<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
January 30, 1996
(Date of earliest event reported)
PS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7141 95-2760133
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
4370 La Jolla Village Drive, Suite 1050
San Diego, California 92122
(Address of principal executive offices and zip code)
(619) 642-2999
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
PS Group, Inc. (the "Company") has entered into an Agreement and Plan
of Reorganization dated as of January 30, 1996, pursuant to which the Company
will, if shareholder approval is obtained and certain other conditions are
satisfied, undergo a holding company reorganization transaction (the
"Reorganization") pursuant to which the Company will become a wholly-owned
subsidiary of a newly-formed holding company which is currently a subsidiary of
the Company, PS Group Holdings, Inc., a Delaware corporation ("Holdings"), and
shareholders of the Company will receive shares of Holdings in exchange for
their shares in the Company. The sole purpose of the Reorganization is to help
preserve the Company's substantial tax benefits (in the form of net operating
loss carryforwards, investment tax credit carryforwards and other tax benefits)
by implementing transfer restrictions applicable to the shares of Holdings in
the certificate of incorporation of Holdings that are intended to help decrease
the risk of an "ownership change" for federal tax purposes which could have
adverse tax consequences to the Company. The Agreement and Plan of
Reorganization is incorporated herein by reference and attached hereto as
Exhibit 2.1. A copy of the press release relating to the Reorganization is
incorporated herein by reference and attached hereto as Exhibit 99.1.
In connection with the approval of the Reorganization, the Board of
Directors of the Company approved an amendment to the Rights Agreement dated as
of June 30, 1986, between the Company (formerly PSA, Inc.) and Chemical Bank (as
successor Rights Agent to Bank of America, N.T. & S.A., the "Rights Agent") (the
"Fifth Amendment"). The Fifth Amendment adds a new Section 33, which exempts the
Reorganization from the operation of the Rights Agreement. An Amended and
Restated Rights Agreement between the Company and Chemical Bank, cumulatively
reflecting such Fifth Amendment plus the amendments previously made on December
6, 1986, September 15, 1988, September 16, 1990 and December 14, 1990, is
incorporated by reference and attached hereto as Exhibit 4.1.
<PAGE>
Item 7. (c) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- --------- -----------
<S> <C>
2.1 Agreement and Plan of Reorganization dated as of January 30, 1996
4.1 Amended and Restated Rights Agreement dated as of June 30, 1986
99.1 Press Release dated February 9, 1996
</TABLE>
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PS GROUP, INC.
(Registrant)
Date: February 16, 1996
By: /s/CHARLES E. RICKERSHAUSER, JR.
--------------------------------
Charles E. Rickershauser, Jr.,
Chairman of the Board and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
The following exhibits are hereby filed as part of this Form 8-K:
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization dated as of
January 30, 1996
4.1 Amended and Restated Rights Agreement dated as
of June 30, 1986
99.1 Press Release dated February 9, 1996
</TABLE>
-5-
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF
REORGANIZATION BY AND AMONG
PS GROUP, INC., PS GROUP HOLDINGS, INC. AND
PSG MERGER SUBSIDIARY, INC.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
January 31, 1996, among PS Group, Inc., a Delaware corporation (the "Company"),
PS Group Holdings, Inc., a Delaware corporation ("Holdings"), and PSG Merger
Subsidiary, Inc., a Delaware corporation ("Merger Sub").
WITNESSETH:
WHEREAS, the Company has an authorized capital stock consisting of
10,500,000 shares of common stock, par value $1.00 per share (the "Company
Common Stock"), of which 6,068,313 shares are issued and outstanding on the date
hereof, and 1,000,000 shares of preferred stock, par value $1.00 per share, none
of which are outstanding on the date hereof; and
WHEREAS, Holdings has an authorized capital stock consisting of 10,500,000
shares of common stock, par value $1.00 per share (the "Holdings Common Stock"),
of which 100 shares are issued and outstanding and are held by the Company on
the date hereof, and 1,000,000 shares of preferred stock, par value $1.00 per
share, none of which are outstanding on the date hereof (the "Holdings Preferred
Stock"); and
WHEREAS, Merger Sub has an authorized capital stock consisting of 100
shares of common stock (the "Merger Sub Common Stock"), all of which are issued
and outstanding and are held by Holdings on the date hereof; and
WHEREAS, the Company, Holdings and Merger Sub desire to effect a
reorganization of the Company into a holding company structure (the
"Reorganization") by means of the Merger (as defined below), pursuant to which
the Company will become a wholly-owned subsidiary of Holdings and shareholders
of the Company will exchange their shares of Company Common Stock for shares of
Holdings Common Stock; and
WHEREAS, the boards of directors of the Company and Merger Sub each desire
that, to facilitate the Reorganization, Merger Sub merge with and into the
Company (the "Merger") pursuant to Section 251 of the General Corporation Law of
the State of Delaware (the "DGCL") on the terms set forth in this Agreement,
which is intended to constitute, inter alia, an agreement of merger for the
----------
purposes of the DGCL, and the boards of directors of the Company and Merger Sub
have each approved this Agreement; and
WHEREAS, the board of directors of Holdings has approved this Agreement and
authorized Holdings to join and be bound by it; and
WHEREAS, the board of directors of the Company has directed that this
Agreement be submitted to a vote of the Company's stockholders at a special
meeting of stockholders (the "Special Meeting"); and
WHEREAS, Holdings, as the sole stockholder of Merger Sub, and the Company,
as the sole stockholder of Holdings, have each adopted this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the parties hereto agree as follows:
1
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ARTICLE 1: THE MERGER
1.1 The Merger; Effect of Merger. At the Effective Time (as defined in
----------------------------
Section 1.2 below), Merger Sub shall be merged with and into the Company
pursuant to Section 251 of the DGCL, the separate existence of Merger Sub shall
cease, and the Company, as the surviving corporation, shall continue its
corporate existence under the laws of the State of Delaware under the name of
"PS Group, Inc.," all with the effect provided in the DGCL. The Company, as the
surviving corporation, shall succeed, insofar as permitted by law, to all
rights, assets, liabilities and obligations of Merger Sub in accordance with the
General Corporation Law of the State of Delaware.
1.2 Effective Time. The Effective Time shall be the time at which a duly
--------------
executed and certified copy of a Certificate of Merger with respect to the
Merger (the "Certificate of Merger") is filed in the office of the Secretary of
State of Delaware in accordance with the provisions of the DGCL.
1.3 Company Certificate of Incorporation. The restated certificate of
------------------------------------
incorporation, as amended, of the Company, as in effect immediately prior to the
Effective Time, shall be and remain the restated certificate of incorporation,
as amended, of the Company, as the surviving corporation, following the
Effective Time until it shall be amended as provided by law.
1.4 Company By-laws. The by-laws of the Company, as in effect immediately
---------------
prior to the Effective Time, shall be and remain the bylaws of the Company, as
the surviving corporation, following the Effective Time until the same shall be
altered, amended or repealed.
1.5 The Company's Directors and Officers. The directors and officers,
------------------------------------
respectively, of the Company immediately prior to the Effective Time shall
continue as the directors and officers, respectively, of the Company following
the Effective Time, to hold office until the expiration of their current terms
or their prior resignation, removal or death.
1.6 Holdings' Certificate of Incorporation and By-laws. Prior to the
-------------------------------------------------
Effective Time, Holdings shall cause its Certificate of Incorporation and Bylaws
to read in their entirety substantially as set forth in Annexes A and B,
respectively.
ARTICLE 2: CONVERSION OF SHARES
2.1 Company Common Stock. At the Effective Time, automatically by virtue
--------------------
of the Merger and without any further action by any of the parties hereto or any
other person, each share of Company Common Stock issued and outstanding or held
in the treasury of the Company immediately prior to the Effective Time shall be
converted into the right to receive one share of Holdings Common Stock upon
compliance with the procedures specified in Article 3 of this Agreement. No
shares of Company Common Stock shall be issued or outstanding after the
Effective Time except as set forth in Section 2.2 below.
2.2 Merger Sub Common Stock. At the Effective Time, automatically by
-----------------------
virtue of the Merger and without any further action by any of the parties hereto
or any other person, each share of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted into one share of
Company Common Stock and, as a result thereof, Holdings shall become the sole
stockholder of the Company.
2
<PAGE>
2.3 Holdings Common Stock. At the Effective Time, automatically by virtue
---------------------
of the Merger and without any further action by any of the parties hereto or any
other person, each share of Holdings Common Stock issued and outstanding and
held by the Company immediately prior to the Effective Time shall be cancelled
and cease to be issued or outstanding.
2.4 Stock Option Plans. At the Effective Time, Holdings shall assume and
------------------
continue the Company's 1984 Stock Incentive Plan, as amended, and the Recontek,
Inc. 1987 Employment Stock Option Plan (together with the 1984 Stock Incentive
Plan, the "Stock Option Plans"), be substituted as the "Company" under the terms
and provisions of each of the Stock Option Plans and assume all rights and
obligations of the Company under each of the Stock Option Plans as theretofore
in effect and all stock options outstanding thereunder (the "Outstanding
Options"). The Stock Option Plans and the Outstanding Options shall, pursuant
to their terms, thereafter apply to shares of Holdings Common Stock in the same
manner as they theretofore applied to shares of Company Common Stock. Prior to
the Effective Time, the Company shall take such action with respect to the Stock
Option Plans as is appropriate to facilitate performance of the foregoing
provisions of this Section 2.4.
ARTICLE 3: EXCHANGE OF STOCK CERTIFICATES
3.1 Appointment of Exchange Agent. At or prior to the Effective Time,
-----------------------------
Holdings shall appoint a bank or trust company selected by Holdings as exchange
agent ("Exchange Agent") for the purpose of facilitating the exchange of
certificates representing shares of Company Common Stock ("Company
Certificates") for certificates representing shares of Holdings Common Stock
("Holdings Certificates").
3.2 Exchange of Certificates. As soon as practicable after the Effective
------------------------
Time, the Exchange Agent shall mail to each holder of record of Company
Certificates a form letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates shall
pass, only upon delivery of the Company Certificates to the Exchange Agent) and
instructions for use in effecting the surrender of the Company Certificates in
exchange for Holdings Certificates. Upon proper surrender of a Company
Certificate for exchange and cancellation to the Exchange Agent, together with
such properly completed letter of transmittal, duly executed, the holder of such
Company Certificate shall be entitled to receive in exchange therefor a Holdings
Certificate representing a number of shares of Holdings Common Stock equal to
the number of shares of Company Common Stock represented by the surrendered
Company Certificate.
3.3 Restriction on Payment of Dividends and Distributions. No dividends
-----------------------------------------------------
or other distributions declared after the Effective Time with respect to
Holdings Common Stock shall be paid to the holder of any unsurrendered Company
Certificate until the holder thereof shall surrender such Company Certificate in
accordance with Section 3.2. After the surrender of a Company Certificate in
accordance with Section 3.2, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of Holdings Common
Stock represented by such Company Certificate. Notwithstanding the foregoing,
none of Holdings, the Company, the Exchange Agent or any other person shall be
liable to any former holder of shares of Company Common Stock for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
3
<PAGE>
3.4 Issuance of a Holdings Certificate in a Different Name. If any
------------------------------------------------------
Holdings Certificate is to be issued in a name other than that in which the
Company Certificate surrendered in exchange therefor is registered, it shall be
a condition of the issuance thereof that the Company Certificate so surrendered
shall be properly endorsed (or accompanied by an appropriate instrument of
transfer) and otherwise in proper form for transfer, and that the person
requesting such exchange shall pay to the Exchange Agent in advance any transfer
or other taxes required by reason of the issuance of a Holdings Certificate in
any name other than that of the registered holder of the Company Certificate
surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
3.5 No Transfers of Company Common Stock after the Effective Time. After
-------------------------------------------------------------
the Effective Time, there shall be no transfers on the stock transfer books of
the Company of the shares of Company Common Stock which were issued and
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Company Certificates representing such shares are presented for transfer,
no transfer shall be effected on the stock transfer books of Holdings with
respect to such shares and no Holdings Certificate shall be issued representing
the shares of Holdings Common Stock exchangeable for such shares of Company
Common Stock unless and until such Company Certificate is delivered to the
Exchange Agent together with properly completed and duly executed copies of all
documents required by Section 3.2 (or such other documents as are satisfactory
to Holdings and the Exchange Agent in their sole discretion).
3.6 Lost Company Certificates. In the event any Company Certificate shall
-------------------------
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Company Certificate to be lost, stolen or
destroyed and, if required by Holdings, the posting by such person of a bond in
such amount as Holdings may determine is reasonably necessary as indemnity
against any claim that may be made against it with respect to such Company
Certificate, the Exchange Agent will issue, in exchange for such lost, stolen,
or destroyed Company Certificate, a Holdings Certificate representing the shares
of Holdings Common Stock deliverable in respect of such Company Certificate
pursuant to this Agreement.
ARTICLE 4: CONDITIONS TO REORGANIZATION
4.1 Conditions to Merger. The consummation of the Reorganization is
--------------------
subject to the satisfaction, or (to the extent permitted by law) waiver by the
Company, of the following conditions prior to the Effective Time:
(a) Consents. Any consents, approvals or authorizations that the
--------
Company deems necessary or appropriate to be obtained in connection with the
consummation of the Reorganization shall have been obtained;
(b) Stockholder Approval. This Agreement shall have been adopted by
--------------------
the holders of Company Common Stock in accordance with the DGCL;
(c) Listing. Holdings Common Stock to be issued or reserved for
-------
issuance in connection with the Reorganization shall have been approved for
listing, upon official notice of issuance, by the New York Stock Exchange and
the Pacific Stock Exchange; and
4
<PAGE>
(d) Tax Opinion. The Company shall have received, in form and
-----------
substance satisfactory to it, an opinion from Munger, Tolles & Olson with
respect to certain federal income tax effects of the Reorganization and the
provisions of Article XI of Annex A hereto.
ARTICLE 5: AMENDMENT, DEFERRAL AND TERMINATION
5.1 Amendment. Subject to Section 251(d) of the DGCL, the parties hereto,
---------
by mutual consent of their respective boards of directors, may amend this
Agreement prior to the filing of the Certificate of Merger with the Secretary of
State of Delaware.
5.2 Deferral. Consummation of the Reorganization may be deferred by the
--------
board of directors of the Company or any authorized officer of the Company for a
reasonable period of time following the Special Meeting if said board of
directors or authorized officer determines that such deferral would be in the
best interests of the Company and its stockholders.
5.3 Termination. This Agreement may be terminated and the Reorganization
-----------
may be abandoned at any time prior to the filing of the Certificate of Merger
with the Secretary of State of Delaware, whether before or after adoption of
this Agreement by the stockholders of the Company, by action of the board of
directors of the Company, if said board of directors determines that the
consummation of the Reorganization would not, for any reason, be in the best
interests of the Company and its stockholders.
ARTICLE 6: MISCELLANEOUS
6.1 Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware.
6.2 Further Assurances. From time to time on and after the Effective
------------------
Time, each party hereto agrees that it will execute and deliver or cause to be
executed and delivered all such further assignments, assurances or other
instruments, and shall take or cause to be taken all such further actions, as
may be necessary or desirable to consummate the Reorganization. Merger Sub
hereby authorizes and empowers the Company, as the surviving corporation, to
execute and deliver all such assignments, assurances and other instruments and
to take all such further actions in the name of Merger Sub following the
Effective Time.
6.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts and each such counterpart hereof shall be deemed to be an original
instrument but all such counterparts together shall constitute but one
agreement.
6.4 Descriptive Headings. The descriptive headings herein are inserted
--------------------
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to authority duly
granted by its board of directors, has caused this Agreement to be executed by a
duly authorized officer thereof, and has further caused its corporate seal to be
hereunto affixed and attested, as of the date first written above.
5
<PAGE>
PS GROUP, INC.
/s/ Charles E. Rickershauser, Jr.
_________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
PS GROUP HOLDINGS, INC.
/s/ Charles E. Rickershauser, Jr.
_________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
PSG MERGER SUBSIDIARY, INC.
/s/ Charles E. Rickershauser, Jr.
_________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
6
<PAGE>
ANNEX A
RESTATED CERTIFICATE OF
INCORPORATION OF PS GROUP
HOLDINGS, INC. TO BE IN EFFECT
IMMEDIATELY FOLLOWING THE
REORGANIZATION
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
PS GROUP HOLDINGS, INC.
ARTICLE I
The name of this corporation is PS Group Holdings, Inc.
ARTICLE II
The address of this corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle and the name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
(A) The total number of shares of all classes of capital stock which this
corporation shall have the authority to issue is eleven million five hundred
thousand (11,500,000) shares, of which ten million five hundred thousand
(10,500,000) shares shall be of the par value of $1.00 per share and designated
"Common Stock" and one million (1,000,000) shares shall be of the par value of
$1.00 per share and designated "Preferred Stock".
(B) The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one or
more series, with such voting powers, full or limited, or without voting powers,
and with such designation, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof as
shall be stated and expressed in the resolution or resolutions providing for the
issue thereof adopted by the Board of Directors, and as are not stated and
expressed in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the following:
(1) The designation of and number of shares constituting such series;
(2) The dividend rate of such series, the conditions and dates upon
which such dividends shall be payable, the preference or relation which
such dividends shall bear to the dividends payable on any other class or
classes or of any other class of capital stock or series thereof and
whether such dividends shall be cumulative or noncumulative;
A-1
<PAGE>
(3) Whether the shares of such series shall be subject to redemption
by this corporation, and, if made subject to such redemption, the times,
prices and other terms and conditions of such redemption;
(4) The terms and amount of any sinking fund provided for the purchase
or redemption of the shares of such series;
(5) Whether or not the sales of such series shall be convertible into
or exchangeable for shares of any other class or classes or of any other
series of any class or classes of capital stock of this corporation, and if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(6) Whether or not the shares of such series shall have voting rights,
in addition to the voting rights provided by law, and, if so, the terms and
conditions of such voting rights;
(7) The restrictions, if any, on the issue or reissue of any
additional Preferred Stock; and
(8) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, this corporation.
ARTICLE V
(A) The number of directors of this corporation shall be fixed and may be
altered from time to time as may be provided in the By-laws. The directors of
this corporation need not be stockholders therein.
(B) The Board of Directors shall be and is divided into three classes,
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director shall serve for a term ending on the date of the third
annual meeting following the annual meeting at which such director was elected;
provided, however, that each initial director in Class I shall hold office until
the annual meeting of stockholders in 1997; each initial director in Class II
shall hold office until the annual meeting of stockholders in 1998; and each
initial director in Class III shall hold office until the annual meeting of
stockholders in 1999.
(C) In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless continue as
a director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation, or removal, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board of Directors among the three classes
of directors so as to maintain such classes as nearly equal as possible.
(D) Notwithstanding any of the foregoing provisions of this Article, each
director shall serve until his successor is elected and qualified or until his
death, retirement, resignation or removal. Should a vacancy occur or be
created, whether arising through death, resignation or removal of a director or
through an increase in the number of directors of any class, such vacancy shall
be filled by a majority vote of the remaining directors of the class in which
such
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<PAGE>
vacancy occurs, or by the sole remaining director of that class if only one such
director remains, or by the majority vote of the remaining directors of the
other two classes if there be no remaining member of the class in which the
vacancy occurs. A director so elected to fill a vacancy shall serve for the
remainder of the then present term of office of the class to which he was
elected.
ARTICLE VI
All of the powers of this corporation, insofar as the same may be lawfully
vested by this Certificate of Incorporation in the Board of Directors, are
hereby conferred upon the Board of Directors of this corporation. In
furtherance and not in limitation of that power, the Board of Directors shall
have the power to make, adopt, alter, amend and repeal from time to time By-laws
of this corporation, subject to the right of the stockholders entitled to vote
with respect thereto to adopt, alter, amend and repeal By-laws made by the Board
of Directors; provided, however, that By-laws shall not be adopted, altered,
amended or repealed by the stockholders of the corporation except by the vote of
the holders of not less than 66-2/3% of the outstanding shares of Common Stock.
ARTICLE VII
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of the
corporation shall not be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article shall not result in any
liability for a director with respect to any action or omission occurring prior
to such repeal or modification.
ARTICLE VIII
Action shall be taken by the stockholders only at annual or special
meetings of stockholders and stockholders may not act by written consent.
ARTICLE IX
(A) Subject to the provisions of any series of Preferred Stock which may at
the time be outstanding, the affirmative vote of the holders of not less than
66-2/3% of the outstanding shares of Common Stock of this corporation, which
shall include the affirmative vote of at least 50% of the outstanding shares of
Common Stock held by stockholders other than a "related person" (as hereinafter
defined), shall be required for the approval or authorization of any "business
combination" (as hereinafter defined) of this corporation with any related
person; provided, however, that such 66-2/3% voting requirement shall not be
applicable if:
(1) The business combination was approved by the Board of Directors of
the corporation either (a) prior to the acquisition by such related person
of the beneficial ownership of 20% or more of the outstanding shares of the
Common Stock of the
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<PAGE>
corporation, or (b) after such acquisition, but only so long as such
related person has sought and obtained the unanimous approval by the Board
of Directors of such acquisition of more than 20% of the Common Stock prior
to such acquisition being consummated; or
(2) The business combination is solely between this corporation and
another corporation, 50% or more of the voting stock of which is owned by
this corporation and none of which is owned by a related person; provided
that each stockholder of this corporation receives the same type of
consideration in such transaction in proportion to his stockholdings; or
(3) All of the following conditions are satisfied:
(a) The cash or fair market value of the property, securities or
other consideration to be received per share by holders of Common
Stock of this corporation in the business combination is not less than
the higher of (i) the highest per share price (including brokerage
commissions, soliciting dealers' fees, dealer-management compensation,
and other expenses, including, but not limited to, costs of newspaper
advertisements, printing expenses and attorneys' fees) paid by such
related person in acquiring any of its holdings of this corporation's
Common Stock or (ii) an amount which bears the same or a greater
percentage relationship to the market price of this corporation's
Common Stock immediately prior to the announcement of such business
combination as the highest per share price determined in (i) above
bears to the market price of this corporation's Common Stock
immediately prior to the commencement of acquisition of this
corporation's Common Stock by such related person, but in no event in
excess of two times the highest per share price determined in (i),
above; and
---
(b) After becoming a related person and prior to the consummation
of such business combination, (i) such related person shall not have
acquired any newly issued shares of capital stock, directly or
indirectly, from this corporation (except upon conversion of
convertible securities acquired by it prior to becoming a related
person or upon compliance with the provision of this Article IX or as
a result of a pro rata stock dividend or stock split) and (ii) such
--- ----
related person shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder) of any loans,
advances, guarantees, pledges or other financial assistance or tax
credits provided by this corporation, or made any major changes in
this corporation's business or equity capital structure; and
---
(c) A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, whether or not this corporation is
then subject to such requirements, shall be mailed to the public
stockholders of this corporation for the purpose of soliciting
stockholder approval of such business combination and shall contain at
the front thereof, in a prominent place (i) any recommendations as to
the advisability (or inadvisability) of the business combination which
the continuing directors, or any outside directors, may choose to
state, and (ii) the opinion of a reputable national investment banking
firm as to the fairness (or not) of the terms of such business
combination, from the point of view of the remaining public
stockholders of this corporation (such investment banking firm to be
engaged solely on behalf of the remaining public stockholders,
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<PAGE>
to be paid a reasonable fee for its services by this corporation upon
receipt of such opinion, to be one of the so-called major bracket
investment banking firms which has not previously been associated with
such related person and, if there are at the time any such directors,
to be selected by a majority of the continuing directors and outside
directors).
(B) For purposes of this Article IX:
(1) The term "business combination" shall mean (a) any merger or
consolidation of this corporation with or into a related person, (b) any
sale, lease, exchange, transfer or other disposition, including without
limitation, a mortgage or any other security device, of all or any
substantial part of the assets of this corporation (including without
limitation any voting securities of a subsidiary) or of a subsidiary, to a
related person, (c) any merger or consolidation of a related person with or
into this corporation or a subsidiary of this corporation, (d) any sale,
lease, exchange, transfer or other disposition of all or any substantial
part of the assets of a related person to this corporation or a subsidiary
of this corporation, (e) the issuance of any securities of this corporation
or a subsidiary of this corporation to a related person, (f) the
acquisition by this corporation or a subsidiary of this corporation of any
securities of a related person, (g) any reclassification of Common Stock of
this corporation, or any recapitalization involving Common Stock of this
corporation, consummated within five years after a related person becomes a
related person, and (h) any agreement, contract or other arrangement
providing for any of the transactions described in this definition of
business combination;
(2) The term "related person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with its
"affiliates" and "associates" (defined below), "beneficially" owns (as this
term is defined in Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934), in the aggregate 20% or more of the
outstanding shares of the Common Stock of this corporation, and any
"affiliate" or "associate" (as those terms are defined in Rule 12b-2 under
the Securities Exchange Act of 1934) of any such individual, corporation,
partnership or other person or entity;
(3) The term "substantial part" shall mean more than 10% of the total
assets of the corporation in question, as of the end of its most recent
fiscal year ending prior to the time the determination is being made;
(4) Without limitation, any shares of Common Stock of this corporation
which any related person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, shall be deemed beneficially owned by such related person;
(5) For the purposes of subparagraph (A)(3) of this Article IX, the
term "other consideration to be received" shall include, without
limitation, Common Stock of this corporation retained by its existing
public stockholders in the event of a business combination with such
related person in which this corporation is the surviving corporation; and
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<PAGE>
(6) With respect to any proposed business combination, the term
"continuing director" shall mean a director who was a member of the Board
of Directors of this corporation immediately prior to the time that any
related person involved in the proposed business combination acquired 20%
or more of the outstanding shares of Common Stock of the corporation, and
the term "outside director" shall mean a director who is not (a) an officer
or employee of this corporation or any relative of an officer or employee,
(b) a related person or an officer, director, employee, associate or
affiliate of a related person, or a relative of any of the foregoing, or
(c) a person having a direct or indirect material business relationship
with this corporation.
ARTICLE X
The provisions set forth in this Article X and in Articles V, VI, VIII, IX
and XI herein may not be repealed or amended in any respect, and no article
imposing cumulative voting in the election of directors may be added, unless
such action is approved by the affirmative vote of the holders of not less than
66-2/3% of the outstanding shares of Common Stock of this corporation, subject
to the provisions of any series of Preferred Stock which may at the time be
outstanding; provided, however, that if there is a related person (as defined in
Article IX), such 66-2/3% vote must include the affirmative vote of at least 50%
of the outstanding shares of Common Stock held by stockholders other than the
related person; and provided further that, notwithstanding this Article X,
Article XI hereof may be amended or modified by the Board of Directors as
provided in Article XI.
ARTICLE XI
(A) TRANSFER RESTRICTIONS. In order to preserve the net operating loss
carryforwards (including any "net unrealized built-in loss," as defined under
applicable law), capital loss carryforwards, general business credit
carryforwards, alternative minimum tax credit carryforwards and other tax
benefits (collectively, the "Tax Benefits") to which the corporation or any
member of the corporation's "affiliated group" as that term is used in Section
1504 of the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute (collectively, the "Code"), is or becomes entitled prior to
the Expiration Date (as hereinafter defined) pursuant to the Code and the
Treasury Regulations promulgated thereunder, as amended from time to time
("Treasury Regulations") or any applicable state statute, the following
restrictions shall apply until the earlier of (x) the day after the fifteenth
(15th) anniversary of the effective time of the merger of PSG Merger Subsidiary,
Inc. with and into PS Group, Inc. (the "Merger"), (y) the repeal of Section 382
of the Code if the Board of Directors determines that the restrictions in this
Article XI are no longer necessary, and (z) the beginning of a taxable year of
the corporation to which the Board of Directors determines that no Tax Benefits
may be carried forward, unless the Board of Directors shall fix an earlier or
later date in accordance with Section (E) of this Article XI. (The date on
which the restrictions of this Article XI expire hereunder is sometimes referred
to herein as the "Expiration Date.")
(1) Definitions. For purposes of this Article XI:
-----------
(a) a "Preexisting 5-Percent Shareholder" shall mean (i)
Berkshire Hathaway Inc. or any direct or indirect majority-owned
subsidiary of Berkshire Hathaway Inc.; (ii) J.P. Guerin, Fabienne M.
Guerin, the John Patrick Guerin
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<PAGE>
Trust, the Guerin Family Trust and the J. Patrick Guerin III Trust;
(iii) ESL Partners, L.P.; (iv) any Person who establishes to the
satisfaction of the Board of Directors that such Person was a "5-
percent shareholder" of PS Group, Inc. within the meaning of Treasury
Regulation Section 1.382-2T(g)(1)(i) or a "first tier entity" of PS
Group, Inc. within the meaning of Treasury Regulation Section 1.382-
2T(f)(9) on [______________, 1996] [the day before PS Group, Inc.
first announced its intention to seek to implement the Transfer
Restrictions]; and (v) any "5-percent owner," or "higher tier entity,"
of any Person described in parts (i) through (iv) above, within the
meaning of Treasury Regulation Section 1.382-2T(f)(10) and 1.382-
2T(f)(14), respectively;
(b) a "Prohibited Ownership Percentage" shall mean any Stock
ownership that would cause a Person or Public Group to be a "5-percent
shareholder" of the corporation within the meaning of Treasury
Regulation Section 1.382-2T(g)(1)(i) or (ii); for this purpose,
whether a Person or Public Group would be a "5 percent shareholder"
shall be determined (i) without giving effect to the following
provisions: Treasury Regulation Sections 1.382-2T(g)(2), 1.382-
2T(g)(3), 1.382-2T(h)(2)(iii) and 1.382-2T(h)(6)(iii), (ii) by
treating every Person or Public Group which owns Stock, whether
directly or by attribution, as directly owning such Stock
notwithstanding any further attribution of such Stock to other Persons
and notwithstanding Treasury Regulation Section 1.382-2T(h)(2)(i)(A),
(iii) by substituting the term "Person" in place of "individual" in
Treasury Regulation Section 1.382-2T(g)(1)(i), (iv) by taking into
account ownership of Stock at any time during the "testing period" as
defined in Treasury Regulation Section 1.382-2T(d)(1), and (v) by
treating each day during the testing period as if it were a "testing
date" as defined in Treasury Regulation Section 1.382-2(a)(4)(i); in
addition, for the purpose of determining whether any Person or Public
Group has a Prohibited Ownership Percentage as of any date, the
definition of Stock set forth in part (e) of this subparagraph (A)(1)
shall be applied in lieu of the definition in Treasury Regulation
Section 1.382-2T(f)(18), except that any Option shall be treated as
Stock only to the extent treating it as Stock would cause an increase
in ownership of Stock by such Person and such Option would be deemed
exercised pursuant to Treasury Regulations in effect from time to time
(disregarding whether treating such Option as exercised would cause an
ownership change);
(c) a "Public Group" shall have the meaning contained in Treasury
Regulation Section 1.382-2T(f)(13), excluding any "direct public
group" with respect to the corporation, as that term is used in
Treasury Regulation Section 1.382-2T(j)(2)(ii);
(d) a "Person" shall mean any individual, corporation, estate,
trust, association, company, partnership, joint venture, or similar
organization (including the corporation), or any other entity
described in Treasury Regulation Section 1.382-3(a)(1)(i);
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<PAGE>
(e) "Stock" refers to all classes of stock of the corporation,
all Options to acquire stock of the corporation and all other
interests that would be treated as stock in the corporation pursuant
to Treasury Regulation Section 1.382-2T(f)(18)(iii), other than (i)
stock described in Section 1504(a)(4) of the Code and (ii) stock that
would be described in such Section 1504(a)(4) but is not so described
solely because it is entitled to vote as a result of dividend
arrearages;
(f) "Option" shall have the meaning set forth in Treasury
Regulation Section 1.382-4;
(g) "Transfer" shall mean any conveyance, by any means, of legal
or beneficial ownership (direct or indirect) of shares of Stock,
whether such means are direct or indirect, voluntary or involuntary,
including, without limitation, the transfer of any ownership interest
in any entity that owns (directly or indirectly) shares of Stock (and
any reference in this Article XI to a Transfer of Stock shall include
any Transfer of any interest in any such entity and references to the
Persons to whom Stock is Transferred shall include Persons to whom any
interest in any such entity shall have been Transferred); and
(h) "Transferee" means any Person to whom Stock is Transferred.
(2) Prohibited Transfers. From and after the effective time of the
--------------------
Merger, no Person shall Transfer any Stock to any other Person to the
extent that such Transfer, if effected: (a) would cause the Transferee or
any Person or Public Group to have a Prohibited Ownership Percentage; (b)
would increase the Stock ownership percentage (determined in accordance
with Section 382 of the Code and the Treasury Regulations thereunder) of
any Transferee or any Person or Public Group having a Prohibited Ownership
Percentage; or (c) would create, under Treasury Regulation Section 1.382-
2T(j)(3)(i), a new "public group" as that term is used in Treasury
Regulation Section 1.382-2T(f)(13); provided, however, that (x) part (c) of
this subparagraph (A)(2) shall not apply to any Transfer of Stock by (but
not to) a Preexisting 5-Percent Shareholder if such Transfer is not
prohibited by part (a) or (b) of this subparagraph (A)(2) and if such Stock
was acquired by such Preexisting 5-Percent Shareholder in exchange for
shares of stock of PS Group, Inc. that were owned by such Preexisting 5-
Percent Shareholder (within the meaning of Section 382) on [____________,
1996], [the day before PS Group, Inc. first announced its intention to seek
to implement the Transfer Restrictions], and (y) nothing in this Article XI
shall prohibit the Transfer of any interest in any Preexisting 5-Percent
Shareholder.
(3) Board of Directors Consent to Certain Transfers. The Board of
------------------------------------------------
Directors may permit any Transfer of shares of Stock that would otherwise
be prohibited pursuant to subparagraph (A)(2) of this Article XI if
information relating to a specific proposed transaction is presented to the
Board of Directors and the Board of Directors determines that, based on the
facts in existence at the time of such determination, such transaction will
not delay, prevent or otherwise jeopardize the corporation's full
utilization of the Tax Benefits. The Board of Directors may impose any
conditions that it deems reasonable and appropriate in connection with such
a Transfer, including without limitation, restrictions on the ability of
any Transferee to Transfer shares of Stock acquired through such Transfer;
provided, however, that any such restrictions shall be
A-8
<PAGE>
consented to by such Transferee and the certificates representing such
shares of Stock shall include an appropriate legend.
(4) Waiver of Restrictions. Notwithstanding anything herein to the
----------------------
contrary, the Board of Directors may waive any of the restrictions
contained in subparagraph (A)(2) of this Article XI in any instance in
which the Board of Directors determines that a waiver would be in the best
interests of the corporation, notwithstanding the effect of such waiver on
the Tax Benefits.
(B) PURPORTED TRANSFER IN VIOLATION OF TRANSFER RESTRICTION. Unless the
approval or waiver of the Board of Directors is obtained as provided in
subparagraphs (A)(3) or (A)(4) of this Article XI, any purported Transfer of
Stock in excess of the shares that could be Transferred to the Transferee
without restriction under subparagraph (A)(2) of this Article XI shall not be
effective to Transfer record, legal, beneficial or any other ownership of such
excess shares (the "Prohibited Shares") to the purported acquiror of any form of
such ownership (the "Purported Acquiror"), who shall not be entitled to any
rights as a stockholder of the corporation with respect to the Prohibited Shares
(including, without limitation, the right to vote or to receive dividends with
respect thereto). Any purported record, beneficial, legal or other owner of
Prohibited Shares shall be deemed to be a "Purported Acquiror" of such
Prohibited Shares. If there is more than one Purported Acquiror with respect to
certain Prohibited Shares (for example, if the Purported Acquiror of record
ownership of such Prohibited Shares is not the Purported Acquiror of beneficial
ownership of such Prohibited Shares), then references to "Purported Acquiror"
shall include any or all of such Purported Acquirors, as appropriate.
Subparagraphs (B)(1) and (B)(2) below shall apply only in the case of violations
of the restrictions contained in parts (a) and (b) of subparagraph (A)(2) of
this Article XI.
(1) Transfer of Prohibited Shares and Prohibited Distributions to
-------------------------------------------------------------
Agent. Upon demand by the corporation, the Purported Acquiror shall
-----
transfer or cause the transfer of any certificate or other evidence of
purported ownership of the Prohibited Shares within the Purported
Acquiror's possession or control, along with any dividends or other
distributions paid by the corporation with respect to the Prohibited Shares
that were received by the Purported Acquiror (the "Prohibited
Distributions"), to an agent designated by the corporation (the "Agent").
The Agent shall sell in an arms-length transaction (through the New York
Stock Exchange, if possible, but in any event consistent with applicable
law) any Prohibited Shares transferred to the Agent by the Purported
Acquiror. (The proceeds of such sale shall be referred to as "Sales
Proceeds.") If the Purported Acquiror has sold the Prohibited Shares to an
unrelated party in an arms-length transaction after purportedly acquiring
them, the Purported Acquiror shall be deemed to have sold the Prohibited
Shares for the Agent, and in lieu of transferring the Prohibited Shares and
Prohibited Distributions to the Agent shall transfer to the Agent the
Prohibited Distributions and the proceeds of such sale (the "Resale
Proceeds"), except to the extent that the Agent grants written permission
to the Purported Acquiror to retain a portion of the Resale Proceeds not
exceeding the amount that would have been payable by the Agent to the
Purported Acquiror pursuant to subparagraph (B)(2) below if the Prohibited
Shares had been sold by the Agent rather than by the Purported Acquiror.
Any purported Transfer of the Prohibited Shares by the Purported Acquiror
other than a transfer which (a) is described in the preceding sentences of
this subparagraph (B)(1) and (b) does not itself violate the provisions of
this Article XI shall not be effective to transfer any ownership of the
Prohibited Shares.
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<PAGE>
(2) Allocation of Sale Proceeds, Resale Proceeds and Prohibited
-----------------------------------------------------------
Distributions. The Sale Proceeds or the Resale Proceeds, if applicable,
-------------
shall be allocated to the Purported Acquiror up to the following amount:
(a) where applicable, the purported purchase price paid or value of
consideration surrendered by the Purported Acquiror for the Prohibited
Shares, or (b) where the purported Transfer of the Prohibited Shares to the
Purported Acquiror was by gift, inheritance, or any similar purported
Transfer, the fair market value of the Prohibited Shares at the time of
such purported Transfer. Any Resale Proceeds or Sales Proceeds in excess
of the Agent's expenses incurred in performing its duties hereunder and the
amount allocable to the Purported Acquiror pursuant to the preceding
sentence, together with any Prohibited Distributions (such excess amount
and Prohibited Distributions are collectively the "Subject Amounts"), shall
be paid over to an entity designated by the corporation that is described
in Section 501(c)(3) of the Code. In no event shall any such Prohibited
Shares or Subject Amounts inure to the benefit of the corporation or the
Agent, but such amounts may be used to cover expenses incurred by the Agent
in performing its duties hereunder.
(3) Prompt Enforcement Against Purported Acquiror. Within thirty (30)
---------------------------------------------
business days of learning of the purported Transfer of Prohibited Shares to
a Purported Acquiror or a Transfer of Stock which would cause a Person or
Public Group to become a Prohibited Party (as hereinafter defined), the
corporation through its Secretary shall demand that the Purported Acquiror
or the Prohibited Party Group (as hereinafter defined) surrender to the
Agent the certificates representing the Prohibited Shares, or any Resale
Proceeds, and any Prohibited Distributions, and if such surrender is not
made by the Purported Acquiror or Prohibited Party Group within thirty (30)
business days from the date of such demand, the corporation shall institute
legal proceedings to compel such transfer; provided, however, that nothing
in this subparagraph (B)(3) shall preclude the corporation in its
discretion from immediately bringing legal proceedings without a prior
demand, and provided further that failure of the corporation to act within
the time periods set out in this subparagraph (B)(3) shall not constitute a
waiver of any right of the corporation to compel any transfer required by,
or take any action permitted by, this Article XI. Upon a determination by
the Board of Directors that there has been or is threatened a purported
Transfer of Prohibited Shares to a Purported Acquiror or a Transfer of
Stock which would cause a Person or Public Group to become a Prohibited
Party or any other violation of Section (A) of this Article XI, the Board
of Directors may authorize such additional action as it deems advisable to
give effect to the provisions of this Article XI, including, without
limitation, refusing to give effect on the books of the corporation to any
such purported Transfer or instituting proceedings to enjoin any such
purported Transfer.
(4) Other Remedies. In the event that the Board of Directors
--------------
determines that a Person proposes to take any action in violation of
subparagraph (A)(2) of this Article XI, or in the event that the Board of
Directors determines after the fact that an action has been taken in
violation of subparagraph (A)(2) of this Article XI, the Board of
Directors, subject to subparagraph (B)(5) of this Article XI, may take such
action as it deems advisable to prevent or to refuse to give effect to any
purported Transfer or other action which would result, or has resulted, in
such violation, including, but not limited to, refusing to give effect to
such purported Transfer or other action on the books of the corporation or
instituting proceedings to enjoin such purported Transfer or other action.
If any Person shall knowingly violate, or knowingly cause any other Person
under the control of such Person ("Controlled Person") to violate,
subparagraph (A)(2) of this
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<PAGE>
Article XI, then that Person and any Controlled Person shall be jointly and
severally liable for, and shall pay to the corporation, such amount as
will, after taking account of all taxes imposed with respect to the receipt
or accrual of such amount and all costs incurred by the corporation as a
result of such violation, put the corporation in the same financial
position as it would have been in had such violation not occurred.
(5) No Restriction on Settlement of Exchange Transactions. Nothing
-----------------------------------------------------
contained in this Article XI shall preclude the settlement of any
transaction involving Stock entered into through the facilities of the New
York Stock Exchange, the Pacific Stock Exchange or any other national
securities exchange. The application of the provisions and remedies
described in this Section (B) of this Article XI shall be deemed not to so
preclude any such settlement.
(6) Modification of Remedies For Certain Indirect Transfers. In the
-------------------------------------------------------
event of any Transfer of Stock which does not involve a transfer of
"securities" of the corporation within the meaning of the Delaware General
Corporation Law, as amended ("Securities"), but which would cause a Person
or Public Group (the "Prohibited Party") to violate a restriction provided
for in part (a) or (b) of subparagraph (A)(2) of this Article XI, the
application of subparagraphs (B)(1) and (B)(2) shall be modified as
described in this subparagraph (B)(6). In such case, the Prohibited Party
and/or any Person or Public Group whose ownership of the corporation's
Securities is attributed to the Prohibited Party pursuant to Section 382 of
the Code and the Treasury Regulations thereunder (collectively, the
"Prohibited Party Group") shall not be required to dispose of any interest
which is not a Security, but shall be deemed to have disposed of, and shall
be required to dispose of, sufficient Securities (which Securities shall be
disposed of in the inverse order in which they were acquired by members of
the Prohibited Party Group), to cause the Prohibited Party, following such
disposition, not to be in violation of part (a) or (b) of subparagraph
(A)(2) of this Article XI. Such disposition shall be deemed to occur
simultaneously with the Transfer giving rise to the application of this
provision, and such number of Securities which are deemed to be disposed of
shall be considered Prohibited Shares and shall be disposed of through the
Agent as provided in subparagraphs (B)(1) and (B)(2) of this Article XI,
except that the maximum aggregate amount payable to the Prohibited Party
Group in connection with such sale shall be the fair market value of the
Prohibited Shares at the time of the Prohibited Transfer.
(C) OBLIGATION TO PROVIDE INFORMATION. The corporation may require as a
condition to the registration of the Transfer of any Stock that the proposed
Transferee furnish to the corporation all information reasonably requested by
the corporation with respect to all the direct or indirect beneficial or legal
ownership of Stock or Options to acquire Stock by the proposed Transferee and by
Persons controlling, or controlled by or under common control with the proposed
Transferee.
(D) LEGENDS. All certificates issued by the corporation evidencing
ownership of shares of Stock of this corporation that are subject to the
restrictions on Transfer contained in this Article XI shall bear a conspicuous
legend referencing the restrictions set forth in this Article XI.
(E) FURTHER ACTIONS. Subject to subparagraph (B)(5) of this Article XI,
nothing contained in this Article XI shall limit the authority of the Board of
Directors to take such other action to the extent permitted by law as it deems
necessary or advisable to protect the
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<PAGE>
corporation in preserving the Tax Benefits. Without limiting the generality of
the foregoing, in the event of a change in law (including applicable
regulations) making one or more of the following actions necessary or desirable
or in the event that the Board of Directors believes one or more of such actions
is in the best interest of the corporation, the Board of Directors may (1)
accelerate or extend the Expiration Date, (2) modify the definitions of any
terms set forth in this Article XI or (3) conform any provisions of Section (A)
of this Article XI to the extent necessary to make such provisions consistent
with the Code and Treasury Regulations following any changes therein; provided
that the Board of Directors shall determine in writing that such acceleration,
extension, change or modification is reasonably necessary or desirable to
preserve the Tax Benefits or that the continuation of these restrictions is no
longer reasonably necessary for the preservation of the Tax Benefits, which
determination may be based upon an opinion of legal counsel to the corporation
and which determination shall be filed with the Secretary of the corporation and
mailed by the Secretary to the stockholders of this corporation within ten (10)
days after the date of any such determination. In addition, the Board of
Directors may, to the extent permitted by law, from time to time establish,
modify, amend or rescind By-laws, regulations and procedures of the corporation
not inconsistent with the express provisions of this Article XI for purposes of
determining whether any acquisition of Stock would jeopardize the corporation's
ability to preserve and use the Tax Benefits, and for the orderly application,
administration and implementation of the provisions of this Article XI. Such
procedures and regulations shall be kept on file with the Secretary of the
corporation and with its transfer agent and shall be made available for
inspection by the public and, upon request, shall be mailed to any holder of
Stock. The Board of Directors of the corporation shall have the exclusive power
and authority to administer this Article XI and to exercise all rights and
powers specifically granted to the Board of Directors or the corporation, or as
may be necessary or advisable in the administration of this Article XI,
including without limitation, the right and power to (1) interpret the
provisions of this Article XI, and (2) make all calculations and determinations
deemed necessary or advisable for the administration of this Article XI. All
such actions, calculations, interpretations and determinations which are done or
made by the Board of Directors in good faith shall be final, conclusive and
binding on the corporation, the Agent, and all other parties.
(F) BENEFITS OF THIS ARTICLE XI. Nothing in this Article XI shall be
construed to give to any Person other than the corporation or the Agent any
legal or equitable right, remedy or claim under this Article XI. This Article
XI shall be for the sole and exclusive benefit of the corporation and the Agent.
(G) SEVERABILITY. If any provision of this Article XI or the
application of any such provision to any Person or under any circumstance shall
be held invalid, illegal, or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Article XI.
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<PAGE>
ANNEX B
RESTATED BY-LAWS OF PS GROUP HOLDINGS, INC.
TO BE IN EFFECT IMMEDIATELY
FOLLOWING THE REORGANIZATION
<PAGE>
RESTATED BY-LAWS OF
PS GROUP HOLDINGS, INC.
Table of Contents
-----------------
Page
----
ARTICLE I Offices C-1
ARTICLE II Meetings of Stockholders C-1
ARTICLE III Directors C-3
ARTICLE IV Officers C-7
ARTICLE V Seal C-9
ARTICLE VI Form of Stock Certificate C-9
ARTICLE VII Representation of Shares of
Other Corporations C-9
ARTICLE VIII Transfers of Stock C-9
ARTICLE IX Lost, Stolen or Destroyed
Certificates C-10
ARTICLE X Record Date C-10
ARTICLE XI Registered Stockholders C-10
ARTICLE XII Fiscal Year C-10
ARTICLE XIII Notices C-11
ARTICLE XIV Amendments C-11
ARTICLE XV Indemnification and Insurance C-11
(i)
<PAGE>
RESTATED BY-LAWS
OF
PS GROUP HOLDINGS, INC.
-----------------------
a Delaware corporation
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of this Corporation
-----------------
shall be in the City of Wilmington, County of New Castle, State of Delaware, and
the name of the resident agent in charge thereof is The Corporation Trust
Company.
SECTION 2. Other Offices. The Corporation may also have offices at such
-------------
other places, either within or without the State of Delaware, as the Board of
Directors (the "Board") may from time to time designate or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders shall be held at
-----------------
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual Meetings. Annual meetings of stockholders shall be
---------------
held on the fourth Tuesday of May, if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 10:00 a.m., or at such other
date and time set by the Board and stated in the notice of the meeting, at which
the stockholders shall elect a Board, and transact such other business as may
properly be brought before the meeting.
SECTION 3. Special Meetings. Special meetings of stockholders, for any
----------------
purpose or purposes, unless otherwise prescribed by applicable law or by the
Certificate of Incorporation, may be called by the Chairman of the Board (or, if
the Board does not appoint a Chairman of the Board, the Chief Executive Officer)
and shall be called by the Chairman of the Board (or, if the Board does not
appoint a Chairman of the Board, the Chief Executive Officer) or Secretary at
the request in writing of a majority of the Board, or if, and only if, the
special meeting is to be called for the purpose of removing a member of the
Board (a "Director") director or directors for cause, at the request in writing
of stockholders owning a majority in amount of the entire capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting and the business
transacted at any such special meeting of stockholders shall be limited to the
purposes set forth in the notice. Stockholders may not request the call of a
special meeting for any purpose other than as provided herein.
SECTION 4. Stockholder Lists. The officer who has charge of the stock
-----------------
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a
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<PAGE>
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for a period of
at least ten days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or at the place of the meeting, and the list shall also be available at
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 5. Notice of Meetings. Written notice of each meeting of
------------------
stockholders, whether annual or special, stating the place, date and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting.
SECTION 6. Quorum and Adjournment. The holders of a majority of the stock
----------------------
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for holding all meetings of
stockholders, except as otherwise provided by applicable law or by the
Certificate of Incorporation. If it shall appear that such quorum is not
present or represented at any meeting of stockholders, the Chairman of the
meeting shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. The Chairman of the meeting may determine
that a quorum is present based upon any reasonable evidence of the presence in
person or by proxy of stockholders holding a majority of the outstanding votes,
including without limitation, evidence from any record of stockholders who have
signed a register indicating their presence at the meeting.
SECTION 7. Voting. In all matters, the vote of the holders of a majority
------
of the capital stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which by express provision of applicable law or of the Certificate
of Incorporation, a different vote is required in which case such express
provision shall govern and control the decision of such question.
SECTION 8. Proxies. Each stockholder entitled to vote at a meeting of
-------
stockholders may authorize in writing or by any other means as is provided in
Section 212 of the Delaware General Corporation Law another person or persons to
act for him by proxy, but no proxy shall be voted or acted upon after eleven
months from its date, unless the person executing the proxy specifies therein
the period of time for which it is to continue in force.
SECTION 9. Judges of Election. The Board may appoint a Judge or Judges of
------------------
Election for any meeting of stockholders. Such Judges shall decide upon the
qualification of the voters and report the number of shares represented at the
meeting and entitled to vote, shall conduct the voting and accept the votes, and
when the voting is completed shall ascertain and report the number of shares
voted respectively for and against each position upon which a vote is taken by
ballot. The Judges need not be stockholders, and any officer of the Corporation
may be a Judge
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on any position other than a vote for or against a proposal in which he shall
have a material interest.
SECTION 10. Notice of Stockholder Business. At an annual meeting of the
------------------------------
stockholders, only such business shall be conducted as shall have been brought
before the meeting (a) by or at the direction of the Board or (b) by any
stockholder of the Corporation who complies with the notice procedures set forth
in this Section 10. For business to be properly brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation, not less than 30 days nor more than 60 days prior to
the meeting; provided, however, that in the event that less than 40 days' notice
or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of the stockholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the By-laws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 10. The Chairman of an
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with the
provisions of this Section 10, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
ARTICLE III
DIRECTORS
SECTION 1. Powers. The Board shall have the power to manage or direct the
------
management of the property, business and affairs of the Corporation, and except
as expressly limited by law, to exercise all of its corporate powers. The Board
may establish procedures and rules, or may authorize the Chairman of any meeting
of stockholders to establish procedures and rules, for the fair and orderly
conduct of any stockholders meeting, including without limitation, registration
of the stockholders attending the meeting, adoption of an agenda, establishing
the order of business at the meeting, recessing and adjourning the meeting for
the purposes of tabulating any votes and receiving the result thereof, the
timing of the opening and closing of the polls, and the physical layout of the
facilities for the meeting.
SECTION 2. Number. The Board shall consist of one or more members in such
------
number as shall be determined from time to time by resolution of the Board.
Until otherwise determined by such resolution, the Board shall consist of five
members. Directors need not be stockholders, and each Director shall serve
until his successor is elected and qualified or until his death, retirement,
resignation or removal.
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SECTION 3. Nominations. Nominations of candidates for election as
-----------
Directors of the Corporation may be made by the Board or by any stockholder
entitled to vote at a meeting at which one or more Directors are to be elected
(an "Election Meeting").
Nominations made by the Board shall be made at a meeting of the Board or by
written consent of Directors in lieu of a meeting, not less than thirty days
prior to the date of an Election Meeting. At the request of the Secretary of
the Corporation, each proposed nominee shall provide the Corporation with such
information concerning himself as is required, under the rules of the Securities
and Exchange Commission, to be included in the Corporation's proxy statement
soliciting proxies for his election as a Director.
Not less than thirty days prior to the date of an Election Meeting any
stockholder who intends to make a nomination at the Election Meeting shall
deliver a notice to the Secretary of the Corporation setting forth (i) the name,
age, business address, and residence address of each nominee proposed in such
notice, (ii) the principal occupation or employment of each such nominee, (iii)
the number of shares of capital stock of the Corporation which are beneficially
owned by each such nominee and (iv) such other information concerning each such
nominee as would be required, under the rules of the Securities and Exchange
Commission, in a proxy statement soliciting proxies for the election of such
nominees. Such notice shall include a signed consent to serve as a Director of
the Corporation, if elected, of each such nominee.
In the event that a person is validly designated as a nominee and shall
thereafter become unable or unwilling to stand for election to the Board, the
Board or the stockholder who proposed such nominee, as the case may be, may
designate a substitute nominee.
If the chairman of the Election Meeting determines that a nomination was
not made in accordance with the foregoing procedures, such nomination shall be
void.
SECTION 4. Class Division and Term. The Board shall be and is divided
-----------------------
into three classes, Class I, Class II, and Class III, which shall be as nearly
equal in number as possible. Each Director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
Director was elected; and until his successor shall have been elected and
qualified; provided, however, that each initial Director in Class I shall hold
office until the annual meeting of stockholders in 1997; each initial Director
in Class II shall hold office until the annual meeting of stockholders in 1998;
and each initial Director in Class III shall hold office until the annual
meeting of stockholders in 1999.
In the event of any increase or decrease in the authorized number of
Directors, (i) each Director then serving as such shall nevertheless continue as
a Director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation or removal, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board among the three classes of Directors
so as to maintain such classes as nearly equal as possible.
SECTION 5. Vacancies and Newly Created Directorships. Any vacancy in the
-----------------------------------------
Board caused by death, resignation, removal or otherwise, or through an increase
in the number of Directors of a class, shall be filled by a majority vote of the
remaining Directors of the class in which such vacancy occurs, or by the sole
remaining Director of that class if only one Director remains, or by the
majority vote of the remaining Directors of the other two classes if there be no
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remaining members of the class in which the vacancy occurs. A Director so
elected to fill a vacancy shall serve for the remainder of the then present term
of the office of the class to which he was elected.
SECTION 6. Initial Meeting. The Board shall meet as soon as practicable
---------------
after the annual election of Directors and notice of such first meeting shall
not be required.
SECTION 7. Regular Meeting. Regular meetings of the Board shall be held
---------------
without call or notice at such time and place as shall from time to time be
fixed by standing resolution of the Board.
SECTION 8. Special Meetings. Special meetings of the Board may be called
----------------
at any time, and for any purpose permitted by law, by the Chairman of the Board,
the Chief Executive Officer or by the Secretary on the request (whether written
or oral) of any two members of the Board, which meetings shall be held at the
time and place designated by the person or persons calling the meeting. Notice
of the time and place of any such meetings shall be given to the Directors by
the Secretary, or in case of his absence, refusal or inability to act, by any
other officer. Any such notice may be given by mail, by private express courier
service, by telegraph, by telecopier, by telephone, by personal service, or by
any thereof as to different Directors.
Notice to a Director by mail or by private express courier service shall be
deemed to have been given if addressed to such Director at the address shown
upon the records of the Corporation for such Director (or as may have been given
to the Corporation by such Director for purposes of notice) and deposited in a
United States Post Office or delivered to such private express courier service,
as the case may be, at least forty-eight hours before the time of the meeting.
Any other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted to the recipient by the person giving the
notice by electronic means. Oral notice shall be deemed to have been given at
the time it is communicated, in person or by telephone or wireless, to the
recipient or to a person at the office or home of the recipient who may
reasonably be expected to communicate the notice to the recipient.
A notice need not specify the purpose of any special meeting of the Board
of Directors. Whenever any Director has been absent from any meeting of the
Board of Directors for which notice has not been dispensed with, an entry in the
minutes of such meeting to the effect that notice has been duly given shall be
conclusive and incontrovertible evidence that due notice of such meeting was
given to such Director.
SECTION 9. Quorum. At all meetings of the Board a majority of the whole
------
Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the Board, except as
may be otherwise specifically provided by applicable law or by the Certificate
of Incorporation or by these By-laws. Any meeting of the Board may be adjourned
to meet again at a stated day and hour. Even though no quorum is present, as
required in this Section, a majority of the Directors present at any meeting of
the Board, either regular or special, may adjourn from time to time until a
quorum be had, but no later than the time fixed for the next regular meeting of
the Board. Notice of any adjourned meeting need not be given.
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SECTION 10. Fees and Compensation. Each Director and each member of a
---------------------
committee of the Board shall receive such fees and reimbursement of expenses
incurred on behalf of the Corporation or in attending meetings as the Board may
from time to time determine.
SECTION 11. Meetings by Telephonic Communication. Members of the Board or
------------------------------------
any committee thereof may participate in a regular or special meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, if the standing resolutions fixing the time and place of a regular
meeting or if the notice of the time and place of any regular or special meeting
provides for such participation. Participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
SECTION 12. Qualification of Directors. No person can be elected a
--------------------------
Director of this Corporation (whether by vote of the stockholders or the
Directors) if, were he or she to be elected a Director, less than a majority of
the total number of directors would be Outside Directors. If such a person is
nominated for Director, no votes cast for his or her election shall be counted
and, for this purpose, the announcement of the results of any election of
Directors, shall be delayed pending the determination by the Board referred to
below. An Outside Director is a person who is not: (a) an officer or employee
of the Corporation or any relative of an officer or employee; (b) a Related
Person (as that term is defined in Article X of the Corporation's Certificate of
Incorporation) or an officer, director, employee, associate or affiliate of a
Related Person, or a relative of any of the foregoing; or (c) a person having a
direct or indirect material business relationship with the Corporation. The
Board shall be empowered to determine in its sole and absolute discretion
whether a person is or is not an Outside Director within the meaning of the
foregoing.
SECTION 13. Committees. The Board may, by resolution passed by a majority
----------
of the whole Board, designate one or more committees, each committee to consist
of one or more of the Directors of the Corporation. The Board may designate one
or more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence
or disqualification of a member of a committee and if the Board has not
designated one or more alternates (or if such a designation has been made, in
the absence or disqualification of such alternate(s)), the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or disqualified
member or alternate. Any such committee, to the extent provided in the
resolution of the Board shall have and may exercise all the powers and authority
of the Board in the management of the business and affairs of the Corporation,
and may authorize the seal of the Corporation to be affixed to all papers which
may require it; but no such committee shall have the power or authority in
reference to amending the Certificate of Incorporation, adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-laws of the Corporation; and,
unless the resolution expressly so provides, no such committee shall have the
power or authority to declare a dividend or to authorize the issuance of stock.
SECTION 14. Action Without Meetings. Unless otherwise restricted by
-----------------------
applicable law or by the Certificate of Incorporation or by these By-laws, any
action required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without meeting if
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all members of the Board or of such committee consent thereto in writing as the
case may be, and the writing or writings are filed with the minutes of
proceedings of the Board or committee. Action shall be taken by the
stockholders only at annual or special meetings of stockholders and stockholders
may not act by written consent.
ARTICLE IV
OFFICERS
SECTION 1. Appointment and Salaries. The Board shall appoint the
------------------------
executive officers who shall include a Chief Executive Officer, one or more Vice
Presidents (one or more of whom may be designated as Executive Vice Presidents
or as Senior Vice Presidents), a Secretary, a Controller, and a Treasurer. The
Board may also appoint a Chairman of the Board and a President and the Board or
the Chief Executive Officer may appoint such other officers (including Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant
Controllers) as the Board or they may deem necessary or desirable. The Board
shall fix the salaries of all officers appointed by it. Unless prohibited by
applicable law or by the Certificate of Incorporation or by these By-laws, one
person may be elected or appointed to serve in more than one official capacity.
SECTION 2. Removal and Resignation. Any officer may be removed, either
-----------------------
with or without cause, by the Board or, in the case of an officer not appointed
by the Board by the Chief Executive Officer (or if the Board does not appoint a
Chief Executive Officer, the President). Any officer may resign at any time by
giving notice to the Board or to the Chief Executive Officer (or if the Board
does not appoint a Chief Executive Officer, the President), or to the Secretary
of the Corporation. Any such resignation shall take effect at the date of
receipt of such notice or at any later time specified therein; and, unless
otherwise specified in such notice, the acceptance of the resignation shall not
be necessary to make it effective.
SECTION 3. The Chairman of the Board. The Board may, at its election,
-------------------------
appoint a Chairman of the Board. If such an officer be elected, he shall, if
present, preside at all meetings of the stockholders and of the Board and shall
have such other powers and duties as may from time to time be assigned to him by
the Board.
SECTION 4. The Chief Executive Officer. Subject to such powers, if any,
---------------------------
as may be given by the Board to the Chairman of the Board, if there is such an
officer, the Chief Executive Officer shall be the chief executive officer of the
Corporation with the powers of general manager, and he shall have supervision
over and may exercise general executive powers concerning all of the operations
and business of the Corporation, with the authority from time to time to
delegate to other officers such executive and other powers and duties as he may
deem advisable. If there be no Chairman of the Board or if he is absent, the
Chief Executive Officer shall preside at all meetings of the stockholders and of
the Board, unless the Board appoints another person who need not be a
stockholder, officer or Director of the Corporation, to preside at a meeting of
stockholders.
SECTION 5. The Vice President. In the absence of the Chief Executive
------------------
Officer (or, if the Board does not appoint a Chief Executive Officer, the
President) or in the event of his inability or refusal to act, the Vice
President (or if there be more than one Vice President, the Vice
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Presidents in the order of their rank or, if of equal rank, then in the order
designated by the Board or the Chief Executive Officer (or, if the Board does
not appoint a Chief Executive Officer, the President) or, in the absence of any
designation, then in the order of their appointment) shall perform the duties of
the Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President) and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Chief Executive Officer (or, if the
Board does not appoint a Chief Executive Officer, the President). The rank of
Vice Presidents in descending order shall be Executive Vice President, Senior
Vice President, Vice President, and Assistant Vice President. The Vice
President shall perform such other duties and have such other powers as the
Board may from time to time prescribe.
SECTION 6. The Secretary. The Secretary shall attend all meetings of the
-------------
Board and all meetings of the stockholders and record all the proceedings of the
meetings of the Corporation and of the Board in a book to be kept for that
purpose and shall perform like duties for the committees when required. He
shall give, or cause to be given, notice of all meetings of stockholders and
special meetings of the Board. He shall have custody of the corporate seal of
the Corporation and he, or an Assistant Secretary, shall have authority to affix
the same to any instrument requiring it and when so affixed, it may be attested
by his signature or by the signature of such Assistant Secretary. The Board may
give general authority to any other officer to affix the seal of the Corporation
and to attest the affixing by his signature. The Secretary shall perform such
other duties and have such other powers as the Board or the Chief Executive
Officer (or, if the Board does not appoint a Chief Executive Officer, the
President) may from time to time prescribe.
SECTION 7. The Treasurer and the Controller. The Treasurer and the
--------------------------------
Controller shall each have custody of the corporate funds and securities and
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board. Either the Treasurer or the Controller may
disburse the funds of the Corporation as may be ordered by the Board or the
Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President), taking proper vouchers for such disbursements, and
shall render to the Board and Chief Executive Officer (or, if the Board does not
appoint a Chief Executive Officer, the President) an account of transactions and
of the financial condition of the Corporation. The Treasurer and the Controller
each shall perform such other duties and have such other powers as the Board or
the Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President) may from time to time prescribe.
SECTION 8. Assistant Officers. An Assistant Officer shall, in the absence
------------------
of the officer to whom he is an assistant or in the event of such officers
inability or refusal to act (or, if there be more than one such assistant
officer, the assistant officers in the order designated by the Board or the
Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President) or, in the absence of any designation then in the order
of their appointment), perform the duties and exercise the powers of such
officer. An Assistant Officer shall perform such other duties and have such
other powers as the Board or the Chief Executive Officer (or, if the Board does
not appoint a Chief Executive Officer, the President) may from time to time
prescribe.
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ARTICLE V
SEAL
It shall not be necessary to the validity of any instrument executed by any
authorized officer or officers of the Corporation, that the execution of such
instrument be evidenced by the corporate seal, and all documents, instruments,
contracts, and writings of all kinds signed on behalf of the Corporation by any
authorized officer or officers thereof shall be as effectual and binding on the
Corporation without the corporate seal, as if the execution of the same had been
evidenced by affixing the corporate seal thereto.
ARTICLE VI
FORM OF STOCK CERTIFICATE
Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of, the Corporation by the Chief Executive
Officer or a Vice President, and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation. Any or all of the signatures
on the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of the issue.
ARTICLE VII
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chief Executive Officer or any other officer or officers authorized by
the Board or the Chief Executive Officer are each authorized to vote, represent,
and exercise on behalf of the Corporation all rights incident to any and all
shares of any other corporation or corporations standing in the name of the
Corporation. The authority herein granted may be exercised either by any such
officer in person or by any other person authorized so to do by proxy or power
of attorney duly executed by said officer.
ARTICLE VIII
TRANSFERS OF STOCK
Subject to any provisions relating to restrictions on transfer of the
Corporation's shares contained in, or adopted pursuant to, these By-laws or the
Certificate of Incorporation, upon surrender to the Corporation or a transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate, and record the
transaction upon its books.
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ARTICLE IX
LOST, STOLEN OR DESTROYED CERTIFICATES
The Board may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of the fact by the person claiming the certificate of stock to be lost, stolen
or destroyed. When authorizing such issue of a new certificate or certificates,
the Board may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
ARTICLE X
RECORD DATE
The Board may fix in advance a date, which shall not be more than sixty
days nor less than ten days preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, as a record date for the determination of stockholders
entitled to notice of, and to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such change,
conversion or exchange of capital stock, and in such case such stockholders, and
only such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, as the case may be, not
withstanding any transfer of any stock on the books of the Corporation after any
such record date fixed as aforesaid.
ARTICLE XI
REGISTERED STOCKHOLDERS
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not it shall have express or
other notice thereof, save as expressly provided by applicable law.
ARTICLE XII
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the
Board.
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ARTICLE XIII
NOTICES
SECTION 1. Manner of Notice. Whenever under the provisions of the
----------------
statutes or of the Certificate of Incorporation or of these By-laws notice is
required to be given to any Director, committee member, officer or stockholder,
it shall not be construed to mean personal notice, but such notice may be given,
in the case of stockholders, in writing, by mail, by depositing the same in the
post office or letterbox, in a postpaid sealed wrapper, addressed to such
stockholder, at such address as appears on the books of the Corporation, or, in
default of other address, to such stockholder at the General Post Office in the
City of Wilmington, Delaware, and, in the case of Directors, committee members
and officers, by telephone, or by mail or by telegram to the last business
address known to the Secretary of the Corporation, and such notice shall be
deemed to be given at the time when the same shall be thus mailed or telegraphed
or telephoned.
SECTION 2. Waiver of Notice. Whenever any notice is required to be given
----------------
under the provisions of the statutes or of the Certificate of Incorporation or
of these By-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE XIV
AMENDMENTS
The Board shall have the power to make, adopt, alter, amend and repeal from
time to time By-laws of this Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to adopt, alter, amend, and
repeal By-laws made by the Board; provided, however, that By-laws shall not be
adopted, altered, amended or repealed by the stockholders of the Corporation,
except by the vote of the holders of not less than sixty-six and two-thirds
percent (66-2/3%) of the outstanding shares of Common Stock.
ARTICLE XV
INDEMNIFICATION AND INSURANCE
SECTION 1. Right to Indemnification. Each person who was or is a party or
------------------------
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a Director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
or inaction in an official capacity or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent permitted by the laws of Delaware, as the
same exist or may hereafter be amended, against all costs, charges, expenses,
liabilities and losses (including attorneys' fees, judgements, fines, ERISA
excise taxes or penalties and amounts paid or to be
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paid in settlement) reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in Section 2 hereof, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Article
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director of officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of its Board, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
SECTION 2. Right of Claimant to Bring Suit. If a claim under Section 1 of
-------------------------------
this Article is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has failed to meet a standard of conduct which
makes it permissible under Delaware law for the Corporation to indemnify the
claimant for the amount claimed. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is permissible in the circumstances
because he or she has met such standard of conduct, nor an actual determination
by the Corporation (including its Board, independent legal counsel, or its
stockholders) that the claimant has not met such standard of conduct, shall be a
defense to the action or create a presumption that the claimant has failed to
meet such standard of conduct.
SECTION 3. Non-Exclusivity of Rights. The right to indemnification and
-------------------------
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 4. Insurance. The Corporation may maintain insurance, at its
---------
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability, loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under Delaware law.
B-12
<PAGE>
SECTION 5. Expenses as a Witness. To the extent that any director,
---------------------
officer, employee or agent of the Corporation is by reason of such position, or
a position with another entity at the request of the Corporation, a witness in
any action, suit or proceeding, he shall be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.
SECTION 6. Indemnity Agreements. The Corporation may enter into
--------------------
agreements with any director, officer, employee or agent of the Corporation
providing for indemnification to the full extent permitted by Delaware law.
B-13
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
PS GROUP, INC.
(formerly PSA, INC.)
and
CHEMICAL BANK
Rights Agent
(successor Rights Agent to BANK OF AMERICA, N.T. & S.A.)
Amended and Restated Rights Agreement
Dated as of June 30, 1986
- --------------------------------------------------------------------------------
1
<PAGE>
RIGHTS AGREEMENT
----------------
Agreement, dated as of June 30, 1986, between PS Group, Inc. (formerly PSA,
Inc.), a Delaware corporation (the "Company"), and Chemical Bank (as successor
Rights Agent to Bank of America, N.T. & S.A., the "Rights Agent"), as amended on
December 6, 1986, September 15, 1988, September 16, 1990, December 14, 1990 and
January 31, 1996 and hereby restated to reflect cumulatively such amendments.
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding on July 10, 1986, each Right
representing the right to purchase one one-hundredth of a share of Series D
Junior Participating Preferred Stock, par value $1.00 per share, of the Company
having the rights and preferences set forth in the form of Certificate of
Designations attached hereto as Exhibit A, upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between July 10, 1986 and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
2
<PAGE>
Section 1. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 20% or more
of the Common Shares then outstanding, but shall not include the Company,
any Subsidiary (as such term is hereinafter defined) of the Company or any
employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares for or pursuant to the terms of any such
plan. The term "Acquiring Person" shall not mean Warren Buffett or
Berkshire Hathaway Inc. ("Berkshire") or their respective Affiliates, so
long as Mr. Buffett and Berkshire and such Affiliates are Beneficial Owners
of less than 45% of the Common Shares. In determining whether any officer
of Berkshire or of any of its Affiliates (other than Mr. Buffett or another
officer, if any, who is an Affiliate of Berkshire or any of its Affiliates)
is an "Acquiring Person", or in determining for purposes of Section 1(c)
the number of Common Shares of which such an officer is the "Beneficial
Owner" or which such an officer may "beneficially own", Common Shares of
which Mr. Buffett, Berkshire or any Affiliate thereof is the "Beneficial
Owner" as defined herein shall be disregarded. In
3
<PAGE>
determining whether Mr. Buffett or Berkshire or their respective Affiliates
is an "Acquiring Person", or in determining, for purposes of Section 1(c),
the number of Common Shares of which Mr. Buffett, Berkshire or their
respective Affiliates is the "Beneficial Owner" or which Mr. Buffett,
Berkshire or their respective Affiliates may "beneficially own", Common
Shares of which an Associate of Mr. Buffett, Berkshire or their respective
Affiliates that is not also an Affiliate of Mr. Buffett, Berkshire or their
respective Affiliates is the "Beneficial Owner" shall be disregarded. The
provisions of the following sentence shall be applicable to Mr. Buffett,
Berkshire and their respective Affiliates with "45%" substituted for "20%"
in the places where the expression "20%" appears in such sentence. No
Person shall become an "Acquiring Person" as the result of an acquisition
of Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares then outstanding;
provided, however, that if a Person shall become the beneficial owner of
--------
20% or more of the Common Shares then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, either (i) become the Beneficial Owner (as a result of actions
taken by such Person or its Affiliates or Associates) of additional Common
Shares constituting 1%
4
<PAGE>
or more of the then outstanding Common Shares, or (ii) engage in or propose
to engage in one or more of the transactions enumerated in Clauses (1)
through (5) of Subsection (A) of Section 11(a)(ii) hereof, then such person
shall be deemed to be an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on June 30, 1986.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a Person
-------- -------
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange
5
<PAGE>
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; or (B) the right to vote pursuant to any
agreement, arrangement or understanding, except where such right to
vote is limited to the approval of the merger of a Subsidiary of the
Company with another person; provided, however, that a Person shall
-------- -------
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (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
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section l(c)(ii)(B)) or
disposing of any securities of the Company.
6
<PAGE>
(d) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
-------- -------
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of Common Stock, par value $1.00 per share, of the Company.
"Common Shares" 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 other Person or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
7
<PAGE>
(j) "Preferred Shares" shall mean shares of Series D Junior
Participating Preferred Stock, par value $1.00 per share, of the Company.
(k) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(l) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(m) "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 interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
---------------------------
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
---------------------------
tenth day after the Shares Acquisition Date or (ii) the tenth day after the date
of the commencement of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the Company,
8
<PAGE>
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would result
in beneficial ownership by a Person of 30% or more of the outstanding Common
Shares, unless such date is extended by the Board of Directors of the Company
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights; the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
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 Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
9
<PAGE>
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On July 10, 1986 or as soon as practicable thereafter, the Company will
send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by first-
class, postage-prepaid mail, to each record holder of Common Shares as of the
close of business on July 10, 1986, at the address of such holder shown on the
records of the Company. With respect to certificates for Common Shares
outstanding as of July 10, 1986, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on July 10, 1986, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after July 10, 1986 but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
10
<PAGE>
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between PSA, Inc.
and Bank of America, N.T. & S.A., dated as of June 30, 1986 (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 PSA, Inc. 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.
PSA, Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, Rights beneficially owned by
Acquiring Persons (as defined in the Rights Agreement) may become null
and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after July
10, 1986 but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
--------------------------
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such
11
<PAGE>
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as shall be set forth therein at the price per one one-
hundredth of a Preferred Share set forth therein (the "Purchase Price"), but the
number of such one one-hundredths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
---------------------------------
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary 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
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
12
<PAGE>
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.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal offices, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
- ---------------------------------------------------------------------
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
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 one one-hundredths of a
13
<PAGE>
Preferred Share 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 or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal offices of the Rights Agent or its office
in New York, New York. Thereupon the Rights Agent shall 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 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.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of 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 delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
14
<PAGE>
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
----------------------------------- -------------------------
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal offices of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a Preferred Share as
to which the Rights are exercised, at or prior to the earlier of (i) the close
of business on July 10, 1996 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date").
(b) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $100, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares 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 hereof in cash, or by certified check
or cashier's check payable to the order of the
15
<PAGE>
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
16
<PAGE>
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
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, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares. The Company
------------------------------------------------
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
17
<PAGE>
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares 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 Shares Record Date. Each person in whose name any
----------------------------
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed
18
<PAGE>
to have become the holder of record of the Preferred Shares 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
Preferred Shares transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred 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 of Preferred Shares covered by each
- ------
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide
19
<PAGE>
the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of 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 which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), 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
(A) any Person shall become an Acquiring Person [except pursuant
to a tender or exchange
20
<PAGE>
offer for all outstanding Common Shares at a price and on terms
determined by at least a majority of the members of the Board of
Directors who are not officers of the Company to be both adequate and
otherwise in the best interests of the Company and its shareholders
(other than the Person or an Affiliate or Associate thereof on whose
behalf the offer is made) (a "Permitted Offer")], or any Acquiring
Person or any Associate or Affiliate of any Acquiring Person, at any
time after the date of this Agreement, directly or indirectly, (1)
except upon terms disclosed in a Permitted Offer, shall merge into the
Company or otherwise combine with the Company and the Company shall be
the continuing or surviving corporation of such merger or combination
and the Common Shares of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of any other
Person or the Company or cash or any other property, (2) shall, in one
or more transactions, other than in connection with the exercise of
Rights or the exercise or conversion of securities exchangeable for or
convertible into capital stock of the Company or any of its
Subsidiaries, transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class
of capital stock of the Company or any of its Subsidiaries or
21
<PAGE>
for securities exercisable for or convertible into shares of any class
of capital stock of the Company or any of its Subsidiaries or
otherwise obtain from the Company or any of its Subsidiaries, with or
without consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or securities
exercisable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries (other than as part of
a pro rata distribution to all holders of such shares of any class of
capital stock of the Company or any of its Subsidiaries), (3) shall
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose (in one or more transactions), to, from, with or of,
as the case may be, the Company or any of its Subsidiaries, assets
(including securities) on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, (4) shall receive any
compensation from the Company or any of its Subsidiaries other than
compensation at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (5) shall receive the benefit,
directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guarantees, pledges or other financial assistance
or any tax
22
<PAGE>
credits or other tax advantage provided by the Company or any of its
Subsidiaries, or
(B) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any
Subsidiaries of the Company (whether or not with or into or otherwise
involving an Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into securities of the
Company or any of its Subsidiaries which is directly or indirectly
owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person,
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the terms of this Agreement, in lieu of
Preferred Shares, such number of Common Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of one
one-hundredths of a
23
<PAGE>
Preferred Share for which a Right is then exercisable and dividing that product
by (y) 50% of the then current per share market price of the Common Shares
(determined pursuant to Section 11(d)) on the fifth day after the earlier of the
date of the occurrence or the date of the first public announcement of any one
of the events listed above in this Section 11(a)(ii); provided, however, that if
-------- -------
the transaction that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence of any of
the events listed above in this Section 11(a)(ii), any Rights that are or were
on or after the earlier of the Distribution Date or the Shares Acquisition Date
beneficially owned by an Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall become void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. The Company shall not enter into any transaction of the kind listed
in this Section 11(a)(ii) if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. Any Right Certificate issued pursuant to Section 3
hereof that represents Rights beneficially owned by an
24
<PAGE>
Acquiring Person or any Associate or Affiliate thereof and any Right Certificate
issued at any time upon the transfer of any Rights to an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate, and any Right Certificate issued pursuant to Section 6,
7(d) or 22 hereof or this Section 11 upon transfer, exchange, replacement or
adjustment by any other Right Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Right Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby
may become void in the circumstances specified in Section 11(a)(ii) of
the Rights Agreement;
provided that the Rights Agent shall not be under any responsibility to
- -------- ----
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Right Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
(iii) In the event that there shall not be sufficient issued but not
outstanding, or authorized but unissued, Common Shares to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii), the Company shall take
all such action as may be necessary to authorize
25
<PAGE>
additional Common Shares for issuance upon exercise of the Rights.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or
26
<PAGE>
equivalent preferred shares 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.
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) 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
then current per
27
<PAGE>
share market price of the Preferred Shares (as defined in 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) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares on any date shall be deemed to be
the average of the daily closing prices per share of such Common Shares for the
30 consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current per
-------- -------
share market price of the Common Shares is determined during a period following
the announcement by the issuer of such Common Shares of (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares, or (B) any subdivision, combination or
reclassification of such Common Shares and prior to the
28
<PAGE>
expiration of 30 Trading Days 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 reflect the current market price per
Common Share equivalent. 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 Common Shares 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 Common Shares are listed or admitted to trading or, if the Common
Shares 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 Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the Common
Shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Shares selected by the Board of Directors of the
29
<PAGE>
Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in Section 11(d)(i). If the current
per share market price of the Preferred Shares cannot be determined in the
manner provided above, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be the current per share market price of
the Common Shares (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the Common Shares nor the Preferred Shares are publicly
held or 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.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
-------- -------
11(e) are not required to be made shall be carried forward and
30
<PAGE>
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one-millionth of a Preferred Share as the case
may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon
31
<PAGE>
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share 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-hundredths of a Preferred Share 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
32
<PAGE>
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record
33
<PAGE>
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-hundredths of a Preferred Share 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-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares 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
34
<PAGE>
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 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 it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common
35
<PAGE>
Shares, then in any such case (i) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected. If an event occurs
which would require an adjustment under Section 11(a)(ii) and this Section
11(n), the adjustments provided for in this Section 11(n) shall be in addition
and prior to any adjustment required pursuant to Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of
---------------------------------------------------
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
- ------
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a
36
<PAGE>
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power. In the event, directly or indirectly, (a) the Company shall
- -------------
consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more 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 other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement, such number of Common Shares of
such other Person (including the Company as successor thereto or as the
surviving corporation) as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by
37
<PAGE>
the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii) hereof) and dividing that product by (y) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights. The Company shall not consummate any such consolidation, merger, sale
or
38
<PAGE>
transfer unless prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. This Section 13 shall not be
applicable to a transaction described in Subparagraphs (a) or (b) of this
Section if (i) such transaction is consummated with a Person or Persons who
acquired Common Shares pursuant to a Permitted Offer (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per Common Share
offered in such transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant to such
Permitted Offer and (iii) the form of consideration being offered to the
remaining holders of Common Shares pursuant to such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any transaction described in the foregoing sentence, all Rights
shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The
---------------------------------------
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right.
39
<PAGE>
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
40
<PAGE>
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 Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall 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 Preferred Share. For purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of
41
<PAGE>
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
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
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive
42
<PAGE>
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 Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal offices of the Rights Agent or at its office in New York, New
York, duly endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
-------------------------------------------------
holder, as such, of any Right Certificate
43
<PAGE>
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 24 hereof),
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. The Company agrees to pay to the
---------------------------
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and
44
<PAGE>
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement, in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions
45
<PAGE>
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the 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.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of
46
<PAGE>
which the Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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
47
<PAGE>
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13 or 23, 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 Preferred Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed,
48
<PAGE>
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 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 shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
49
<PAGE>
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.
Section 21. Change of Rights Agent. The Rights Agent or any
----------------------
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
50
<PAGE>
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of New York (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having an office in the
State of New York, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of
51
<PAGE>
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.
Section 23. Redemption. (a) The Board of Directors of the Company may,
----------
at its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.05 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").
(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 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the holders of
52
<PAGE>
the then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption 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 other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 24. Notice of Certain Events. In case the Company shall propose
------------------------
(a) to pay any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend) or (b) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), or (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of
53
<PAGE>
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 (e) to effect the
liquidation, dissolution or winding up of the Company, or (f) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, 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 Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Preferred Shares for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
54
<PAGE>
In case any of the events set forth in Section 11(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any 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:
PS Group, Inc.
4370 La Jolla Village Drive, Suite 1050
San Diego, California 92122
Attention: Secretary
Subject to the provisions of Section 21 hereof, 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:
Chemical Bank
c/o Chemical Mellon Shareholder Services
300 South Grand Avenue, 4th Floor
Los Angeles, California 90071
Attention: Stock Transfer
Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any
55
<PAGE>
Right Certificate shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder,
as shown on the registry books of the Company.
Section 26. Supplements and Amendments. The Company and the Rights Agent
--------------------------
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder, which the Company and the Rights Agent
may deem necessary or desirable, including but not limited to extending the
Final Expiration Date and, provided that at the time of such amendment there is
no Acquiring Person, the period of time during which the Rights may be redeemed,
and which shall not adversely affect the interests of the holders of Right
Certificates.
Section 27. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. 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 Common Shares) any legal or
56
<PAGE>
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 Common Shares).
Section 29. 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.
Section 30. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 31. 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 32. 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.
57
<PAGE>
Section 33. Effect of Reorganization Agreement. It is hereby agreed and
----------------------------------
acknowledged that none of the execution and delivery of, the announcement of, or
the consummation of any of, the transactions contemplated by the Agreement and
Plan of Reorganization and Merger dated as of January 31, 1996, (the
"Reorganization Agreement") by and among the Company, PS Group Holdings, Inc., a
Delaware corporation which is currently a wholly-owned subsidiary of the Company
("Holdings"), and PSG Merger Subsidiary, Inc., a Delaware corporation which is
currently a subsidiary of Holdings: (i) is prohibited by this Agreement; (ii)
will result in any Person becoming an Acquiring Person; (iii) will result in the
occurrence of a Distribution Date or a Shares Acquisition Date; (iv) will result
in an adjustment to the Purchase Price or other adjustment under Section 11; or
(v) will require any notice to be given pursuant to this Agreement to the
holders of Rights Certificates. In addition, the provisions of Section 13 shall
not apply to the execution and delivery of, the announcement of, or the
consummation of any of, the transactions contemplated by such Reorganization
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
58
<PAGE>
Attest: PS GROUP, INC.
By /s/ Lawrence Guske By /s/ Charles E. Rickershauser, Jr.
------------------- ----------------------------------
Lawrence Guske Charles E. Rickershauser, Jr.
Vice President- Finance and Chairman of the Board and
Chief Financial Officer Chief Executive Officer
Attest: CHEMICAL BANK
By /s/ Florence Curley By /s/ Eric Leason
------------------------ -------------------------
Assistant Vice President Vice President
59
<PAGE>
Exhibit A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES D JUNIOR PARTICIPATING PREFERRED STOCK
of
PSA, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
______________________________
PSA, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the Delaware General
Corporation Law at a meeting duly called and held on June 30, 1986:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in accordance with the provisions of the Restated Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series D Junior Participating Preferred Stock:
I. Designation and Amount
----------------------
The shares of such series shall be designated as "Series D Junior
Participating Preferred Stock" (the "Junior Preferred Stock") and the number of
shares constituting the Junior Preferred Stock shall be 90,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Junior Preferred
- --------
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Junior Preferred Stock.
60
<PAGE>
II. Dividends and Distributions
---------------------------
A. Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock or any similar stock ranking prior
and superior to the Junior Preferred Stock with respect to dividends, the
holders of shares of Junior Preferred Stock, in preference to the holders
of Common Stock, par value $1.00 per share (the "Common Stock"), of the
Corporation, and of any other junior 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 March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$10 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Junior Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
B. The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or
61
<PAGE>
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 $10 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
C. Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Junior Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
III. Voting Rights
-------------
The holders of shares of Junior Preferred Stock shall have the following
voting rights:
A. Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a
62
<PAGE>
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, in any other Certificate of
Designations, creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
C. Except as set forth herein, holders of Junior Preferred Stock
shall have no voting rights.
IV. Certain Restrictions
--------------------
A. Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Junior Preferred
Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Junior Preferred Stock; or
63
<PAGE>
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock ranking
on a parity with the Junior Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
B. The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section IV purchase or otherwise acquire such shares at such time and in
such manner.
V. Reacquired Shares
-----------------
Any shares of Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated Certificate of
Incorporation, in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
--------------------------------------
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Junior
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total
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<PAGE>
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VII. 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 each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VIII. Redemption
----------
The shares of Junior Preferred Stock shall not be redeemable.
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<PAGE>
IX. Rank
----
The Junior Preferred Stock shall rank junior with respect to the payment of
dividends and the distribution of assets to all series of any class of the
Corporation's Preferred Stock or any similar stock that specifically provide
that they shall rank prior to the Junior Preferred Stock. Nothing herein shall
preclude the Board from creating any series of Preferred Stock or any similar
stock ranking on a parity with or prior to the Junior Preferred Stock as to the
payment of dividends or the distribution of assets.
X. Amendment
---------
The Restated Certificate of Incorporation of the Corporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Junior Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Junior Preferred Stock, voting together as a single
series.
IN WITNESS WHEREOF, this Certificate of Designation, Preferences and
Rights is executed on behalf of the Corporation by its Chairman of the Board and
attested by its Secretary this ____ day of July, 1986.
________________________________
Chairman of the Board
Attest:
______________________________
Secretary
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<PAGE>
Exhibit B
---------
Form of Right Certificate
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER JULY 10, 1996 OR EARLIER
IF REDEMPTION OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.05 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SECTION 11(a)(ii)
OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE
WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON
OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT).] THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF
THE RIGHTS AGREEMENT.)/*/
Right Certificate
PS Group, Inc. (formerly PSA 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
Amended and Restated Rights Agreement, dated as of June 30, 1986 (the "Rights
Agreement"), between PS Group, Inc. (formerly PSA, Inc.), a Delaware corporation
(the "Company"), and Chemical Bank (as Successor Rights Agent to Bank of
America, N.T. &
- ---------------
/*/ The portion of the legend in brackets shall be inserted only if applicable.
67
<PAGE>
S.A., the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., New York City time, on July 10, 1996 at the principal offices of the
Rights Agent, or at the office of its successor as Rights Agent, one one-
hundredth of a fully paid non-assessable share of Series D Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Shares"), of the
Company, at a purchase price of $100 per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredths
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of July 10, 1986, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
one one-hundredths of a Preferred Share which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
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
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<PAGE>
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 principal offices of the Rights Agent or at its office in New
York, New York, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may, but are not required to, be redeemed by the Company at a
redemption price of $.05 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company,
69
<PAGE>
be evidenced by depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (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.
70
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ____________, 19__.
ATTEST: PS Group, Inc.
By_________________________ By_________________________
Secretary
Countersigned:
CHEMICAL BANK
By__________________________
Authorized Signature
71
<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 Certificate.)
FOR VALUE RECEIVED _______________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does 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:____________________________ 19__
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered 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.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
- --------------------------------------------------------------------------------
72
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To: PS Group, Inc. (formerly PSA, Inc.)
The undersigned hereby irrevocably elects to exercise
___________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ___________________, 19__
________________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered 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.
73
<PAGE>
Form of Reverse Side of Right Certificate -- continued
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_________________________________________________
Signature
- --------------------------------------------------------------------------------
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Forms of Assignment
and Election is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.
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<PAGE>
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 30, 1986, the Board of Directors of PSA, Inc. (the "Company")
declared a dividend of one preferred share purchase right (a "Right") for each
outstanding share of Common Stock, par value $1.00 per share (the "Common
Shares"), of the Company. The dividend is payable on July 10, 1986 to the
shareholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series D Junior
Participating Preferred Stock, par value $1.00 per share (the "Preferred
Shares"), of the Company, at a price of $100 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Bank of America, N.T. & S.A., as Rights
Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of 20%
or more of the outstanding Common Shares or (ii) 10 days following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 30% or more of such outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of July 10, 1986, by such Common Share certificate with a copy of
this Summary of Rights attached thereto. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after July 10,
1986 upon transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Shares, outstanding as of July 10, 1986, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
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<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 10, 1996 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its
76
<PAGE>
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that the Company is the surviving corporation in a merger
and the Common Shares are not changed or exchanged, or in the event that an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement, proper provision will be made so that each
holder of a Right, other than Rights that are beneficially owned by the
Acquiring Person on or after the earlier of the Distribution Date or the date an
Acquiring Person acquires 20% or more of the outstanding Common Shares (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
then current exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.05 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to extend the Final Expiration Date, and, provided there is no Acquiring Person,
to extend the period during which the Rights may be redeemed, except that no
such amendment may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
77
<PAGE>
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
July 3, 1986. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
78
<PAGE>
EXHIBIT 99.1
-----------------------
N E W S R E L E A S E
-----------------------
[LOGO OF PS GROUP INC.
APPEARS HERE]
FOR IMMEDIATE RELEASE
- ---------------------
PS GROUP, INC. TO SEEK SHAREHOLDER APPROVAL
OF HOLDING COMPANY REORGANIZATION
---------------
Purpose is to Impose Share Transfer Restrictions
to Help Preserve Substantial Tax Benefits
SAN DIEGO, CA, FEBRUARY 9, 1996 -- PS Group, Inc. (NYSE Symbol: PSG)
announced today that its Board of Directors has decided to seek shareholder
approval of a holding company reorganization that will result in the company
becoming a wholly-owned subsidiary of a new NYSE-listed Delaware corporation
called PS Group Holdings, Inc.
The sole purpose of the proposed reorganization is to help preserve PS
Group's substantial net operating loss and investment tax credit carryforwards
and other tax benefits for use in offsetting future taxable income by decreasing
the risk of an "ownership change" for federal income tax purposes. This will be
accomplished by imposing certain restrictions on the transfer of the new holding
company's stock. These restrictions will be similar to those imposed by several
other public companies for the purpose of preserving their tax benefits against
an "ownership change."
As previously reported, certain federal income tax regulations could
severely limit future usage of PS Group's tax carryforwards and credits. These
limitations would apply if there were an "ownership change," as defined by the
applicable regulations, over any three-year period. The "ownership change"
calculation, which is complex, is heavily influenced by changes in shares held
by owners of 5% or more of PS Group stock. While an "ownership change" has not
occurred (estimated cumulative change is in excess of 30% as of December 31,
1995), there is a risk that future changes, primarily involving present or
future holders of 5% or more of PS Group's shares, could result in an "ownership
change" as calculated for federal income tax purposes.
Generally, PS Group has no control over purchases or sales by investors who
acquire 5% or more of PS Group's shares. However, the reorganization is being
proposed to reduce the risk of an "ownership change" occurring by restricting
transfers that would be taken into consideration in making the relevant
calculation.
In general, and subject to an exemption for certain dispositions of shares
by presently-existing 5% shareholders of PS Group, if the proposed
reorganization is consummated, the transfer restrictions will prohibit, without
prior approval of the board of directors of the new holding company, the direct
or indirect disposition or acquisition of any stock of the holding company by or
to any holder who owns (either directly or through the tax attribution rules) 5%
or more of the holding company's stock or would do so upon the disposition or
acquisition.
<PAGE>
These restrictions will be intended to bind all holders of shares of PS
Group common stock outstanding at the effective time of the proposed
reorganization and will apply both to shares of common stock of the new holding
company issued in exchange for those shares of PS Group outstanding at such
effective time and to shares of common stock of the new holding company issued
subsequently.
Transfers of shares of PS Group common stock occurring prior to the
effective time of the proposed reorganization will not be restricted and all
holders of PS Group common stock as of such effective time will receive shares
of the new holding company in exchange for their PS Group shares. However,
subsequent dispositions of those holding company shares will be subject to the
transfer restrictions. Accordingly, if the proposed reorganization is
consummated, persons who become "5% shareholders" of PS Group for purposes of
the applicable federal income tax regulations on or after February 9, 1996 and
prior to the consummation of the proposed reorganization will be prohibited from
disposing of their shares in the new holding company while the transfer
restrictions are in effect unless the express consent of the board of directors
of the new holding company is obtained.
In contrast, the restriction on disposition of shares of the new holding
company will not apply to certain dispositions of shares by "preexisting 5%
shareholders." This term will include specified persons who, prior to February
9, 1996, have made SEC filings reporting their ownership of 5% or more of PS
Group common stock. It will also include any person not presently known to PS
Group as a 5% shareholder who establishes to the satisfaction of the new holding
company's board that such person was a direct or indirect owner of 5% or more of
PS Group common stock (for purposes of the applicable federal income tax
regulations) on February 8, 1996. These "preexisting 5% shareholders" will be
permitted to transfer those shares of the new holding company that were issued
in the proposed reorganization in exchange for the shares of PS Group they owned
on February 8, 1996 provided, in general, such transfers do not result in a new
holder of 5% of the stock or increase the ownership percentage of an existing
holder of 5%. In addition, transfers of interests in entities (such as
Berkshire Hathaway Inc. and ESL Partners, L.P.) that are preexisting 5%
shareholders (as distinct from transfers of shares of the new holding company
owned by such entities) will not be restricted.
The extent of the actual future utilization of PS Group's tax benefits is
subject to inherent uncertainty inasmuch as the utilization depends on the
amount of otherwise-taxable income against which PS Group will be able to
utilize the tax benefits in future years. Accordingly, even though the proposed
reorganization, if consummated, will reduce the risk that an "ownership change"
will occur that could limit PS Group's ability to use the tax benefits, there
can be no assurance that PS Group will have sufficient taxable income in future
years to actually use the tax benefits before they would otherwise expire.
Nevertheless, if the proposed reorganization is consummated, the transfer
restrictions on the shares of the new holding company will remain in effect for
at least fifteen years unless the new company's board determines that they are
no longer needed to preserve the company's tax benefits.
The proposed reorganization will be submitted for approval at the 1996
Annual Meeting of Stockholders of PS Group, expected to be held in May. Prior
to the Annual Meeting, shareholders will receive a proxy statement that will
also constitute the prospectus of the new holding company covering the shares to
be issued in the proposed reorganization. The proposed reorganization will
require the approval of a majority of the shares of PS Group common stock
outstanding on the record date to be fixed for the Annual Meeting. No appraisal
rights will be available in connection with the transaction.
<PAGE>
If the proposed reorganization is consummated, each common share of PS
Group will be converted on a tax-free basis into the right to receive one common
share of the new holding company and outstanding stock options will be
correspondingly adjusted. Except for the transfer restrictions, the new shares
will have substantially identical terms to the old shares and the transaction is
conditioned on such shares being listed on the New York and Pacific Stock
Exchanges like PS Group common stock. The new holding company will have the
same directors and officers as PS Group and its consolidated financial position
will be identical to that of PS Group.
PS Group has filed with the Securities and Exchange Commission a
preliminary version of the proxy statement/prospectus, to be distributed to
shareholders in connection with the 1996 Annual Meeting. That document is
publicly available and includes the text of the proposed transfer restrictions.
However, the offering of the new shares will be made under the federal
securities laws only pursuant to the definitive version of that document
declared effective by the Securities and Exchange Commission.
This press release may be deemed to contain certain forward-looking
statements with respect to the financial condition of PS Group, Inc. which
involve risks and uncertainties including, but not limited to, the availability
of the tax benefits referred to herein, the amount of otherwise-taxable income
against which such benefits may be offset, and the effect of the proposed
transfer restrictions referred to herein in reducing the risk of a loss of such
benefits. Further information on potential factors which could affect the
financial results of PS Group, Inc. and, following the proposed reorganization,
the new holding company are included in the filings of PS Group, Inc. with the
Securities and Exchange Commission.
* * *
CONTACT:
Lawrence A. Guske Daniel H. Burch
PS Group, Inc. MacKenzie Partners, Inc.
(619) 546-5004 (212) 929-5748
