FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHAMPION ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2743168
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
2701 University Drive, Suite 320, Auburn Hills, Michigan 48326
(Address of principal executive offices) (Zip Code)
If this Form relates to the If this Form relates to the
registration of a class of debt registration of a class of debt
securities and is effective upon securities and is to become effective
filing pursuant to General simultaneously with the effectiveness
Instruction A(c)(1), please check of a concurrent registration
the following box. statement under the Securities Act of
/ / 1933 pursuant to General Instruction
A(c)(2), please check the following
box.
/ /
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
Chicago Stock Exchange, Incorporated
The Pacific Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On January 9, 1996, the Board of Directors of CHAMPION ENTERPRISES,
INC. (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, $1.00 par value (the "Common Stock"), of
the Company. The distribution is payable on February 5, 1996 to the Company's
shareholders of record on February 5, 1996. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Preferred Stock, no par value (the "Preferred Stock"), at a price of
$140 per one one-hundredth of a 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 Harris Trust and
Savings Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten business 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 shares of the Common Stock or (ii)
ten business days following the commencement or announcement of an intention
to commence a tender offer or exchange offer by any person if, upon
consummation thereof, such person would be an Acquiring Person (the earlier of
such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of February 5, 1996, by such Common Stock certificate. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after February 5, 1996 upon transfer or new issuance of the Common Stock 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 of the Common Stock certificates outstanding as
of February 5, 1996 will also constitute the transfer of the Rights associated
with the Common Stock 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 Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 5, 2006, unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of shares of the Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock; (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for shares of the
Preferred Stock or convertible securities at less than the current market
price of the Preferred Stock; or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid or a
dividend paid in the Preferred Stock) or of subscription rights or warrants
(other than those referred to above).
In the event (i) that the Company were acquired in a merger or other
business combination transaction in connection with which all or a part of the
Common Stock shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property; or (ii) that 50% or more of
the Company's assets or earning power were sold, then proper provision shall
be made so that each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be void),
shall thereafter have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares of common
stock of the Acquiring Person which at the time of such transaction would have
a market value of two times the exercise price of the Right. In the event
that (i) the Company were the surviving corporation in a merger and its Common
Stock were not changed or exchanged; or (ii) an Acquiring Person engages in
one of a number of self-dealing transactions specified in the Rights
Agreement; or (iii) in certain circumstances, an Acquiring Person becomes the
beneficial owner of 20% or more of the outstanding shares of Common Stock,
then proper provision shall be made so that each holder of a Right, other than
Rights that were or are beneficially owned by the Acquiring Person (which will
thereafter be void), shall thereafter have the right to receive upon exercise
that number of shares of the Common Stock (or, in certain circumstances, a
combination of cash, other property, Preferred Stock, Common Stock and/or
other securities) having a market value of two times the exercise price of the
Right. Each of the events described in this paragraph constitutes a
"Triggering Event" under the Rights Agreement.
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. Prior to a Triggering Event, fractional shares of the
Preferred Stock will not be issued (other than fractions which are integral
multiples of one one-hundredths of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash will be made equal to the same fraction of the
current market value of one one-hundredth of a share of Preferred Stock.
Following the occurrence of a Triggering Event, the Company shall not be
required to issue fractions of shares of Common Stock and, in lieu thereof, an
adjustment in cash will be made equal to the same fraction of the current
market value of one share of Common Stock.
At any time prior to 5:00 P.M., Detroit time, on the tenth business day
following the public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 20% or more of the
outstanding shares of the Common Stock of the Company (the "Shares Acquisition
Date"), the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price");
provided that if such redemption occurs on or after the Shares Acquisition
Date the Board shall be entitled to so redeem the Rights only if such
redemption is approved by a majority of the Continuing Directors (as defined
in the Rights Agreement) and the Continuing Directors constitute a majority of
the Board of Directors. Thereafter, the Company's right of redemption may be
reinstated, prior to a Triggering Event, (i) if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company;
and (ii) there are no other Persons, immediately following the event described
in clause (i), who are Acquiring Persons. Additionally, the Continuing
Directors may at any time prior to the occurrence of a Triggering Event,
redeem the then outstanding Rights in whole, but not in part, at the
Redemption Price; provided that such redemption is in connection with the
consummation of a merger or other business combination involving the Company
but not involving an Acquiring Person or its Affiliates or Associates which is
determined to be in the best interests of the Company and all its shareholders
by a majority of the Continuing Directors or by the holders of 80% of the
outstanding Common Stock not owned by the Acquiring Person or its Affiliates
or Associates. Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make announcement
thereof, and upon such election, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
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.
The provisions of the Rights Agreement may be amended by the Board of
Directors in order to cure any ambiguity or correct any defect or
inconsistency and by the Continuing Directors, prior to the Distribution Date,
to make changes deemed to be in the best interests of the holders of the
Rights or, after the Distribution Date, to make such other changes which do
not adversely affect the interests of the holders of the Rights (excluding the
interests of any Acquiring Person and its Affiliates and Associates), or to
shorten or lengthen any time period under the Rights Agreement, except that no
amendment to adjust the time periods governing redemption shall be made at
such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed as Exhibit 2 to this
Registration Statement on Form 8-A and is incorporated herein by reference.
The foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to Exhibit 2.
ITEM 2. EXHIBITS
EXHIBIT NO. DESCRIPTION
1 Form of certificate representing Rights (included as Exhibit B
to the form of Rights Agreement filed herewith as Exhibit 2).
Pursuant to the Rights Agreement, Rights Certificates will not
be mailed until after the earlier of (i) the tenth business day
after the Shares Acquisition Date; or (ii) the tenth business
day after the date of the commencement of, or first public
announcement of the intent to commence, a tender or exchange
offer by any person or group of affiliated or associated persons
(other than the Company or certain entities affiliated with or
associated with the Company), if, upon consummation thereof,
such person or group of affiliated or associated persons would
be the beneficial owner of 20% or more of such outstanding
shares of Common Stock.
2 Form of Rights Agreement, dated as of January 9, 1996, between
Champion Enterprises, Inc. and Harris Trust and Savings Bank
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
CHAMPION ENTERPRISES, INC.
/S/ A. JACQUELINE DOUT
Dated: January 11, 1996 By: A. Jacqueline Dout
Executive Vice President and
Chief Financial Officer
3490DRM
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1 Form of certificate representing Rights (included as Exhibit B
to the form of Rights Agreement filed herewith as Exhibit 2).
Pursuant to the Rights Agreement, Rights Certificates will not
be mailed until after the earlier of (i) the tenth business day
after the Shares Acquisition Date; or (ii) the tenth business
day after the date of the commencement of, or first public
announcement of the intent to commence, a tender or exchange
offer by any person or group of affiliated or associated persons
(other than the Company or certain entities affiliated with or
associated with the Company), if, upon consummation thereof,
such person or group of affiliated or associated persons would
be the beneficial owner of 20% or more of such outstanding
shares of Common Stock.
2 Form of Rights Agreement, dated as of January 9, 1996, between
Champion Enterprises, Inc. and Harris Trust and Savings Bank
RIGHTS AGREEMENT
This Agreement, dated as of January 9, 1996, is between
Champion Enterprises, Inc., a Michigan corporation (the
"Company"), and Harris Trust and Savings Bank (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend distribution (the
"Distribution") of one Right for each outstanding share of the
Common Stock, $1.00 par value, of the Company outstanding on
February 5, 1996 (the "Record Date") and has authorized the
issuance of one Right in respect of each share of Common Stock
of the Company issued between February 5, 1996 and the earlier
of the Distribution Date, the Expiration Date or the Final
Expiration Date (as such terms are hereinafter defined), and
under certain other circumstances, each Right initially
representing the right to purchase one one-hundredth of a share
of Series A Preferred Stock of the Company having the rights,
powers and preferences set forth in the Articles of Amendment
attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which,
together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined)
of securities of the Company constituting a Substantial
Block (as such term is hereinafter defined), but shall
not include the Company or any subsidiary of the
Company, or any employee benefit plan of the Company or
of any subsidiary of the Company, or any Person or
entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan;
provided, however, that no Person which, together with
all Affiliates and Associates of such Person, is the
Beneficial Owner of less than 25% of the Common Shares
of the Company then outstanding and which would be
entitled to file a statement on Schedule 13G pursuant
to Rule 13d-1 of the General Rules and Regulations
under the Exchange Act (as hereinafter defined) as in
effect on the date of this Agreement with respect to
the shares Beneficially Owned by such Person, shall be
deemed to be an "Acquiring Person;" provided, further,
that no Person shall be deemed to be an "Acquiring
Person" on account of Common Shares of the Company
Beneficially Owned by such Person as of the time the
adoption of this Agreement is first publicly announced
unless after such announcement such Person shall become
the Beneficial Owner of any additional Common Shares of
the Company. Notwithstanding the foregoing, 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 of
the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common
Shares of the Company, 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 the date of this
Agreement.
(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, directly or indirectly,
has (A) the right to acquire (whether such right
is exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing), or upon the exercise of conversion
rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," (1) securities
tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange, or (2) securities issuable upon exercise
of Rights at any time prior to the occurrence of a
Triggering Event or (3) securities issuable upon
exercise of Rights from and after the occurrence
of a Triggering Event, which Rights were acquired
by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or
pursuant to Section 3(a) hereof ("Original
Rights") or pursuant to Section 11(i) or Section
22 hereof in connection with an adjustment made
with respect to Original Rights; or (B) the right
to vote or dispose of, pursuant to any agreement,
arrangement or understanding (whether or not in
writing); provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to
"beneficially own," any security under this clause
(B) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a
revocable proxy given in response to a public
proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not
then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such
Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in
clause (B) of subparagraph (ii) of this paragraph
(c)) or disposing of any securities of the
Company; provided, however, that nothing in this
paragraph (c) shall cause a person engaged in
business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own,"
any securities acquired through such person's
participation in good faith in a firm commitment
underwriting until the expiration of forty days
after the date of such acquisition.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase
"then outstanding," when used with reference to a
Person's Beneficial Ownership of Securities of the
Company, shall mean the number of such securities
then issued and outstanding together with the
number of such securities not then actually issued
and outstanding which such Person would be deemed
to own beneficially hereunder.
(d) "Business Day" shall mean any day other than
a Saturday, Sunday, or a day on which banking
institutions in the State of Michigan 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., Detroit time, on such date; provided,
however, that if such date is not a Business Day it
shall mean 5:00 P.M., Detroit time, on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to
the Company shall mean the Common Stock, $1.00 par
value, of the Company, and when used with reference to
any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest
voting power, or the equity securities or other equity
interest having power to control or direct the
management, of such Person or, if such other Person is
a subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
(g) "Continuing Director" shall mean any member
of the Board of Directors of the Company, while such
person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate
and was a member of the Board prior to the Shares
Acquisition Date, and any successor of a Continuing
Director, while such successor is a member of the
Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or representative
or nominee of an Acquiring Person or of any such
Affiliate or Associate, and is recommended or elected
to succeed the Continuing Director by a majority of the
Continuing Directors.
(h) "Distribution Date" shall have the meaning
set forth in Section 3 hereof.
(i) "Final Expiration Date" shall have the
meaning set forth in Section 7 hereof.
(j) "Person" shall mean any individual, firm,
corporation or other entity and shall include any
successor (by merger or otherwise) of such entity.
(k) "Preferred Stock" shall mean shares of Series
A Preferred Stock, no par value, of the Company.
(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) "Substantial Block" shall mean a number of
shares of the Common Stock which equals or exceeds 20%
of the number of shares of the Common Stock then
outstanding.
(n) "Triggering Event" shall mean any event
described in Section 11(a)(ii)(A), (B) or (C) or
Section 13(a).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof shall prior to the Distribution Date also be the holders
of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the
earlier of (i) the tenth business day after the Shares
Acquisition Date or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement of, or first public
announcement of the intent to commence, by any Person (other
than the Company, any subsidiary of the Company, or any employee
benefit plan of the Company or of any subsidiary of the Company
or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan), a
tender or exchange offer if, upon consummation thereof, such
Person would be an Acquiring Person (including any such date
which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of the dates in subsections
(i) and (ii) hereof being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for the Common
Stock shall be deemed also 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 the Common Stock. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class,
insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of
Exhibit B hereto, evidencing one Right for each share of the
Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates. The
Company will notify the Rights Agent promptly of the
Distribution Date.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Preferred Stock, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address
of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Common Stock registered
in the names of the holders of the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the certificates
for the Common Stock outstanding on the Record Date, shall also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of
Common Stock issued after the Record Date but prior to the
earlier of the Distribution Date, the Expiration Date or the
Final Expiration Date (as such terms are defined in Section 7).
Certificates representing such shares of Common Stock shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in a Rights Agreement between CHAMPION
ENTERPRISES, INC. and Harris Trust and
Savings Bank, Rights Agent, dated as of
January 9, 1996 (the "Rights Agreement"), the
terms of which are hereby incorporated herein
by reference and a copy of which is on file
at the principal executive offices of
CHAMPION ENTERPRISES, 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. CHAMPION
ENTERPRISES, INC. will mail to the holder of
this certificate a copy of the Rights
Agreement (as in effect on the date of
mailing) without charge promptly after
receipt of a written request therefor. Under
certain circumstances, Rights which are or
were beneficially owned by Acquiring Persons
or their Affiliates or Associates (as such
terms are defined in the Rights Agreement)
and any subsequent holder of such Rights may
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate. In the event that the Company
purchases or acquires any shares of the Common Stock after the
Record Date but prior to the Distribution Date, any Rights
associated with such shares of the Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Stock which is
no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right
Certificates (and the forms of election to purchase shares and
of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B hereto and may have such
marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the
Right Certificates, whenever issued, shall be dated as of the
Record Date, and on their face shall entitle the holders thereof
to purchase such number of one one-hundredths of a share of the
Preferred Stock as shall be set forth therein at the price per
share set forth therein (the "Purchase Price"), but the amount
and type of securities and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this
Agreement, any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned
by (i) an Acquiring Person or any Associate or Affiliate
thereof, (ii) on or after the Distribution Date by any Person
who subsequently becomes an Acquiring Person (or an Affiliate or
Associate of an Acquiring Person), (iii) by a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or
(iv) by a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(e)
hereof, any Right Certificate issued at any time to any nominee
of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Section 7(e) of
the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The
Right Certificates shall be executed on behalf of the Company in
the manner provided in the By-Laws of the Company for Common
Stock Certificates. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered 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 office, 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
4(b), Section 7(e) and Section 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to
the close of business on the earlier of the Expiration Date or
the Final Expiration Date, any Right Certificate or 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 share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent for such
purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section
14 hereof, countersign 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 owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS. (a) Subject to Section 7(e) hereof,
the registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein)
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 office of the Rights Agent,
together with payment of the aggregate Purchase Price with
respect to the total number of one one-hundredths of a share of
Preferred Stock (or other securities or property, as the case
may be) as to which such surrendered Rights are then
exercisable, at or prior to the close of business on the earlier
of (i) February 5, 2006 (the "Final Expiration Date"), or (ii)
the date on which the Rights are redeemed as provided in Section
23 (such earlier date being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $140, 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 and
the certificate duly executed, accompanied by payment of the
Purchase Price per one one-hundredth of a share of Preferred
Stock (or other shares, securities or property, as the case may
be) to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of the Preferred Stock of
the Company certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) if the Company shall have
elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (iii) when appropriate,
requisition from any transfer agent of the Common Stock of the
Company certificates for the total number of shares of Common
Stock to be paid in accordance with Section 11(a)(ii) and
11(a)(iii), (iv) 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, (v) promptly after receipt
of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may
be designated by such holder and (vi) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate. In the event that
the Company is obligated to issue securities, distribute
property or pay cash pursuant to Section 11(a)(iii) hereof, the
Company will make all arrangements necessary so that cash,
property or securities are available for issuance, distribution
or payment by the Rights Agent, if and when appropriate.
(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 Certificate or to
his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, any Rights that are or were at any time on or after
the earlier of the Distribution Date or the Shares Acquisition
Date beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void upon the occurrence of a
Triggering Event and no holder of such Rights shall have any
right with respect to such Rights under any provision of this
Agreement from and after the occurrence of a Triggering Event.
The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF 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 SHARES OF
CAPITAL STOCK. (a) The Company covenants and agrees that it
will cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and will use
its best efforts, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock
or its authorized and issued Common Stock held in its treasury
and/or other securities), the number of shares of Preferred
Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) that, as provided in this
Agreement, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the first occurrence of a
Triggering Event, a registration statement under the Securities
Act of 1933 (the "Act"), with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Act) until the date of the expiration of the Rights. The
Company will also take such action as may be appropriate under
the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety
(90) days, the exercisability of the Rights in order to prepare
and file such registration statement. Upon any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification in such jurisdiction shall have been
obtained.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one
one-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any one
one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required (a) to
pay any transfer tax which may be payable in respect of any
transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the
one one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in a name
other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to
issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock upon the exercise
of any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person
in whose name any certificate for a number of one one-hundredths
of a share of Preferred Stock (or shares of Common Stock and/or
other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of
Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the 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 Stock
(or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a shareholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of
shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of
the Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of
the Preferred Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing
corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as
the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred
Stock 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 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 Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time
after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or
otherwise combine with the Company, the Company
shall be the continuing or surviving corporation
of such merger or combination, and the Common
Stock of the Company shall remain outstanding, (2)
shall, in one or more transactions, transfer any
assets to the Company in exchange (in whole or in
part) for shares of the capital stock of the
Company or for securities exercisable for or
convertible into shares of the capital stock of
the Company or otherwise obtain from the Company,
with or without consideration, any additional
shares of the capital stock of the Company or
securities exercisable for or convertible into
shares of the capital stock of the Company (other
than as part of a pro rata distribution to all
holders of the Common Stock of the Company), (3)
shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one
transaction or a series of transactions), to, from
or with, as the case may be, the Company or any of
the Company's subsidiaries, other than incidental
to the lines of business currently engaged in as
of the date hereof between the Company and such
Acquiring Person or Associate or Affiliate, assets
having an aggregate fair market value of more than
$15,000,000, other than a transaction set forth in
Section 13(a) hereof, (4) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or
otherwise dispose (in one transaction or a series
of transactions), to, from or with the Company or
any of the Company's subsidiaries, assets on terms
and conditions less favorable to the Company than
the Company would be able to obtain through
arm's-length negotiation with an unaffiliated
third party, other than a transaction set forth in
Section 13(a) hereof, (5) shall receive any
compensation from the Company or any of the
Company's subsidiaries other than compensation for
full-time employment as a regular employee at
rates in accordance with the Company's (or its
subsidiaries') past practices, or (6) shall
receive a direct or indirect benefit (except
proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or other tax
advantage provided by the Company or any of its
subsidiaries, or
(B) any Person (other than the Company, any
subsidiary of the Company, any employee benefit
plan of the Company or of any subsidiary of the
Company, or any Person or entity organized,
appointed or established by the Company for or
pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall
become the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, unless
the event causing the 20% threshold to be crossed
is a transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of Common
Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock
at a price and on terms determined by at least a
majority of the Continuing Directors, after
receiving advice from one or more investment
banking firms, to be (a) at a price that is fair
to shareholders (taking into account all factors
that the Continuing Directors deem relevant
including, without limitation, prices that could
reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the
best interests of the Company and its shareholders
(other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is
being made), or
(C) during such time as there is an
Acquiring Person, (1) there shall be any failure
to declare and pay at the regular date therefor
any full quarterly dividends (whether or not
cumulative) on any outstanding Preferred Stock of
the Company (except to the extent such declaration
or payment would be prohibited under the laws of
the Company's jurisdiction of incorporation), (2)
there shall be any reduction in the annual rate of
dividends paid on the Common Stock (except to
reflect any subdivision of the Common Stock or as
required under the laws of the Company's
jurisdiction of incorporation or as approved by a
majority of the Continuing Directors and the
Continuing Directors constitute a majority of the
Board of Directors or by the holders of 66-2/3%
percent or more of the then outstanding shares of
Common Stock beneficially owned by Persons other
than the Acquiring Person or its Affiliates or
Associates), (3) there shall be a failure to
increase the annual rate of dividends as necessary
to reflect any reclassification (including any
reverse stock split), recapitalization,
reorganization or any similar transaction which
has the effect of reducing the number of
outstanding shares of the Common Stock (except to
the extent such increase in the rate of dividends
would be prohibited under the laws of the
Company's jurisdiction of incorporation), or (4)
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 to which the Company or any of its
subsidiaries is a party (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
or convertible 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, within five (5) days after the date of the
occurrence of an event described in Section
11(a)(ii)(B) hereof and promptly following the
occurrence of any event described in Section
11(a)(ii)(A) or (C) hereof, proper provision shall be
made so that each holder of a Right (except as provided
in Section 7(e) hereof) shall thereafter have a right
to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of
a share of Preferred Stock, such number of shares of
the Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths
of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the
current market price per share of the Common Stock of
the Company (determined pursuant to Section 11(d)) on
the date on which the first of the events listed above
in this subparagraph (ii) occurs (such number of shares
are hereinafter referred to as the "Adjustment
Shares"). For the purposes of this Section
"subsidiaries" shall mean any corporations or other
entities of which a majority of the voting power of the
voting equity securities or equity interests is owned,
directly or indirectly, by the Company.
(iii) In the event that there shall not be
sufficient authorized but unissued Common Stock to
permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall
take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon
exercise of the Rights; provided, however, if the
Company is unable to cause the authorization of a
sufficient number of additional shares of Common Stock,
then, in the event the Rights become so exercisable,
the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and
any agreements or instruments in effect on the date
hereof to which it is a party, shall, upon the exercise
of such Rights, (A) pay cash in an amount equal to the
Purchase Price, in lieu of issuing shares of Common
Stock and requiring payment therefor, or (B) issue debt
or equity securities, or a combination thereof, having
a value equal to the Current Value (as defined
hereinafter) of the Common Stock (including, without
limitation, shares, or units of shares, of preferred
stock, which may include the Preferred Stock), where
the value of such securities shall be determined by a
nationally recognized investment banking firm selected
by the Board of Directors of the Company, and require
the payment of the Purchase Price, or (C) deliver any
combination of cash, property, Common Stock and/or
other securities having a value equal to the Current
Value, and require payment of all or any requisite
portions of the Purchase Price. The Current Value
shall be the product of the current market price per
share of Common Stock (determined pursuant to Section
11(d) on the date of the occurrence of any of the
events listed above in subparagraph (ii)) multiplied by
the number of shares of Common Stock for which the
Right otherwise would be exercisable if there were
sufficient shares available. To the extent that the
Company determines that some action need be taken
pursuant to clauses (A), (B) or (C) of the proviso of
this Section 11(a)(iii), a majority of the Continuing
Directors may suspend the exercisability of the Rights
for a period of up to 45 days following the date on
which the first of the events listed in Section
11(a)(ii)(A), (B) or (C) shall have occurred, in order
to decide the appropriate form of distribution to be
made pursuant to the above proviso and to determine the
value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating
that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.
(b) In the case the Company shall fix a record date
for the issuance of rights or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock") or securities convertible into
Preferred Stock or equivalent preferred stock) at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as defined in Section 11(d))
per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be
the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock which
the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price and of which the denominator shall be the
number of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock
and/or equivalent preferred stock to be offered for subscription
or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right. 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. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in
the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date has not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness or assets (other than
a regular periodic cash dividend at a rate not in excess of 125%
of the rate of the last cash dividend theretofore paid or a
dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription
rights or warrants (excluding those referred to in 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, of
which the numerator shall be the current market price (as
defined in Section 11(d)) per share of Preferred Stock on such
record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to one share of Preferred Stock and of
which the denominator shall be such current market price per
share of Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one
Right. 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
under Section 11(b) or (c) hereof, the "current market
price" per, or "value" of a, share of the Common Stock
on any date of determination shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to
such date, and for the purpose of any computation in
Section 11(a)(ii) and Section 13, the "current market
price" per, or "value" of a, share of Common Stock on
any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for 20
consecutive Trading Days immediately following such
date; provided, however, that in the event that the
current market price (or value) per share of the Common
Stock is determined during the period following the
announcement by the issuer of such Common Stock of (A)
a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities
convertible into shares of such Common Stock, or (B)
any sub-division, combination or reclassification of
such Common Stock, and prior to the expiration of 30
Trading Days or 20 Trading Days, as the case may be,
after the ex-dividend date for such dividend or
distribution, or the record date for such sub-division,
combination or reclassification, then, and in each such
case, the "current market price" or "value" shall be
appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or,
if the shares of the Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed on
the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to
trading or, if the shares of the Common Stock are not
listed or admitted to trading on any national
securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares
of the Common Stock are not quoted by such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker
making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date
no market maker is making a market in the Common Stock,
the fair value of such shares on such date shall be as
determined in good faith by the Continuing Directors if
the Continuing Directors constitute a majority of the
Board of Directors or in the event the Continuing
Directors do not constitute a majority of the Board of
Directors, by an independent investment banking firm
selected by the Board of Directors. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the
transaction of business or, if the shares of the Common
Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking
institutions in the State of Michigan are not
authorized or obligated by law or executive order to
close. If the Common Stock is not publicly held or not
so listed or traded, "current market price" per share
shall mean the fair value per share as determined in
good faith by the Continuing Directors of the Company
if the Continuing Directors constitute a majority of
the Board of Directors or in the event the Continuing
Directors do not constitute a majority of the Board of
Directors by an independent investment banking firm
selected by the Board of Directors, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preferred Stock
shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof).
If the current market price per share of Preferred
Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of
this Section 11(d), the "current market price" per
share of Preferred Stock shall be conclusively deemed
to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per
share of the Common Stock. If neither the Common Stock
nor the Preferred Stock is publicly held or so listed
or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of
the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one
one-hundredth of a share of Preferred Stock shall mean
the "current market price" per share of Preferred Stock
divided by 100.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the 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 Stock, thereafter the number of
such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a)
through (p), inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a share of
Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
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 share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one one-hundredths of a share covered by a Right
immediately prior to such 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 share of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for
the number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately
after the 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 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 Right
Certificates on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of
a share and the number of one one-hundredths of a 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 a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally
issue fully paid and nonassessable one one-hundredths of a share
of such Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of one
one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares 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
Preferred Stock, issuance wholly for cash of any of the shares
of Preferred Stock at less than the current market price,
issuance wholly for cash of the Preferred Stock or securities
which by their terms are convertible into or exchangeable for
Preferred Stock, stock dividends or issuance of rights, options
or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections
23 and 26 hereof, take (nor will it permit any of its
subsidiaries to take) any action if at the time such is taken it
is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights, unless such action is approved by a
majority of the Continuing Directors and the Continuing
Directors constitute a majority of the Board of Directors.
(o) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with, (ii) merge with or into, or (iii) sell or transfer (or
permit any of its subsidiaries to sell or transfer), in one or
more transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person if at the
time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time
after the date of this Agreement and prior to the Distribution
Date (i) declare or pay any dividend on the Common Stock of the
Company payable in such Common Stock or (ii) subdivide the
outstanding Common Stock of the Company into a greater number of
shares (by reclassification or otherwise than by payment of
dividends in such Common Stock) or (iii) combine or consolidate
the outstanding Common Stock of the Company into a smaller
number of shares, then in any such case, (x) the number of one
one-hundredths of a share of Preferred Stock purchasable after
such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a
share of Preferred Stock so purchasable immediately prior to
such event by a fraction, the numerator of which is the number
of shares of Common Stock of the Company outstanding immediately
before such event and the denominator of which is the number of
shares of such Common Stock outstanding immediately after such
event and (y) action shall be taken such that each share of
Common Stock of the Company outstanding immediately after such
event shall have issued with respect to it that number of Rights
which each share of such Common Stock outstanding immediately
prior to such event had issued with respect to it. The Company
may elect on or after the date of any adjustment of the number
of one one-hundredths of a share of Preferred Stock purchasable
upon proper exercise of each Right pursuant to this Section
11(p), to adjust the Purchase Price. The adjustments provided
for in this Section 11(p) shall be made successively whenever
such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs
which would require an adjustment under Section 11(a)(ii) and
this Section 11(p), the adjustments provided for in this Section
11(p) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii).
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock) in
accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER. (a) In the event that, following
the Distribution Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate, merge with and into
the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger,
all or part of the Common Stock 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 (z) the Company
shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person, then, and
in each such case, proper provision shall be made so that (i)
each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then-current Purchase Price in
accordance with the terms of this Agreement, such number of
shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as hereinafter
defined), not subject to any rights of call or first refusal, as
shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right
is then exercisable and dividing that product by (2) 50% of the
current market price per share of the Common Stock of such
Principal Party (determined in the manner described in Section
11(d)) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the Principal Party 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 Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of
its Common Stock in accordance with Section 9) 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 shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any of the transactions
described in Section 13(a) hereof.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in
(x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are
so issued, the Person that is the other party to the
merger or consolidation; and
(2) in the case of any transaction described in
(z) of the first sentence in this Section 13, the
Person that is the other party to such transaction;
provided, however, that in any such case, (x) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under
Section 12 of the Securities Exchange Act of 1934, and such
Person is a direct or indirect subsidiary of another corporation
the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other corporation; (y) in
case such Person is a subsidiary, directly or indirectly, of
more than one corporation, the Common Stocks of all of which are
and have been so registered, "Principal Party" shall refer to
whichever of such corporations is the issuer of the Common Stock
having the greatest market value of shares held by the public,
and (z) in case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set
forth in (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such
party were a "subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal
Party will
(i) prepare and file a registration statement
under the Securities Act of 1933, as amended (the
"Act") with respect to the Rights and the securities
purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause
such registration statement to become effective as soon
as practicable after such filing and will use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration
of the Rights; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under
the Securities Exchange Act of 1934.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers. In the event that one of the transactions described
in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a tender or exchange
offer for all outstanding shares of Common Stock which complies
with the provisions of Section 11(a)(ii)(B) hereof (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock offered in such transaction is not
less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such tender or exchange offer and (iii) the form of
consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender or exchange
offer. Upon consummation of any transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights 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. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares (other than fractions which are integral
multiples of one one-hundredths of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of fractional shares that
are not integral multiples of one one-hundredth of a share of
Preferred Stock, the Company may pay to the registered holders
of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a
share of Preferred Stock. For purposes of this Section 14(b),
the current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing price
of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii)) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
(1) share of Common Stock. For purposes of this Section 14(c),
the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and
in this Agreement and subject to the limitations set forth in
such Right Certificates and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach
of this Agreement and will be entitled to specific performance
of the obligations under, and injunctive relief against actual
or threatened violations of, the obligations of any Person
subject to this Agreement.
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 Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
and
(c) subject to Section 6(a), Section 7(e) and
Section 7(f) hereof, the Company and the Rights Agent
may deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated
Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e)
hereof, 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 shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any 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), 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 administration of this Agreement, including the
costs and expenses of defending against any claim of liability
in the premises. The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company.
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 Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by
it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or
persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT. Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation, succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature
of the predecessor 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 the 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 which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the 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
only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals
contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company
of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to
any provision of this Agreement); nor shall it be
responsible for any adjustment required under the
provisions of Sections 11 or 13 or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would
require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates
after actual notice of any such change or adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any shares of the Common Stock to be
issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of the Common
Stock will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the President, any
Vice-President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with
instructions of any such officer.
(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 accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause l and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise or transfer without
first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the
Preferred Stock and Common Stock by registered or certified
mail, and the Company will mail said notice 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 Preferred Stock and Common Stock by registered or certified
mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of
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, in good
standing under the laws of its Incorporation, 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 or 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 Preferred Stock and Common
Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the
number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of shares of Common
Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee
plan or arrangement outstanding, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences
to the Company or the person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be
issued, if and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION. (a) The Board of Directors of
the Company may, at its option, at any time prior to 5:00 P.M.,
Detroit time, on the earlier of (x) the tenth business day
following the Shares Acquisition Date, or (y) the Final
Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"), provided, however, that if such redemption
occurs on or after the Shares Acquisition Date the Board of
Directors of the Company shall be entitled to so redeem the
Rights only if Continuing Directors constitute a majority of the
Board of Directors at the time of such redemption and such
redemption is approved by a majority of the Continuing
Directors; provided, further, however, that if, following the
occurrence of a Shares Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any
Triggering Event, each of the following shall have occurred and
remain in effect: (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of
Common Stock in a transaction, or series of transactions, which
did not result in the occurrence of a Triggering Event such that
such Person is thereafter a Beneficial Owner of 10% or less of
the outstanding shares of Common Stock, (ii) there are no other
Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, and (iii)
the transfer or other disposition described in clause (i) above
was other than pursuant to a transaction, or series of
transactions, which directly or indirectly involved the Company
or any of its Subsidiaries; then the right of redemption shall
be reinstated and thereafter be subject to the provisions of
this Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the
Company's right of redemption pursuant to this Section 23(a)
without regard to the last proviso.
(b) During the period commencing at the close of
business on the tenth business day following the Shares
Acquisition Date and terminating on the earlier of (x) the
occurrence of a Triggering Event and (y) the Final Expiration
Date, the Board of Directors of the Company may, at its option,
redeem a11 but not less than all of the then outstanding Rights
at the Redemption Price, provided that (i) such redemption is in
connection with the consummation of an event set forth in clause
(x) or (y) of Section 13(a), (ii) no Acquiring Person, and no
Affiliate or Associate of an Acquiring Person (other than the
Company or its subsidiaries) is a constituent corporation to
such event; and (iii) such redemption is approved either by a
majority of the Continuing Directors as being in their judgment
in the best interest of the Company and all its stockholders and
the Continuing Directors constitute a majority of the Board of
Directors at the time of such redemption or by holders of 80% or
more of the then outstanding shares of Common Stock beneficially
owned by persons other than the Acquiring Person, its Affiliates
or Associates.
(c) 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. The Company shall promptly give public notice
of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after the action of
the Board of Directors ordering the redemption of the Rights,
the Company shall give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. 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 repurchase of Common
Stock prior to the Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS. In case the
Company shall propose at any time following the Distribution
Date (a) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular periodic
cash dividend at a rate not in excess of 125% of the rate of the
last cash dividend theretofore paid), or (b) to offer to the
holders of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the
subdivision of outstanding Preferred Stock), 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 its subsidiaries
to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of
the Company and its subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section
25, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend,
distribution of rights or Rights, 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 Preferred
Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (a) or (b)
above at least twenty days prior to the record date for
determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of
the Preferred Stock, whichever shall be the earlier.
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, in accordance with Section 25, 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).
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:
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
Attention: President
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights
Agent shall be deemed given or made upon receipt and shall be
addressed (until another address is filed in writing with the
Company) as follows:
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
P.O.Box 755
Chicago, Illinois 60690
Attention: Shareholder Services
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder
of any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the 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 (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or
(iii) prior to the Distribution Date, to change or supplement
the provisions hereunder which the Company may deem necessary or
desirable and in the best interests of the holders of the Rights
or (iv) following the Distribution Date, to change or supplement
the provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person), or to shorten or lengthen any time period under this
Agreement; provided, however, that no amendment to adjust the
time periods governing redemption shall be made at such time as
the Rights are not redeemable; and provided, further, that this
Agreement shall not be supplemented or amended in any way (other
than pursuant to clauses (i) and (ii) above) unless such
amendment is approved by a majority of the Continuing Directors
whose determination shall be final and the Continuing Directors
constitute a majority of the Board of Directors. Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interests
under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.
SECTION 27. SUCCESSORS. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made
in accordance with the provisions of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company (and, where specifically provided
for herein, the Continuing Directors) shall have the exclusive
power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the
Company (or, as expressly provided, the Continuing Directors),
or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and
(ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement).
All such actions, ca1cu1ations, interpretations and
determinations (including, for purpose of clause (ii) below, all
omissions with respect to the foregoing) which are done or made
by the Board (or, as provided for, by the Continuing Directors)
in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates
and all other parties, and (ii) not subject the Board or the
Continuing Directors to any liability to the holders of the
Rights Certificates.
SECTION 29. 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 Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right
Certificates.
SECTION 30. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the
Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth business day
following the date of such determination by the Board of
Directors.
SECTION 31. 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 Michigan 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 32. COUNTERPARTS. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
Attest: CHAMPION ENTERPRISES, INC.
By By
Title: Title:
Attest: Harris Trust and Savings Bank
By By
Title: Title:
<PAGE>
EXHIBIT A TO RIGHTS AGREEMENT
FORM OF AMENDMENT TO
ARTICLES OF INCORPORATION DETERMINING
THE TERMS OF THE SERIES A PREFERRED STOCK
of
CHAMPION ENTERPRISES, INC.
It is certified that:
FIRST: That the name of the corporation is Champion
Enterprises, Inc. (the "Corporation").
SECOND: That pursuant to the authority conferred upon
the Board of Directors by the Articles of Incorporation of the
said Corporation, the Board of Directors of the Corporation on
January 9, 1996, duly adopted the following resolution creating
a series of 300,000 shares of Preferred Stock, no par value,
designated as Series A Preferred Stock:
RESOLVED, That it is hereby declared to be in the best
interests of the Corporation that the Articles of Incorporation
of the Corporation, as amended and restated to date, be further
amended to create a new series of Preferred Stock to consist of
300,000 shares and to be designated as Series A Preferred Stock,
no par value, and to determine the preferences, limitations and
relative rights of the Series A Preferred Stock by adding the
following to Article III of such Articles of Incorporation to
read as follows:
Series A Preferred Stock, No Par Value
A. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Stock, no par value,"
and the number of shares constituting such series shall be
300,000.
B. Dividends and Distributions.
(1) Subject to any prior and superior rights of
the holders of any series of Preferred Stock ranking prior and
superior to the shares of Series A Preferred Stock with respect
to dividends that may be authorized by the Articles of
Incorporation, the holders of shares of Series A Preferred Stock
shall be entitled prior to the payment of any dividends on
shares ranking junior to the Series A Preferred Stock 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 last day of January, April, July and
October 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 Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 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, par value $1.00 per share, of the Corporation (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 Series A Preferred Stock. In the event
the Corporation shall at any time after February 5, 1996 (the
"Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A 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.
(2) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (1) above 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 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 $1.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(3) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series A Preferred Stock, 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 Series A Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for the
payment thereof.
(4) Dividends in full shall not be declared or
paid or set apart for payment on the Series A Preferred Stock
for a dividend period terminating on the Quarterly Dividend
Payment Date unless dividends in full have been declared or paid
or set apart for payment on the Preferred Stock of all series
(other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the
respective dividend periods terminating on such dividend date.
When the dividends are not paid in full on all series of the
Preferred Stock, the shares of all series shall share ratably in
the payment of dividends, including accumulations, if any, in
accordance with the sums which would be payable on said shares
if all dividends were declared and paid in full.
C. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(1) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred
Stock shall entitle the holder thereof to 100 votes on
all matters voted on at a meeting of the shareholders
of the Corporation. In the event the Corporation shall
at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares
of Common Stock, or (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each
such case the number of votes per share to which
holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
(2) Except as otherwise provided herein or by
law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote
together as one voting group on all matters voted on at
a meeting of shareholders of the Corporation.
(3) Except as set forth herein, holders of Series
A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate
action.
D. Certain Restrictions.
(1) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred
Stock as provided in Section B. are in arrears, thereafter and
until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not:
(a) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(b) declare or pay dividends on or make any other
distributions on any shares or stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
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;
(c) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock;
(d) purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock or
any shares of stock ranking on a parity with the Series
A 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.
(2) 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 5,
purchase or otherwise acquire such shares at such time and in
such manner.
E. Liquidation, Dissolution or Winding Up.
(1) Upon any liquidation, dissolution or winding
up of the Corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $100.00
per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date
of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be
made to the holders of shares of Series A Preferred Stock
unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph (3) below to reflect such
events as stocks splits, stock dividends and recapitalizations
with respect to the Common Stock (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A
Preferred Stock and Common Stock, respectively, holders of
Series A Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the
remaining assets to be distributed.
(2) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(3) In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
F. Merger, Consolidation. etc. In case the
Corporation shall enter into any merger, consolidation,
combination or other transaction in which the shares of Common
Stock are exchanged or changed into other stock or securities,
cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A 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.
G. Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
H. Ranking. The Series A Preferred Stock shall rank
on a parity with all other series of the Corporation's Preferred
Stock as to the payment of dividends and other distribution of
assets, unless, in accordance with authorization in the Articles
of Incorporation, the terms of any such series shall provide
otherwise.
I. Amendment. The Articles of Incorporation of the
Corporation shall not be further amended in any manner which
would alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting
separately as one voting group.
J. Fractional Shares. Series A Preferred Stock may
be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
THIRD: That this Amendment to the Articles of
Incorporation of the Corporation as amended and supplemented was
adopted on January 9, 1996.
FOURTH: That this Amendment to the Articles of
Incorporation of the Corporation as amended and restated was
duly adopted by the Board of Directors of the Corporation,
without shareholder action, which shareholder action, was not
required.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true this 9th
day of January, 1996.
CHAMPION ENTERPRISES, INC.
By:
Attest:
Secretary
3468
<PAGE>
EXHIBIT B TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. R Rights
NOT EXERCISABLE AFTER FEBRUARY 5, 2006 OR
EARLIER IF NOTICE OF REDEMPTION IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
[THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*
Right Certificate
CHAMPION ENTERPRISES, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement
dated as of January 9, 1996 (the "Rights Agreement") between
CHAMPION ENTERPRISES, INC., a Michigan corporation (the
"Company"), and Harris Trust and Savings Bank (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Detroit time) on February 5,
2006 at the office of the Rights Agent, or its successors as
Rights Agent, in Chicago, Illinois, one one-hundredth of a fully
paid non-assessable share of the Series A Preferred Stock, no
par value (the "Preferred Stock"), of the Company, at a purchase
price of $140 per one one-hundredth of a 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 shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of
, 19 based on the Preferred Stock of the Company as
constituted at such date.
* The portion of the legend in brackets shall be inserted only
if applicable.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such
Triggering Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the
Rights evidenced by this 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 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 above-mentioned office of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one
one-hundredths of a share of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of the Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obliga-
tory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of ,
19 .
ATTEST: CHAMPION ENTERPRISES, INC.
By:
Secretary Title:
COUNTERSIGNED:
By
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto
(Please print name an address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated:
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being sold, assigned and transferred by or
on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 19
Signature
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights represented
by the Right Certificate.)
To Champion Enterprises, Inc.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to
purchase the shares of the one one-hundredths of a share of
Series A Preferred Stock (or, in certain circumstances, a
combination of cash, other property, Preferred Stock, Common
Stock, and/or other securities) upon the exercise of such Rights
and requests that certificates for such shares be issued in the
name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name
of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19
Signature
(Signature must conform in
all respects to name of holder
as specified on the face of
this Right Certificate)
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 19
Signature
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the fact
of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT C TO RIGHTS AGREEMENT
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On January 9, 1996, the Board of Directors of CHAMPION
ENTERPRISES, INC. (the "Company") declared a dividend
distribution of one Right for each outstanding share of Common
Stock, $1.00 par value (the "Common Stock"), of the Company.
The distribution is payable on February 5, 1996 to the Company's
shareholders of record on February 5, 1996. Each Right entitles
the registered holder to purchase from the Company one
one-hundredth of a share of Series A Preferred Stock, no par
value (the "Preferred Stock") at a price of $140 per one
one-hundredth of a 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 Harris Trust and Savings Bank, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) ten business 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 shares of the Common Stock or
(ii) ten business days following the commencement or
announcement of an intention to commence a tender offer or
exchange offer by any person if, upon consummation thereof, such
person would be an Acquiring Person (the earlier of such dates
being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates
outstanding as of February 5, 1996, by such Common Stock
certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock
certificates issued after February 5, 1996 upon transfer or new
issuance of the Common Stock 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 of the Common Stock
certificates outstanding as of February 5, 1996 will also
constitute the transfer of the Rights associated with the Common
Stock 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 Stock as of the close of
business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on February 5, 2006, unless
earlier redeemed by the Company as described below.
The Purchase Price payable, and the number of shares of
the Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of the
Preferred Stock; (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for shares of
the Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock; or (iii) upon the
distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings at a rate not in
excess of 125% of the rate of the last cash dividend theretofore
paid or a dividend paid in the Preferred Stock) or of
subscription rights or warrants (other than those referred to
above).
In the event (i) that the Company were acquired in a
merger or other business combination transaction in connection
with which all or a part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other
Person or cash or any other property; or (ii) that 50% or more
of the Company's assets or earning power were sold, then proper
provision shall be made so that each holder of a Right, other
than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have
the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of
common stock of the Acquiring Person which at the time of such
transaction would have a market value of two times the exercise
price of the Right. In the event that (i) the Company were the
surviving corporation in a merger and its Common Stock were not
changed or exchanged; or (ii) an Acquiring Person engages in one
of a number of self-dealing transactions specified in the Rights
Agreement; or (iii) in certain circumstances, an Acquiring
Person becomes the beneficial owner of 20% or more of the
outstanding shares of Common Stock, then proper provision shall
be made so that each holder of a Right, other than Rights that
were or are beneficially owned by the Acquiring Person (which
will thereafter be void), shall thereafter have the right to
receive upon exercise that number of shares of the Common Stock
(or, in certain circumstances, a combination of cash, other
property, Preferred Stock, Common Stock and/or other securities)
having a market value of two times the exercise price of the
Right. Each of the events described in this paragraph
constitutes a "Triggering Event" under the Rights Agreement.
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. Prior to a
Triggering Event, fractional shares of the Preferred Stock will
not be issued (other than fractions which are integral multiples
of one one-hundredths of a share of Preferred Stock) and, in
lieu thereof, an adjustment in cash will be made equal to the
same fraction of the current market value of one one-hundredth
of a share of Preferred Stock. Following the occurrence of a
Triggering Event, the Company shall not be required to issue
fractions of shares of Common Stock and, in lieu thereof, an
adjustment in cash will be made equal to the same fraction of
the current market value of one share of Common Stock.
At any time prior to 5:00 P.M., Detroit time, on the
tenth business day following the public announcement that a
person or group of affiliated or associated persons has acquired
beneficial ownership of 20% or more of the outstanding shares of
the Common Stock of the Company (the "Shares Acquisition Date"),
the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"); provided that if such redemption occurs on
or after the Shares Acquisition Date the Board shall be entitled
to so redeem the Rights only if such redemption is approved by a
majority of the Continuing Directors (as defined in the Rights
Agreement) and the Continuing Directors constitute a majority of
the Board of Directors. Thereafter, the Company's right of
redemption may be reinstated, prior to a Triggering Event, (i)
if an Acquiring Person reduces his beneficial ownership to 10%
or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company;
and (ii) there are no other Persons, immediately following the
event described in clause (i), who are Acquiring Persons.
Additionally, the Continuing Directors may at any time prior to
the occurrence of a Triggering Event, redeem the then
outstanding Rights in whole, but not in part, at the Redemption
Price; provided that such redemption is in connection with the
consummation of a merger or other business combination involving
the Company but not involving an Acquiring Person or its
Affiliates or Associates which is determined to be in the best
interests of the Company and all its shareholders by a majority
of the Continuing Directors or by the holders of 80% of the
outstanding Common Stock not owned by the Acquiring Person or
its Affiliates or Associates. Immediately upon the action of
the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon
such election, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive
the Redemption Price.
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.
The provisions of the Rights Agreement may be amended
by the Board of Directors in order to cure any ambiguity or
correct any defect or inconsistency and by the Continuing
Directors, prior to the Distribution Date, to make changes
deemed to be in the best interests of the holders of the Rights
or, after the Distribution Date, to make such other changes
which do not adversely affect the interests of the holders of
the Rights (excluding the interests of any Acquiring Person and
its Affiliates and Associates), or to shorten or lengthen any
time period under the Rights Agreement, except that no amendment
to adjust the time periods governing redemption shall be made at
such time as the Rights are not redeemable.
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 January 11, 1996. 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.
3474DRM
