
The Bank of New York.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
AIRGAS, INC.
By /s/ Gordon L. Keen, Jr.
-----------------------
Name: Gordon L. Keen, Jr.
Title: Sr. Vice President - Law
and Corporate Development
Date: April 28, 1997
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EXHIBIT INDEX
Exhibit No.,
As provided
in Item 601 Sequential
Exhibit Number Description Page Number
- -------------- ----------- -----------
1.1 Rights Agreement, dated as of
April 1, 1997, between Airgas, Inc.
and The Bank of New York, as
Rights Agent, which includes as
Exhibit B thereto the Form of Right
Certificate.
1.2 First Amendment to the Rights
Agreement, dated as of April 1, 1997,
between Airgas, Inc. and The Bank of
New York.
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EXHIBIT 1.1
_______________________________________________________________________
AIRGAS, INC.
and
THE BANK OF NEW YORK
RIGHTS AGREEMENT
DATED AS OF APRIL 1, 1997
_______________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
SECTION 1. Certain Definitions.................................................... 1
SECTION 2. Appointment of Rights Agent............................................ 6
SECTION 3. Issue of Right Certificates............................................ 6
SECTION 4. Form of Right Certificates............................................. 9
SECTION 5. Countersignature and Registration...................................... 11
SECTION 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................ 11
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......... 12
SECTION 8. Cancellation and Destruction of Right Certificates..................... 15
SECTION 9. Reservation and Availability of shares of Capital Stock................ 15
SECTION 10. Preferred Stock Record Date............................................ 18
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of Rights..... 18
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares............. 29
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power... 30
SECTION 14. Fractional Rights and Fractional Shares................................ 33
SECTION 15. Rights of Action....................................................... 35
SECTION 16. Agreement of Right Holders............................................. 36
SECTION 17. Right Certificate Holder Not Deemed a Stockholder...................... 37
SECTION 18. Concerning the Rights Agent............................................ 37
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.............. 38
i
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 20. Duties of Rights Agent................................................. 39
SECTION 21. Change of Rights Agent................................................. 42
SECTION 22. Issuance of New Right Certificates..................................... 43
SECTION 23. Redemption and Termination............................................. 43
SECTION 24. Exchange............................................................... 45
SECTION 25. Notice of Certain Events............................................... 47
SECTION 26. Notices................................................................ 48
SECTION 27. Supplements and Amendments............................................. 49
SECTION 28. Successors............................................................. 50
SECTION 29. Determinations and Actions by the Board of Directors................... 50
SECTION 30. Benefits of this Agreement............................................. 51
SECTION 31. Severability........................................................... 51
SECTION 32. Governing Law.......................................................... 52
SECTION 33. Counterparts........................................................... 52
SECTION 34. Descriptive Headings................................................... 52
</TABLE>
Exhibit A Form of Certificate of Designation
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of Rights
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RIGHTS AGREEMENT
Rights Agreement, dated as of April 1, 1997, between Airgas, Inc., a
Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one Right for each share of Common Stock of the Company
outstanding as of the Close of Business (as such terms are hereinafter defined)
on April 29, 1997 (the "Record Date"), and has further authorized (i) the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the Distribution
Date (as such term is defined in Section 3), the Redemption Date and the Final
Expiration Date (as such terms are defined in Section 7) and (ii) in certain
circumstances provided in Section 22, the issuance of one Right with respect to
each share of Common Stock that shall become outstanding between the
Distribution Date and the earlier of the Redemption Date and the Final
Expiration Date, each Right initially representing the right to purchase one
one-thousandth 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 attached hereto as Exhibit A, upon the terms and
subject to the conditions herein set forth (the "Rights").
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, 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
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shares of Common Stock then outstanding, but shall not include (i) any Exempt
Person (as hereinafter defined) or (ii) any McCausland Group Member if and so
long as such McCausland Group Member, together with its Affiliates and
Associates and all other McCausland Group Members, is not the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of beneficial ownership of shares of Common Stock by the Company
that, by reducing the number of shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) outstanding,
increases the percentage of shares of Common Stock beneficially owned by such
Person (together with all Affiliates and Associates of such Person) to 15% or
more (or, in the case of a McCausland Group Member, 20% or more) of the shares
of Common Stock then outstanding; provided, however, that if any Person (other
than Exempt Persons) shall become the Beneficial Owner of 15% or more (or, in
the case of a McCausland Group Member, 20% or more) of the shares of Common
Stock then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company, then such Person shall be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person" as defined pursuant to the first sentence of this paragraph
(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not, solely as a result
of such inadvertent acquisition, be deemed to be an "Acquiring Person" for any
purpose of this Agreement. As used above, "McCausland Group Member" shall mean
(i) Peter McCausland, (ii) the spouse of Peter McCausland or any of his issue,
(iii) any guardian, representative, executor, estate, administrator or agent of
such persons, acting in their capacity as such, but only with respect to any
shares of Common Stock beneficially owned by such persons, (iv) any trust for
the benefit of Peter McCausland's spouse or issue or (v) any corporation,
partnership, limited liability company or other entity which Peter McCausland
controls either as general partner or owner of more than 50% of the issued and
outstanding voting securities, so
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long as, in any such case set forth in the foregoing clauses (iv) and (v), Peter
McCausland, as trustee or in some other capacity, retains sole voting power with
respect to any shares of Common Stock transferred to such trust, corporation,
limited liability company or other entity.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as such rule is in effect on the Record Date.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own," and shall be deemed to have "beneficial ownership"
of, any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly has
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own (1) securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event, if
such Rights were acquired by such Person or such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 or pursuant to Section 11(a)(i) in connection with an adjustment made with
respect to any of the Rights heretofore specified in this clause (3); or
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(B) the right to vote or otherwise has "beneficial
ownership" (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, pursuant to this subparagraph (B), any security as a result of any
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the provision in
subparagraph (i)(B) of this subsection (c)) or disposing of any
securities of the Company; provided, however, that nothing in this
subsection (c) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(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.
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(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia, Pennsylvania time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Philadelphia, Pennsylvania
time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
the shares of Common Stock, par value $0.01 per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
Person or, if such Person is a Subsidiary of another Person, the Person or
Persons that ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3.
(h) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company or (iv) any entity holding shares of Common Stock for or pursuant
to the terms of any such plan.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(j) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(k) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights, powers and preferences set forth in the form of Certificate of
Designation attached hereto as Exhibit A and, to the extent that there are not a
sufficient number of shares of such Series B Junior Participating Preferred
Stock authorized to permit the full exercise of the Rights, any other series of
Preferred Stock, par value $.01 per share, of the Company designated for such
purpose containing terms substantially similar to the terms of such Series B
Junior Participating Preferred Stock.
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(l) "Redemption Date" shall have the meaning set forth in Section 7.
(m) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii).
(n) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(o) "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.
(p) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(q) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent. In the event
the Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
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SECTION 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
calendar day after the Stock Acquisition Date or (ii) the Close of Business on
the tenth Business Day (or such later date as the Board of Directors shall
determine, provided that if such determination occurs on or after the date of an
Adverse Change in Control, then such date may be extended only if there are
Continuing Directors in office and such extension is authorized by a majority of
such Continuing Directors) after the date that a tender or exchange offer by any
Person (other than an Exempt Person) is first published or sent or given within
the meaning of Rule 14d-4(a) of the General Rules and Regulations under the
Exchange Act, the consummation of which would result in beneficial ownership by
a Person (other than an Exempt Person) of 15% or more (or, in the case of a
McCausland Group Member, 20% or more) of the outstanding shares of Common Stock
(including any such date that is after the date of this Agreement and prior to
the issuance of the Rights) (the earlier of (i) and (ii) being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Common Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of shares of Common Stock. The
Company shall give the Rights Agent written notice of the Distribution Date as
promptly as practicable thereafter. As soon as practicable after the
Distribution Date and receipt of written notice of the Distribution Date from
the Company, the Rights Agent will send, by first-class, insured, postage-
prepaid mail, to each record holder of shares of Common Stock as of the Close of
Business on the Distribution Date, or, with respect to shares of Common Stock so
issued on or after the Distribution Date (unless otherwise provided with respect
thereto as aforesaid), to the record holder of such shares of Common Stock on
the date of issuance, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B, evidencing
one Right for each share of Common Stock so held, subject to adjustments 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(i) hereof, at the
time of distribution of the Right Certificates, the Company may make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Right 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 Right
Certificates.
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<PAGE>
(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 shares of 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 shares of Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for shares of Common Stock registered in the
names of the holders thereof (together with a copy of the Summary of Rights).
Until the earlier of the Distribution Date or Final Expiration Date, the
surrender for transfer of any certificate for shares of Common Stock outstanding
on the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or Final Expiration Date, or in certain circumstances provided in Section
22, after the Distribution Date. Certificates for shares of Common Stock issued
after the Record Date but prior to the earlier of the Distribution Date or the
Final Expiration Date (including, without limitation, reacquired shares of
Common Stock referred to in the last sentence of this paragraph (c)) shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Airgas, Inc.
(the "Company") and The Bank of New York, as Rights Agent, dated
as of April 1, 1997 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company.
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Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly following
receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by Acquiring
Persons or Associates or Affiliates of Acquiring Persons (as such
terms are defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the shares of Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of shares
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 shares of Common Stock represented by such
certificates. In the event that the Company purchases or acquires any shares of
Common Stock after the Record Date but prior to the earlier of the Distribution
Date or the Final Expiration Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock
which are no longer outstanding.
SECTION 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially in the form of Exhibit B 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
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pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or any national securities
association on whose interdealer quotation system the Rights may from time to
time be authorized for quotation, or to conform to usage. The Right Certificates
shall be in a machine printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Section 22, the Right
Certificates that are issued in respect of shares of Common Stock that were
issued and outstanding as of the Record Date, shall be dated as of the Record
Date, and all Right Certificates that are issued in respect of other shares of
Common Stock shall be dated as of the respective dates of issuance of such
shares of Common Stock, and in either case on their faces shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(such purchase price per one one-thousandth of a share, the "Purchase Price"),
but the number and type of securities purchasable upon exercise of each Right
and the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section 22
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 any Associate or Affiliate of an Acquiring Person) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or any Associate or Affiliate of an Acquiring Person) 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 (or any Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring Person
(or of such Associate or Affiliate) or to any Person with whom the Acquiring
Person has any agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer that 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 Section 7(e) or Section 11 hereof,
and any Right Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
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The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
The absence of the foregoing legend on any Right Certificate shall in
no way affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended and shall
supply the Rights Agent with such legended Right Certificates.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the office of the Rights Agent designated for such
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purposes, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights as evidenced on the face
of each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and Section
14, at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities or other assets, as the case may be)
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged, with the
form of assignment and certificate appropriately executed, at the office 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 Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate 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), Section 11 and Section 14, countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment by the holder of a Right
Certificate 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
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
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a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a))
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price with
respect to the total number of one one-thousandths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on April 1, 2007 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $100.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 and shall be payable in lawful money of the United States of America, subject
to paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
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payment of the Purchase Price for the one one-thousandths of a share of
Preferred Stock (or other securities or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with Section 9(e) (as
determined by the Rights Agent), the Rights Agent shall, subject to Section
20(j), thereupon promptly (i) (A) requisition from any transfer agent for such
shares (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandths 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-
thousandths of a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional interests in shares in accordance with Section
14, (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 Right
Certificates registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii))
may be made in cash or by certified or bank check or money order payable to the
order of the Company. In the event the Company is obligated to issue other
securities (including shares of Common Stock) of the Company or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities or property are available
for distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
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evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14.
(e) Notwithstanding anything to the contrary in this Agreement, from
and after the first occurrence of any Triggering Event, any Rights beneficially
owned by (i) any Acquiring Person (or any Associate or Affiliate of an Acquiring
Person), (ii) a transferee of an Acquiring Person (or any Associate or Affiliate
of an Acquiring Person) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or any Associate or
Affiliate of an Acquiring Person) 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 (or any Associate or Affiliate of such Acquiring Person) to
holders of equity interests in such Acquiring Person (or of such Associate or
Affiliate) or to any Person with whom the Acquiring Person has any agreement,
arrangement or understanding regarding the transferred Rights, or (B) a transfer
that 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 be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or such Section 4(b)
with respect to any Acquiring Person or an Associate or Affiliate of an
Acquiring Person or their transferees.
(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 upon the occurrence of any purported
transfer or exercise unless such registered holder shall have (i) completed and
signed the certificate following the form of assignment or election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
assignment or exercise and (ii) provided such additional evidence of the
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identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company.
SECTION 9. Reservation and Availability of shares of Capital Stock.
(a) Subject to the Company's rights under Section 11(a)(iii) hereof to
otherwise fulfill its obligations hereunder, 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 or any shares of Preferred Stock held in its
treasury (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or other securities or out of its
authorized and issued shares of Common Stock or other securities held in its
treasury), the number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding Rights pursuant to the terms of
this Agreement; provided, however, that such action need not be taken with
respect to shares of Preferred Stock (or other securities) issuable upon
exercise of the Rights until after such time as the Rights become exercisable,
and with respect to shares of Common Stock (or other securities) issuable upon
occurrence of a Triggering Event until the occurrence of such event.
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(b) So long as the shares of Preferred Stock issuable upon the
exercise of Rights may be listed on any national securities exchange or
authorized for quotation on any interdealer quotation system of any national
securities association, 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 or quoted on such system upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as is
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections 11(a)(ii)
(or Section 11(a)(iii))and 13 hereof, or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Preferred Stock or other 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 Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities or (B)
the Final Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
paragraph, 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 each case
with simultaneous written notice to the Rights Agent. 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 or a registration statement shall not have been declared
effective. The Rights Agent may assume that any Right exercised is permitted to
be exercised under applicable law and shall have no liability for acting in
reliance upon such assumption.
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(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock or other
securities (including, following the occurrence of a Triggering Event, shares of
Common Stock) 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
shares.
(e) The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any one one-thousandths of a share
of Preferred Stock (or shares of Common Stock or other securities or property,
as the case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the one one-
thousandths of a share of Preferred Stock (or shares of Common Stock or other
securities or property, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depositary receipts for the
one one-thousandths of a share of Preferred Stock (or shares of Common Stock or
other securities or property, as the case may be) upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Stock Record Date. Each person in whose name
any certificate for a number of one one-thousandths of a share of Preferred
Stock (or shares of Common Stock 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
shares of Common Stock or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
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Preferred Stock (or Common Stock 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 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 Right Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to the
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 of Shares or Number
of Rights. The Purchase Price, the number and kind of securities 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 shares of Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred
Stock, (C) combine the outstanding shares of Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of its capital stock
in a reclassification of the shares of 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), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock that, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock (or other capital stock, as the case may be) transfer books of
the Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
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be paid upon the exercise of one Right be less than the aggregate par value of
the securities of the Company issuable upon the exercise thereof. If an event
occurs that would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), 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).
(ii) In the event any Person, at any time after the date of this
Agreement, is or becomes an Acquiring Person, then, promptly following the
occurrence of such Section 11(a)(ii) Event, proper provision shall be made so
that each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of the
number of one one-thousandths of a share of Preferred Stock for which a Right
was theretofore exercisable, such number of shares of Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of the Section
11(a)(ii) Event and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the current per share
market price of the shares of Common Stock (determined pursuant to Section
11(d)) on the date of the occurrence of the Section 11(a)(ii) Event (such number
of shares is herein called the "Adjustment Shares"); provided, however, that the
Purchase Price and number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any event occurring after the date of such
first occurrence.
(iii) In the event that, after the date of the occurrence of such a
Section 11(a)(ii) Event, the number of shares of Common Stock which is
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights, the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares in accordance
with Section 11(a)(ii) issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
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the Adjustment Shares upon exercise of the Rights, (1) cash, (2) a reduction in
the Purchase Price, (3) shares of Common Stock of the same or different class 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 substantially the same economic value as shares of
Common Stock (such shares or units of shares of preferred stock are referred to
herein as "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 of 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 thirty (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 thirty
(30) day period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, as the case
may be, 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 should 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 securities
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
exercisability of the Rights has been temporarily suspended, as well as a public
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announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the shares of Common Stock shall be the
current per share market price per share of Common Stock (as defined in Section
11(d)) 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 shares of Common Stock
on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock, or shares having the
same rights, privileges and preferences as Preferred Stock ("equivalent
preferred stock"), or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or 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 per share
market price of Preferred Stock (as determined pursuant to Section 11(d)) on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date plus the
number of 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 in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of 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
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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 the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash or assets (other than
a regular quarterly cash dividend out of the earnings or retained earnings of
the Company or a dividend payable in Preferred Stock but including a dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), 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 per share market price of the Preferred
Stock (as determined pursuant to Section 11(d)) 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 and shall be binding on the Rights Agent and the holders of the
Rights) 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 per share
market price of the Preferred Stock (as determined pursuant to Section 11(d)).
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price that would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the "current per share
market price" of the shares of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such shares of Common Stock
for the thirty (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 per share market price" of
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shares of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such shares of Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current per share market price of the shares of
Common Stock is determined during a period following the announcement by the
issuer of such shares of Common Stock of (1) a dividend or distribution on such
shares of Common Stock payable in such shares of Common Stock or securities
convertible into such shares of Common Stock (other than the Rights), or (2) any
subdivision, combination or reclassification of such shares of Common Stock, and
prior to the expiration of thirty (30) Trading Days, or ten (10) Trading Days,
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 per share market
price shall be appropriately 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 shares of 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 shares of
Common Stock, the fair value of the shares of Common Stock 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
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Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the shares of Common Stock are not publicly held or not so
listed or traded, "current per share market price" 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. The "current per share market
price" of the Preferred Stock shall be determined in the same manner as set
forth above for the Common Stock (other than the last sentence thereof). If the
current per share market price 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 above, the current per share market price of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (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 per share market price of
the Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, the current per share market price of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Right Agent and shall be conclusive for all purposes.
(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 that 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 one ten-thousandth 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
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
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Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Stock shall apply on like terms to any such other shares.
(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-thousandths 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-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-thousandths of a share of Preferred
Stock 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 substitution for any
adjustment in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths 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
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the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
thousandths of a share of Preferred Stock that were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Preferred Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Preferred Stock (or fractions thereof) at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of one one-thousandths 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-thousandths 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) 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 other securities that by their terms
are convertible into or exchangeable for shares of Preferred Stock, (iv)
dividends on shares of Preferred Stock payable in shares of Preferred Stock or
(v) issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its shares of Common
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 or engage in a share exchange with 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
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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, share exchange 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, share
exchange or sale, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it shall not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or 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 date of this Agreement
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.
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(q) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date consolidate with, or merge with or into, any
other Person for the primary purpose of a change of domicile of the Company,
and, in connection with such consolidation or merger, all of the outstanding
shares of Common Stock shall be changed into or exchanged for shares of Common
Stock of the surviving corporation of such consolidation or merger (the
"Surviving Corporation"), then proper provision shall be made so that Rights
shall be associated with each share of Common Stock of the Surviving
Corporation, except as provided in Section 7(e) hereof, such that the number of
Rights associated with each share of Common Stock of the Surviving Corporation
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 of 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 of the Surviving Corporation which the shares of Common Stock were changed
into or exchanged for pursuant to the consolidation or merger. Following such a
consolidation or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be references to the Surviving
Corporation.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the shares of Common
Stock and Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of record of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25. The Rights Agent shall be fully
protected in relying on such certificate and on any adjustment contained therein
and shall not be deemed to have knowledge of any adjustment unless and until it
shall have received such certificate.
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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 engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
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 a series of related transactions, assets or earning power
aggregating 50% or more 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 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 call, 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-thousandths of a share
of Preferred Stock for which a Right was 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 Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the number of one one-
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thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such first occurrence of a Section 11(a)(ii) Event)
and (2) dividing that product (such product 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 50% of the current per
share market price of the shares of Common Stock of such Principal Party
(determined pursuant to Section 11(d)) 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 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.
If, in the case of a transaction of the kind described in clause (z)
of the first sentence of this Section 13(a), the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals, then
the preceding sentences of this Section 13(a) shall be inapplicable, and the
Company shall require as a condition to such sale of transfer that such Person
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or Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights Agent and in exchange therefor (without requiring payment by such
holder), cash in the amount determined by multiplying the then current Purchase
Price by the number of shares of Common Stock for which a Right is then
exercisable.
(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 for or into which shares of Common Stock of the Company
are converted in such share exchange, 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 shares of Common Stock of
such Person are not at such time and have not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
shares of Common Stock of which are and have 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 shares of
Common Stock 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 shares of
Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of 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
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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 such Section 13 Event, the Principal Party
will
(i) prepare and file a registration statement under the
Securities 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 Securities Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdiction as may be necessary or appropriate; and
(iii) 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.
(d) In no event shall the Rights Agent have any liability hereunder
in respect of any such Principal Party transactions, including, without
limitation, the propriety thereof. The Rights Agent may rely and be fully
protected in relying upon a certificate of the Company stating that the
provisions of this Section 13 have been fulfilled.
The provisions of this Section 13 shall similarly apply to successive share
exchanges, mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the first 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).
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
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distribute Right Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price 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-
thousandths of a share of Preferred Stock) upon exercise of the Rights or to
issue certificates that evidence fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one one-thousandths of a share of
Preferred Stock). In lieu of fractional interests in shares of Preferred Stock
that are not integral multiples of one one-thousandths of a share of Preferred
Stock, the Company may pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Preferred Stock.
For purposes of this Section 14(b), the current market value of one one-
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thousandth of a share of Preferred Stock shall be one one-thousandth of the
closing price of a share of Common Stock (as determined pursuant to Section
11(d) 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 a share of Common Stock (as determined pursuant to Section
11(d) 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
(except as provided by this Section 14) upon exercise of a Right.
SECTION 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the shares of 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 Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
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remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right 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 Section 7(e), shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
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enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one one-
thousandths of a share of Preferred Stock or any other securities of the Company
that may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right 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 25), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to
pay to the Rights Agent such compensation as shall be agreed upon between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom. The provisions of this Section 18(a) shall
survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
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Certificate or certificate for shares of 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 by the proper Person or Persons and, where necessary, to be
verified or acknowledged.
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 all or
substantially all the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name, and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
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SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound, and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.
(a) The Rights Agent may consult with legal counsel of its selection
(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 or existence of any Acquiring
Person and the determination of "current per share 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 any one of the chairman of the board, the president,
any vice president, the secretary, an assistant secretary or the treasurer of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
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(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable, nor shall the Rights Agent
be responsible for the legality of the terms hereof in its capacity as an
administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the board, the president, any vice president, the
secretary or the 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 or for any delay in acting while waiting
for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
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under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents (other than employees), and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
(j) 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 or 2 thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent to
advance funds to third parties unless the Rights Agent shall have been
indemnified therefor to the reasonable satisfaction of the Rights Agent by the
Company or its designee.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment and the form
of election to purchase attached hereto unless the Rights Agent shall have
actual knowledge that, as executed, such certification is untrue, or (ii) the
non-execution (except by the persons referred to in Section 7(e)) of such
certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership known to the Company which would prohibit the exercise
or transfer of the Right Certificates.
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 60 days' notice in writing mailed to the Company and to each transfer agent
of the shares of Common Stock by registered or certified 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 shares of Common Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Rights Agent or the holder of record of any Right Certificate may
apply to any court of
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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
any state of the United States so long as such corporation is authorized to do
business as a banking institution, is in good standing, is authorized under such
laws to exercise corporate trust powers, and is subject to supervision or
examination by federal or state authority, and has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice with the predecessor
Rights Agent and each transfer agent of the shares of Common Stock, and mail a
notice thereof in writing to the holders of record of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by 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 Right 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 Right Certificates representing the
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appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
to the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments 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 calendar day
following the Stock Acquisition Date (or, if the Stock Acquisition Date occurred
prior to the Record Date, the Close of Business on the tenth calendar day
following such Record Date) or (ii) the Close of Business on the Final
Expiration Date, redeem all, but not less than all, of the then outstanding
Rights at a redemption price of $.001 per Right, 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 such authorization occurs on or
after the date of a change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such solicitation,
and any Person who is or was a participant in such solicitation has stated (or
if upon the commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such Person (or any
of its Affiliates or Associates) has taken or intends to take, or may consider
taking, any action that would result in such Person becoming an Acquiring Person
or that would cause the occurrence of a Triggering Event (the existence of the
circumstances described in this proviso being referred to herein as an "Adverse
Change of Control"), then the Rights may be so redeemed only if there are
Continuing Directors (as hereinafter defined) in office and such redemption is
authorized by a majority of such Continuing Directors. Notwithstanding the
foregoing, in the event payment of the Redemption Price to a holder of Rights
would result in the payment of an amount not equal to $.01 or an integral
multiple of $.01, the amount to be paid shall be rounded upward to the next
$.01. "Continuing Director" shall mean (i) any member of the Board of Directors
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of the Company who, while such person is a member of the Board, is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the Record Date, or (ii) any Person who
subsequently becomes a member of the Board who, while such Person is a member of
the Board, is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
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 set forth in the first
sentence of this Section 23(a) has expired. The Company, may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the current
market price per share 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, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the shares of Common Stock. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23 and Section 24 hereof and other than in connection with
the purchase of shares of Common Stock prior to the Distribution Date.
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SECTION 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock, each Right being exchangeable for one share of Common Stock,
appropriately adjusted to reflect any transaction specified in Section 11(p)
occurring after the date hereof (such number of shares of Common Stock issuable
in exchange for one Right being referred to herein as the "Exchange Shares").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than any Exempt
Person), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive the Exchange Shares. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
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(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding, or authorized but unissued, to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights or shall take
such other action specified in Section 11(a)(iii) hereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this subsection (d), the current
market value of a whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second and third sentences
of Section 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its shares of Preferred Stock or
to make any other distribution to the holders of its shares of Preferred Stock
(other than a regular quarterly cash dividend) or (ii) to offer to the holders
of its shares 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 shares of Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common 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 or more
transactions, of 50% or more 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
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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 Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action that shall specify the record date for
the purposes of such stock dividend, or distribution of rights or warrants, or
the date on which such reclassification, 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 twenty (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
twenty (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 a Triggering Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13 and (ii) all references
in the preceding paragraph to shares of Preferred Stock shall be deemed
thereafter to refer to shares of Common Stock and/or, if appropriate, other
securities.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote on any such action.
SECTION 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
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Airgas, Inc.
259 Radnor-Chester Road, Suite 100
Radnor, PA 19087
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Bank of New York
101 Barclay Street, Floor 12 West
New York, NY 10286
Attention: Richard T. Hanrahan
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right 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 27. Supplements and Amendments. Prior to the earliest of (i)
the Distribution Date, (ii) the occurrence of a Triggering Event or (iii) an
Adverse Change of Control, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including supplements or amendments that may be deemed to affect the interests
of the holders of Right Certificates adversely) without the approval of any
holders of certificates representing shares of Common Stock and associated
Rights. From and after the earliest of (i) the Distribution Date, (ii) the
occurrence of a Triggering Event or (iii) an Adverse Change of Control, the
Company may and the Rights Agent shall, if the Company so directs (upon approval
of a majority of the Continuing Directors then in office), supplement or amend
this Agreement without the approval of any holders of Right Certificates (x) in
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any manner that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person, or an Affiliate or Associate of
any such Acquiring Person), or (y) in order to cure any ambiguity or to correct
or supplement any provision contained herein which, in the good faith
determination of a majority of the Continuing Directors then in office, may be
defective or inconsistent with the other provisions contained herein, or (z) to
shorten or lengthen any time period hereunder; provided, however, that from and
after the earliest of (i) the Distribution Date, (ii) the occurrence of a
Triggering Event or (iii) an Adverse Change in Control, this Agreement shall not
be supplemented or amended to lengthen (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 (other than an Acquiring Person, or any Affiliate or Associate
of an Acquiring Person). Upon the delivery of a certificate from an officer of
the Company or, so long as any Person is an Acquiring Person hereunder, the
Continuing Directors that states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made that changes
the Redemption Price, accelerates the Final Expiration Date, changes the
Purchase Price, or changes the number of one one-thousandths 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 shares of Common Stock.
SECTION 28. 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 29. Determinations and Actions by the Board of Directors.
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
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under the Exchange Act. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the Continuing Directors) 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 of Directors of the Company (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 or the Continuing Directors to any liability to the holders of
the Rights.
SECTION 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the shares of 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 Right Certificates (and, prior to the Distribution
Date, the registered holders of the shares of Common Stock).
SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
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<PAGE>
Directors of the Company determines in its good faith judgment that severing the
invalid language of 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 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, provided, however, that the
rights and obligations of the Rights Agent shall be governed by and contrued in
accordance with the laws of the State of New York.
SECTION 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
AIRGAS, INC.
By: /s/ Gordon L. Keen, Jr.
------------------------------------
Name: Gordon L. Keen, Jr.
Title: Sr. Vice President - Law
and Corporate Development
THE BANK OF NEW YORK, as Rights Agent
By: /s/ Richard T. Hanrahan
-----------------------------------
Name: Richard T. Hanrahan
Title: Assistant Vice President
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<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
The undersigned officers of Airgas, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Amended and Restated Certificate of Incorporation (the
"Certificate"), said Board of Directors, at a duly called meeting held on April
16, 1997, at which a quorum was present and acted throughout, adopted the
following resolutions, which resolutions remain in full force and effect on the
date hereof, creating a series of 200,000 shares of Preferred Stock having a par
value of $0.01 per share, designated as Series B Junior Participating Preferred
Stock, out of the class of 20,000,000 shares of preferred stock of the
Corporation, par value of $0.01 per share (the "Preferred Stock").
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Article 4 of the Certificate, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series B Junior Participating Preferred Stock having the voting rights,
designations, preferences, qualifications, privileges, limitations,
restrictions, conversion rights and other special or relative rights that are
set forth below:
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 two hundred thousand (200,000).
<PAGE>
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 of the Corporation ranking prior and superior to the shares of Series B
Junior Participating Preferred Stock, 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, quarterly dividends payable in cash on the first day of January, April,
July and October in each year or such other quarterly payment date as shall be
specified by the Board of Directors (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of the
Series B Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (i) $0.01 or (ii) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 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, $.01 par value (the "Common Stock"), of the Corporation
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of the Series B Junior Participating
Preferred Stock. In the event the Corporation shall at any time after April 29,
1997 (the "Rights Declaration Date") (i) declare any dividend on 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, 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 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); provided, however,
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per
share on the Series B Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
B Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record
A - 2
<PAGE>
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series B Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such quarterly Dividend
Payment Date. Accrued but unpaid dividends shall 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. 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.
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 1,000 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 in an amount equal to six (6) quarterly
dividends thereon, 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 quarterly dividend
periods and for the current quarterly dividend period 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
A - 3
<PAGE>
default period, all holders of shares of Series B Junior Participating Preferred
Stock with dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class together with holders of any other shares
of preferred stock of the Corporation upon which like voting rights have been
conferred and are then exercisable, irrespective of series, shall have the right
to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
shares 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 such voting right shall not be exercised
unless the holders of ten percent (10%) in number of shares of preferred stock
having the voting rights set forth above that are 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 such preferred stock of such
voting right. At any meeting at which the holders of such 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 (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of such 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 such 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 such preferred stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the Series B Junior
Participating Preferred Stock.
(iii) Unless the holders of such 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 ten percent (10%) of the total number of
shares of such preferred stock outstanding, irrespective of series, may request,
the calling of special meeting of the holders of such 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 Preferred Stock are entitled to vote pursuant to this
Paragraph (c)(iii) shall be given to each holder of record of such 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 ten percent
(10%) of the total number of shares of such preferred stock outstanding.
Notwithstanding the provisions of this
A - 4
<PAGE>
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 until the holders of such preferred stock
shall have exercised their right to elect two (2) Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
such 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 which 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 foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of such preferred stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of such 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 or by-laws 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 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 shares 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 quarterly dividends
--------------------
or other dividends or distributions payable on the Series B Junior Participating
Preferred Stock as provided in Section 2 herein 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;
A - 5
<PAGE>
(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 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 Section 4(a) herein, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any 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 preferred stock of the Corporation and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
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 an amount equal to $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such
A - 6
<PAGE>
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)
1,000 (as appropriately adjusted as set forth in subparagraph (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 shares 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 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 shares 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 1,000 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
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<PAGE>
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 shares of Common Stock, or (iii) combine the
outstanding shares of 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 junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, except that the
Series B Junior Participating Preferred Stock shall rank on a parity with the
Series A Junior Participating Preferred Stock of the Corporation as to dividends
and the distribution of assets.
Section 10. Amendment. The Certificate, including, without
---------
limitation, this resolution, shall not hereafter be amended, either directly or
indirectly, or through merger or consolidation with another corporation, 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 shares of Series B Junior Participating
Preferred Stock.
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<PAGE>
IN WITNESS WHEREOF, Airgas, Inc. has caused this Certificate to be
signed by its Senior Vice President this 22nd day of April, 1997.
AIRGAS, INC.
By /s/ Gordon L. Keen, Jr.
--------------------------------------
Name: Gordon L. Keen, Jr.
Title: Sr. Vice President-Law &
Corporate Development
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<PAGE>
Exhibit B
[Form of Right Certificate]
Certificate No. R- ____________Rights
NOT EXERCISABLE AFTER APRIL 1, 2007 OR EARLIER IF NOTICE OF REDEMPTION
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 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 RIGHT CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
Airgas, 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 1, 1997 (the "Rights Agreement"), between Airgas,
Inc., a Delaware corporation (the "Company"), and The Bank of New York (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Radnor, Pennsylvania time) on April 1, 2007 at the office of the Rights Agent
designated for such purpose, or at the office of its successors as Rights Agent,
one one-thousandth of a share of Series B Junior
______________________
* The portion of the legend shall be modified to apply to an Acquiring
Person as applicable, and shall replace the preceding sentence.
<PAGE>
Participating Preferred Stock, par value $.01 per share (the "Preferred Stock"),
of the Company, fully paid and nonassessable (or in certain circumstances, cash,
property or other securities of the Company), at a purchase price of $100,
subject to adjustment (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the amount
of Preferred Stock which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of April 1, 1997 based on the shares of Common Stock, par value $.01
per share, of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the amount of
Preferred Stock or other securities that may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events
(as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate amount
of Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.001 per Right (subject to adjustment).
B - 2
<PAGE>
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or of any other securities of the Company that may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of
AIRGAS, INC.
By:_____________________________
Attest:
By:___________________________________
Countersigned:
THE BANK OF NEW YORK
By:___________________________________
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<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates)
FOR VALUE RECEIVED______________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:_________________, __
_________________________________
Signature
Signature Guaranteed:____________________________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
B - 4
<PAGE>
________________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right 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
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated:_______________________, __
_________________________________
Signature
Signature Guaranteed:_____________________________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
________________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B - 5
<PAGE>
________________________________________________________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: Airgas, Inc.
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the number of shares of
Preferred Stock (or fractions thereof) issuable upon the exercise of such
Rights (or such other securities of the Company or of any other person which
may be issuable upon exercise of the Rights) and requests that certificates for
such securities be issued in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated:_________________, __
____________________________________
Signature
Signature Guaranteed:______________________________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
B - 6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) 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
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated:_________________, __
__________________________________
Signature
Signature Guaranteed:______________________________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
________________________________________________________________________________
NOTICE
The signatures in the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
________________________________________________________________________________
________________________________________________________________________________
WARNING
In the event the Certificate set forth above in the Assignment and
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of such Acquiring Person (as defined in the
Rights Agreement), and such Assignment or Election to Purchase will not be
honored.
B - 7
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of Airgas, Inc. (the "Company") has declared a
dividend distribution of one preferred stock purchase right (the "Rights") for
each outstanding share of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company to stockholders of record at the close of business on
April 29, 1997. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series B Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Stock") (or in
certain circumstances, cash, property, or other securities of the Company), at
a Purchase Price of $100.00, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement"), dated as of April 1, 1997, between the Company and The
Bank of New York, as Rights Agent (the "Rights Agent"). Capitalized
terms used but not otherwise defined herein will have meanings given such terms
in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates representing
shares of Common Stock then outstanding, and no separate Right Certificates
will be distributed. The Rights will separate from the Common Stock and become
exercisable upon the earlier of (i) ten calendar days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% (or 20% in the
case of Peter McCausland or certain of his affiliates) or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) ten
business days (or a later date as is determined by the Board of Directors, or
if there has been an Adverse Change of Control, by a majority of the Continuing
Directors (as such terms are herein defined)) after the commencement of, or
first public announcement of an intention to commence, a tender offer or
exchange offer that would result in a person or group beneficially owning 15%
(or 20%, as the case may be) or more of such outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date").
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 the Record
Date will contain in accordance with the Rights Agreement 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
certificates.
<PAGE>
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on April 1, 2007, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right 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 Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, shares of
Common Stock (or in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the Purchase Price of the
Right. Notwithstanding the foregoing, following the occurrence of such an
event or any other Triggering Event (as defined below), 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.
After the Stock Acquisition Date, in the event that (i) the Company
consolidates or merges with any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding shares of Common
Stock of the Company are exchanged for securities, cash or property of the
other person and the Company is the surviving corporation or (iii) 50% or more
of the Company's assets or earning power is sold or transferred, proper
provision will be made so that each holder of a Right shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
value equal to two times the Purchase Price of the Right. The events set forth
in this paragraph and the preceding paragraph are referred to as the
"Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock or
other securities, cash or property issuable, upon exercise of the Rights are
subject to customary adjustments from time to time to prevent dilution in the
event of certain changes in the shares of the Company. With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to an increase or decrease of at least 1% in the
Purchase Price.
In general, the Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right (subject to adjustment), at any time before the
C - 2
<PAGE>
close of business on the tenth calendar day following the Stock Acquisition
Date; provided, however, that if the authorization to redeem the Rights occurs
on or after the date of a change in a majority of the Board of Directors of the
Company as a result of a proxy or consent solicitation and a person who was a
participant in such solicitation has stated that such person (or any of its
Affiliates or Associates) has taken or intends to take or may consider taking
actions that would result in such person becoming an Acquiring Person or cause
the occurrence of a Triggering Event (the existence of these circumstances being
an "Adverse Change of Control"), then the redemption of the Rights will require
the approval of a majority of the Continuing Directors. 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 $.001 redemption price.
"Continuing Director" means (i) any member of the Board of Directors of
the Company who, while such person is a member of the Board, is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, and was a member
of the Board prior to the Record Date, or (ii) any Person who subsequently
becomes a member of the Board who, while such Person is a member of the Board,
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
At any time after a person becomes an Acquiring Person (but before such
Acquiring Person owns 50% or more of the Company's outstanding Common Stock),
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than those owned by an Acquiring Person), for shares
of Common Stock, each Right being exchangeable for one share of Common Stock,
subject to adjustment.
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.
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 earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors (x) in any
C - 3
<PAGE>
manner that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person, or an Affiliate or Associate of
any such Acquiring Person), or (y) in order to cure any ambiguity or to correct
or supplement any provision contained herein which, in the good faith
determination of a majority of the Continuing Directors then in office, may be
defective or inconsistent with the other provisions contained herein, or (z) to
shorten or lengthen any time period hereunder; provided, however, that the
Rights Agreement cannot be supplemented or amended to lengthen (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 (other than an Acquiring Person, or any
Affiliate or Associate of an Acquiring Person).
The Rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to aquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the Rights help ensure that the
Company's stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The execution of the Rights Agreement by the
Company is not in response to any specific takeover threat or proposal, but is a
precaution taken to protect the rights of the Company's stockholders.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
Once the Rights are issued, a copy of the Rights Agreement will be available to
registered holders of the Rights upon written request free of charge from the
Rights Agent. 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.
C - 4
<PAGE>
Exhibit 1.2
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS IS A FIRST AMENDMENT TO RIGHTS AGREEMENT, dated as of April 1,
1997 (the "Amendment"), between Airgas, Inc., a Delaware corporation (the
"Company"), and The Bank of New York, a New York banking corporation (together
with The Philadelphia National Bank, its predecessor in such capacity, the
"Rights Agent").
Background
----------
A. The Company and the Rights Agent have entered into a Rights
Agreement, dated as of August 1, 1988 (the "1988 Rights Agreement"). Pursuant to
the Rights Agreement, the Company declared a distribution of one right (a "1988
Right") initially representing the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share, of the Company for each share of Common Stock, par value $0.01 per share
("Common Stock"), of the Company outstanding at the close of business on August
12, 1988 (the "1988 Record Date"), and, subject to the terms of the 1988 Rights
Agreement, for each share of Common Stock issued between the 1988 Record Date
and the Distribution Date. Unless expressly provided otherwise herein,
capitalized terms have the meanings set forth in the 1988 Rights Agreement.
B. The Company has appointed the Bank of New York as the successor
Rights Agent under the 1988 Rights Agreement.
C. In view of, among other things, the expiration of the 1988 Rights
Agreement on August 1, 1998, the Company and the Rights Agent desire to enter
into a new Rights Agreement, dated as of the date hereof (the "1997 Rights
Agreement"), whereby the Company will declare a dividend of one right (a "1997
Right") initially representing the right to purchase one one-thousandth of a
share of Series B Junior Participating Preferred Stock, par value $0.01 per
share, of the Company for each share of Common Stock outstanding at the close of
business on April 29, 1997 (the "1997 Record Date"), and, subject to the terms
of the 1997 Rights Agreement, for each share of Common Stock that becomes
outstanding between the 1997 Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
defined in the 1997 Rights Agreement) and, in certain circumstances set forth in
the 1997 Rights Agreement, for each share of Common Stock that becomes
outstanding thereafter.
D. Accordingly, the Company and the Rights Agent desire to amend the
1988 Rights Agreement as hereinafter set forth to reflect the execution and
delivery of the 1997 Rights Agreement where provisions of the 1988 Rights
Agreement conflict with provisions of the 1997 Rights Agreement, the provisions
of the 1997 Rights Agreement control.
Terms
-----
Accordingly, in consideration of the premises and mutual agreements
herein set forth, and intending to be legally bound hereby, the parties hereby
agree as follows:
SECTION 1. Amendments to 1988 Rights Agreement. The 1988 Rights
Agreement shall be amended as follows:
<PAGE>
(a) Section 1 of the 1988 Rights Agreement shall be amended by
deleting paragraph (a) in its entirety and substituting the following:
(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 20% or more of the Common Shares then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company for or pursuant to the terms
of any such plan; provided, however, that in no event will any Person
be an Acquiring Person under this Agreement if such Person is an
"Acquiring Person" as such term is defined in the Rights Agreement,
dated as of April 1, 1997 (the "1997 Rights Agreement"), between the
Company and The Bank of New York.
(b) Section 1 of the 1988 Rights Agreement shall be further
amended by deleting paragraph (m) in its entirety and substituting the
following:
(m) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii) hereof.
(c) Section 1 of the 1988 Rights Agreement shall be further
amended by deleting paragraph (o) in its entirety and substituting the
following:
(o) "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 any Acquiring Person that an Acquiring
Person has become an Acquiring Person under this Agreement; provided,
however, that in the event (i) such Person is an "Acquiring Person"
(as such term is defined in the 1997 Rights Agreement) under the 1997
Rights Agreement or (ii) there has occurred, or there occurs, in
connection with such announcement, a "Stock Acquisition Date" (as such
term is defined in the 1997 Rights Agreement) under the 1997 Rights
Agreement has occurred, then in either of such cases no Stock
Acquisition Date will be deemed to have occurred under this Agreement.
(d) Section 3 of the 1988 Rights Agreement shall be amended by
adding the following sentence at the end of paragraph (a):
Notwithstanding the foregoing and anything to the contrary herein, in
the event any "Distribution Date" (as such term is defined in the 1997
Rights Agreement) has occurred under the 1997 Rights Agreement, then
in no event shall any Distribution Date be deemed to have occurred
under this Agreement (and the Board of Directors
-2-
<PAGE>
will not be subject to any of the obligations set forth in clause (ii)
of the first sentence of this paragraph (a)).
(e) Section 3 of the 1988 Rights Agreement shall be further
amended by deleting paragraph (d) in its entirety.
(f) Paragraph (b) of Section 11 of the 1988 Rights Agreement
shall be amended by deleting subparagraphs (A), (B) and (C) of subparagraph (ii)
thereof and substituting the following:
any Person, at any time after the date of this Agreement, is or
becomes an Acquiring Person,
(g) Section 8 of the 1988 Rights Agreement shall be amended by
deleting the last sentence and inserting the following:
The Rights Agent shall deliver all cancelled Right Certificates to
the Company.
(h) Section 13 of the 1988 Rights Agreement shall be amended by
adding the following new paragraph (f):
(f) In no event will the Rights Agent have any liability
hereunder in respect of any such Principal Party transactions,
including, without limitation, the propriety thereof. The Rights Agent
may rely and be fully protected in relying upon a certificate of the
Company stating that the provisions of this Section have been
fulfilled.
(i) Section 20 of the 1988 Rights Agreement shall be amended by
adding the following at the end of paragraph (k):
Subject to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or
omitted by it in connection with the administration of this Agreement
if such acts or omissions are in reliance upon (i) the proper
execution of the certification concerning beneficial ownership
appended to the form of assignment and the form of election to
purchase attached hereto unless the Rights Agent shall have actual
knowledge that, as executed, such certification is untrue or (ii) the
non-execution of such certification including, without limitation, any
refusal to honor any otherwise permissible assignment or election by
reason of such non-execution. The Company agrees to give the Rights
Agent prompt written notice of any event or ownership known to the
Company which would prohibit the exercise or transfer of the Right
Certificate.
(j) Section 31 of the 1988 Rights Agreement shall be amended by
adding the following proviso to the end of such Section:
; provided, however, that the rights and obligations of the Rights
Agent shall be governed and construed in accordance with the laws of
the State of New York.
SECTION 2. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall for all purposes be deemed an
original and which together shall constitute one and the same instrument.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed, all as of the day and year first above written.
AIRGAS, INC.
By: /s/ Gordon L. Keen, Jr.
--------------------------------
Name: Gordon L. Keen, Jr.
Title: Sr. Vice President - Law and
Corporate Developement
THE BANK OF NEW YORK, as Rights Agent
By: /s/ Richard T. Hanrahan
---------------------------------
Name: Richard T. Hanrahan
Title: Assistant Vice President
-4-
