<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MAY 16, 1996
REPUBLIC GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 1-7210 75-1155922
(State of incorporation or organization) (Commission File Number) (I.R.S. Employer Identification No.)
811 East 30th Avenue
Hutchinson, Kansas 67502-4341
(Address of principal executive offices) (Zip Code)
Post Office Box 1307 67504-1307
Hutchinson, Kansas (Zip Code)
(Mailing address)
</TABLE>
(316) 727-2700
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On April 30, 1996, the Board of Directors of Republic Group
Incorporated (the "Company") declared a dividend distribution of one common
stock purchase right (a "Right") for each outstanding share of common stock,
$1.00 par value (the "Common Stock"), of the Company. The distribution was
paid on May 16, 1996 to the stockholders of record at the close of business on
that date. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a price of $45.00 per share of Common
Stock (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 UMB Bank, N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, any wholly-owned subsidiary of the Company, any employee
benefit plan of the Company or any such subsidiary, any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or any Exempt
person (as described below) but, in the case of an Exempt Person, only to the
extent of any shares of Common Stock (x) beneficially owned by such Exempt
Person on the date of the Rights Agreement or (y) acquired by such Exempt
Person after the date of the Rights Agreement from any other Exempt Person if
such shares have been beneficially owned only by Exempt Persons on and after
the date of the Rights Agreement) (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common Stock, or (ii) 10
business days (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)
following the commencement or announcement of an intention to make a tender or
exchange offer the consummation of which would result in any person becoming 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 May 16, 1996, by such Common Stock certificates
with a copy of a Summary of Rights attached thereto. (An Exempt Person
includes any of Phil or Lorraine Simpson, their descendants and their
descendants' spouses, trusts or estates for any of their benefits,
partnerships, corporations or other entities 80%-owned by any of them.)
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 May 16, 1996 upon transfer or new
issuance of shares of 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
certificates for Common Stock, outstanding as of May 16, 1996, even without
such notation or a copy of the Summary of Rights being attached thereto, 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 shares of Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
2
<PAGE> 3
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 16, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company as described below.
The Rights are protected by customary antidilution provisions. The
Purchase Price payable, and the number of shares of Common 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 Common
Stock, (ii) upon the grant to holders of the shares of Common Stock of certain
rights or warrants to subscribe for shares of Common Stock or convertible
securities at less than the current market price of the Common Stock or (iii)
upon the distribution to holders of shares of Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends thereafter
and, if there is an Acquiring Person, not exceeding 125% of the prior regular
periodic cash dividend, or dividends payable in shares of Common Stock) or of
subscription rights or warrants (other than those referred to above).
Subject to certain exchange rights that may be exercised by the Board
of Directors, in the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right (other than Rights
held by the Acquiring Person (which will thereafter be void)) shall thereafter
have the right (automatically upon exercise thereof) to receive that number of
shares of Common Stock having a market value of two times the Purchase Price.
In the event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its consolidated assets or earning
power were sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the Acquiring Person
which at the time of such transaction would have a market value of two times
the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued and
in lieu thereof a payment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to such time as any person or group becomes an
Acquiring Person, 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"). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
At any time after any person or group becomes an Acquiring Person, the
Board of Directors may exchange all or part of the outstanding and exercisable
Rights (other than Rights owned by such person or group which have become void)
for Common Stock at an exchange ratio of one share of Common Stock per Right,
as may be adjusted from time to
3
<PAGE> 4
time to reflect any stock split, stock dividend or similar transaction (the
"Exchange Right"). Notwithstanding the above, the Board of Directors may not
exercise the Exchange Right after any person, together with any associate or
affiliate of such person, has become the beneficial owner of 50% or more of the
voting power of the shares of Common Stock. Immediately upon the action of the
Board of Directors ordering the exchange of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive that number of shares of Common Stock equal to the number of Rights
held by such holders multiplied by the exchange ratio.
The terms of the Rights may be amended by the Company without the
consent of the holders of the Rights, including an amendment to lower the
threshold described above to not less than the greater of (i) a percentage
determined by the Board of Directors that is greater than the largest
percentage of the outstanding Common Shares then known to the Company to be
beneficially owned by any person or group (other than excepted persons
discussed above) and (ii) 10%, except that from and after such time as any
person or group becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a person or group has
acquired beneficial ownership of 15% or more of the shares of Common Stock.
The Rights Agreement, dated as of May 1, 1996, between the Company and
UMB Bank, N.A., as Rights Agent, specifying the terms of the Rights is attached
hereto as an exhibit and is incorporated herein by reference. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibit.
As of May 1, 1996 there were 10,603,104 shares of Common Stock issued
(including 2 shares of Common Stock held in the Company's treasury). Except
for 279,738 shares of Common Stock reserved for issuance upon the exercise of
outstanding employee stock options and stock appreciation rights, as of May 1,
1996 no shares of Common Stock were reserved for issuance pursuant to the
Company's employee benefit plans or upon conversion of convertible securities.
One Right was distributed to holders of shares of Common Stock for each share
of Common Stock owned of record by them at the close of business on May 16,
1996. Until the Distribution Date, the Company will issue one Right with each
share of Common Stock that shall become outstanding so that all shares of
Common Stock will have attached Rights.
4
<PAGE> 5
The Company's Bylaws were amended, effective May 16, 1996. The
amendments included a provision that stockholders meetings may be called by
stockholders only if the calling stockholders own in the aggregate 60% or more
of the outstanding common stock. The amendments included a provision that
requires not less than 60 days and not more than 120 days advance notice to the
Company of director nominations made by stockholders and of stockholder
proposals, or, if the first public disclosure of the meeting is less than 65
days prior to the meeting, such notice of director nomination or stockholder
proposal must be given not less than 10 days following the first public
disclosure of the meeting. The amendments also included a provision that
requires that certain information about any director nominees and the
stockholder making the nomination be furnished to the Company, including
information necessary to allow the Company to comply with the proxy rules of
the Securities and Exchange Commission.
The Bylaw amendments could be deemed to have an anti-takeover effect
in that a minimum ownership (60% of the outstanding shares) is required to call
a special meeting of stockholders and in that advance notice must be given of
stockholder-initiated director nominations and stockholder proposals; however,
neither provision will preclude a stockholder from bringing business before a
stockholders meeting.
The amendments to the Bylaws and the Bylaws, as amended, are attached
hereto as exhibits and are incorporated herein by reference. The foregoing
description of the amendments to the Bylaws is qualified in its entirety by
reference to such exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired:
None.
(b) Pro forma financial information:
None.
(c) Exhibits:
(3)(ii)(a) Amendments to Bylaws adopted effective May
16, 1996.
(3)(ii)(b) Bylaws as amended May 16, 1996.
(4) Form of Rights Agreement dated as of May 1,
1996 between Republic Group Incorporated and
UMB Bank, N.A., as Rights Agent, which
includes as Exhibit B the form of Right
Certificate.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Republic Group Incorporated
By:/s/DOYLE R. RAMSEY
------------------------------------------
Doyle R. Ramsey
Vice President and Chief Financial Officer
Date: May 20, 1996
6
<PAGE> 7
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
(3)(ii)(a) Amendments to Bylaws adopted effective May 16, 1996.
(3)(ii)(b) Bylaws as amended May 16, 1996.
(4) Form of Rights Agreement dated as of May 1, 1996 between
Republic Group Incorporated and UMB Bank, N.A., as Rights
Agent, which includes as Exhibit B the form of Right
Certificate.
7
<PAGE> 1
EXHIBIT (3)(ii)(a)
AMENDMENTS TO BYLAWS ADOPTED EFFECTIVE MAY 16, 1996
RESOLVED, that, effective on May 16, 1996, Article II of the
Corporation's Bylaws be amended so as to read in its entirety as follows:
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the
election of directors shall be held in the City of Dallas, State of
Texas, or at such place as may be fixed from time to time by the Board
of Directors, within or without the State of Delaware, as shall be
designated from time to time by the Board of Directors and stated in
the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. (a) Subject to Article III, Section 2 of
these Bylaws, only persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible to serve as
directors. Nominations of persons for election to the Board of
Directors of the corporation may be made at a meeting of stockholders
(1) by or at the direction of the Board of Directors or by any
nominating committee or person appointed by the Board of Directors and
(2) by any stockholder of the corporation entitled to vote for the
election of directors at the meeting, who is a stockholder of record
at the time of giving the notice provided for in these Bylaws and who
complies with the notice procedures set forth in these Bylaws.
(b) In addition to any other applicable
requirements, and subject to any limitations on business which may be
proposed or transacted at such meeting, including, without limitation,
Article II, Section 7 of these Bylaws, nominations for directors,
other than nominations made by or at the direction of the Board of
Directors or by any nominating committee or person appointed by the
Board of Directors, shall be made pursuant to timely notice in writing
to the Secretary of the corporation. To be timely with respect to an
annual meeting of stockholders, a stockholder's notice must be
received at the principal executive offices of the corporation not
less than sixty (60) days nor more than one hundred twenty days (120)
prior to the date of the annual meeting of stockholders; provided,
however, that in the event that the first public disclosure (whether
by mailing of a notice to stockholders or the exchange on which the
common stock of the corporation is listed or to the Nasdaq National
Market, by press release or otherwise) of the date of the annual
meeting of the stockholders is made less than sixty-five (65) days
prior to the date of such meeting, notice by a stockholder will be
timely if received at the principal executive offices of the
corporation not later than the close of business on the tenth (10) day
following the day on which such public disclosure is first made.
<PAGE> 2
To be timely with respect to a special meeting of stockholders at which
directors are to be elected, a stockholder's notice must be received
at the principal executive offices of the corporation not later than
the close of business on the tenth (10th) day following the day on
which the first public disclosure (whether by mailing of a notice to
stockholders or the exchange on which the common stock of the
corporation is listed or to the Nasdaq National Market, by press
release or otherwise) of the date of the special meeting is made.
(c) A stockholder's notice of a director nominee
shall set forth (1) as to each person whom the stockholder proposes to
nominate for election or re-election as a director, (a) the name, age,
business address and residence address of the person; (b) the
principal occupation or employment of the person; (c) the class and
number of shares of capital stock of the corporation which are
beneficially owned by the person; and (d) such other information
relating to the person, as would be required under the rules of the
Securities and Exchange Commission in a proxy statement soliciting
proxies for the election of such person whether or not such proxies
are in fact solicited for the election of such person; and (2) as to
the stockholder giving the notice (a) the name and address, as they
appear on the corporation's stock register, of the stockholder; (b)
the class and number of shares of capital stock of the corporation
which are beneficially owned by the stockholder; and (c) such other
information relating to the stockholder or the nomination as is
required to be disclosed under the rules of the Securities and
Exchange Commission governing the solicitation of proxies whether or
not such proxies are in fact solicited by the stockholder. Such
notice must also include a signed consent of each such nominee to
serve as a director of the corporation, if elected or re-elected. The
corporation may require any proposed nominee to furnish such other
information as may reasonably be required by the corporation to
determine the eligibility for election of such nominee as a director
of the corporation. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a director
nomination was not made in accordance with the foregoing procedure,
and if he should so determine, the defective nomination shall be
disregarded.
(d) Notwithstanding the foregoing provisions of
these Bylaws, a stockholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder with respect to the matters set
forth in this Article II, Section 2.
Section 3. Annual meetings of stockholders shall be held
on the fourth Thursday in October of each year if not a legal holiday
under laws of the state where such meeting is to be held, and if a
legal holiday under the laws of said state, then on the succeeding
business day not a legal holiday under the laws of said state, or at
such other date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the
meeting, at which the stockholders
2
<PAGE> 3
shall elect by a plurality vote a Board of Directors and transact such
other business as may properly be brought before the meeting.
Section 4. (a) At an annual or special meeting of the
stockholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before an
annual or special meeting of stockholders, business must be (1)
specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (2) otherwise
properly brought before the meeting by or at the direction of the
Board of Directors or (3) otherwise properly brought before the
meeting by any stockholder of the corporation who is entitled to vote
at such meeting, who is a stockholder of record at the time of giving
of the notice provided for in these Bylaws and who complies with the
notice procedures set forth in these Bylaws.
(b) In addition to any other applicable
requirements, and subject to any limitations on business which may be
proposed or transacted at such meeting, including, without limitation,
Article II, Section 7 of these Bylaws, for business to be properly
brought before an annual or special meeting by a stockholder pursuant
to clause (3) of paragraph (a) above, the stockholder must have given
timely notice thereof in writing to the Secretary of the corporation.
To be timely with respect to an annual meeting of stockholders, a
stockholder's notice must be received at the principal executive
offices of the corporation not less than sixty (60) days nor more than
one hundred twenty days (120) prior to the date of the annual meeting;
provided, however, that in the event that the first public disclosure
(whether by mailing of a notice to stockholders or the exchange on
which the common stock of the corporation is listed or to the Nasdaq
National Market, by press release or otherwise) of the date of the
annual meeting is made less than sixty-five (65) days prior to the
date of the meeting, notice by a stockholder will be timely if
received not later than the close of business on the tenth (10) day
following the day on which such public disclosure is first made. To
be timely with respect to a special meeting of stockholders, a
stockholder's notice must be received at the principal executive
offices of the corporation not later than the close of business on the
tenth (10th) day following the day on which the first public
disclosure (whether by mailing of a notice to stockholders or the
exchange on which the stock of the corporation is listed or to the
Nasdaq National Market, by press release or otherwise), of the date of
the special meeting is made.
(c) A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before
the meeting (1) a reasonably detailed description of the business
desired to be brought before the meeting and the reasons for
conducting such business at the meeting, (2) the name and address, as
they appear on the corporation's books, of the stockholder proposing
such business, and the name and address of the beneficial owner, if
any, on whose behalf the proposal is made, (3) the class and number of
shares of the corporation which are owned
3
<PAGE> 4
beneficially and of record by such stockholder of record and by the
beneficial owner, if any, on whose behalf the proposal is made, (4)
any material interest of such stockholder of record and the beneficial
owner, if any, on whose behalf the proposal is made in such business,
and (5) such other information relating to the stockholder or the
business proposed to be brought before the meeting as is required to
be disclosed under the rules of the Securities and Exchange Commission
governing the solicitation of proxies whether or not such proxies are
in fact solicited by the stockholder. Notwithstanding anything in
these Bylaws to the contrary, no business shall be conducted at an
annual or special meeting of stockholders except in accordance with
the procedures set forth in this Article II, Section 4 (or to the
extent applicable, Article II, Section 2); provided, however, that
nothing in this Article II, Section 4 shall be deemed to preclude
discussion by any stockholder of any business properly bought before
the annual or special meeting of stockholders in accordance with said
procedures.
(d) The chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that business was
not properly brought before the meeting in accordance with the
procedures prescribed by these Bylaws, and if he should so determine,
he shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted. Notwithstanding
the foregoing provisions of these Bylaws, a stockholder shall also
comply with all applicable requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Article II, Section 4.
(e) Notwithstanding anything in this Section 4, or
these Bylaws, should an annual or special meeting be convened and
subsequently adjourned, no business may be brought before any
reconvened annual or special meeting that was not, pursuant to these
Bylaws, properly brought before the annual or special meeting that was
previously adjourned.
Section 5. Written notice of the annual meeting shall be
given to each stockholder entitled to vote thereat at least ten days
before the date of the meeting.
Section 6. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days
before every election of directors, a complete list of the
stockholders entitled to vote at said election, arranged in
alphabetical order, showing the address of, and the number of shares
registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, during ordinary business hours,
for a period of at least ten days prior to the election, either at a
place within the city, town or village where the election is to be
held and which place shall be specified in the notice of the meeting,
or, if not specified, at the place where said meeting is to be held,
and the list shall be produced
4
<PAGE> 5
and kept at the time and place of election during the whole time
thereof, and subject to the inspection of any stockholder who may be
present.
Section 7. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the Chairman of the
Board, or, in the event of his absence or unavailability, the
President, and shall be called by the President or Secretary at the
request in writing of a majority of the Board of Directors, or at the
request in writing of stockholders owning at least sixty percent (60%)
of the common stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of
the proposed meeting.
Section 8. Written notice of a special meeting of
stockholders, stating the time, place and object thereof, shall be
given to each stockholder entitled to vote thereat, at least ten days
before the date fixed for the meeting.
Section 9. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 10. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation. If,
however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall have power
to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
Section 11. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by
express provision of the statutes or of the certificate of
incorporation, a different vote is required in which case such express
provision shall govern and control the decision of such question.
Section 12. Each stockholder shall at every meeting of
the stockholders be entitled to one vote in person or by proxy for
each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three years from its
date, unless the proxy provides for a longer period, and, except where
the transfer books of the corporation have been closed or a date has
been fixed as a record date for the determination of its stockholders
entitled to vote, no share of
5
<PAGE> 6
stock shall be voted on at any election for directors which has been
transferred on the books of the corporation within twenty days next
preceding such election of directors.
RESOLVED, that, effective on May 16, 1996, Article III, Section 2 of
the Corporation's Bylaws be amended so as to read in its entirety as follows:
Section 2. Vacancies and newly-created directorships
resulting from any increase in the authorized number of directors, and
vacancies whether because of death, resignation, disqualification, or
any other cause, may be filled by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director,
and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall
qualify, unless sooner displaced.
RESOLVED, that, effective on May 16, 1996, Article VIII, Section 1 of
the Corporation's Bylaws be amended so as to read in its entirety as follows:
Section 1. These bylaws may be altered or repealed at
any regular meeting of the stockholders or of the Board of Directors
or any special meeting of the stockholders or of the Board of
Directors if notice of such alteration or repeal be contained in the
notice of such special meeting.
6
<PAGE> 1
EXHIBIT (3)(ii)(b)
BYLAWS AS AMENDED MAY 16, 1996
REPUBLIC GROUP INCORPORATED
===========================
BYLAWS
======
ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of Dallas, State of Texas, or at such place
as may be fixed from time to time by the Board of Directors, within or without
the State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting or in a duly executed waiver
of notice thereof.
Section 2. (a) Subject to Article III, Section 2 of these
Bylaws, only persons who are nominated in accordance with the procedures set
forth in these Bylaws shall be eligible to serve as directors. Nominations of
persons for election to the Board of Directors of the corporation may be made
at a meeting of stockholders (1) by or at the direction of the Board of
Directors or by any nominating committee or person appointed by the Board of
Directors and (2) by any stockholder of the corporation entitled to vote for
the election of directors at the meeting, who is a stockholder of record at the
time of giving the notice provided for in these Bylaws and who complies with
the notice procedures set forth in these Bylaws.
(b) In addition to any other applicable requirements, and
subject to any limitations on business which may be proposed or transacted at
such meeting, including, without limitation, Article II, Section 7 of these
Bylaws, nominations for directors, other than nominations made by or at the
direction of the Board of Directors or by any nominating committee or person
appointed by the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the corporation. To be timely with respect to an
annual meeting of stockholders, a stockholder's notice must be received at the
principal executive offices of the corporation not less than sixty (60) days
nor more than one hundred twenty
1
<PAGE> 2
days (120) prior to the date of the annual meeting of stockholders; provided,
however, that in the event that the first public disclosure (whether by mailing
of a notice to stockholders or the exchange on which the common stock of the
corporation is listed or to the Nasdaq National Market, by press release or
otherwise) of the date of the annual meeting of the stockholders is made less
than sixty-five (65) days prior to the date of such meeting, notice by a
stockholder will be timely if received at the principal executive offices of
the corporation not later than the close of business on the tenth (10) day
following the day on which such public disclosure is first made. To be timely
with respect to a special meeting of stockholders at which directors are to be
elected, a stockholder's notice must be received at the principal executive
offices of the corporation not later than the close of business on the tenth
(10th) day following the day on which the first public disclosure (whether by
mailing of a notice to stockholders or the exchange on which the common stock
of the corporation is listed or to the Nasdaq National Market, by press release
or otherwise) of the date of the special meeting is made.
(c) A stockholder's notice of a director nominee shall
set forth (1) as to each person whom the stockholder proposes to nominate for
election or re-election as a director, (a) the name, age, business address and
residence address of the person; (b) the principal occupation or employment of
the person; (c) the class and number of shares of capital stock of the
corporation which are beneficially owned by the person; and (d) such other
information relating to the person, as would be required under the rules of the
Securities and Exchange Commission in a proxy statement soliciting proxies for
the election of such person whether or not such proxies are in fact solicited
for the election of such person; and (2) as to the stockholder giving the
notice (a) the name and address, as they appear on the corporation's stock
register, of the stockholder; (b) the class and number of shares of capital
stock of the corporation which are beneficially owned by the stockholder; and
(c) such other information relating to the stockholder or the nomination as is
required to be disclosed under the rules of the Securities and Exchange
Commission governing the solicitation of proxies whether or not such proxies
are in fact solicited by the stockholder. Such notice must also include a
signed consent of each such nominee to serve as a director of the corporation,
if elected or re-elected. The corporation may require any proposed nominee to
furnish such other information as may reasonably be required by the corporation
to determine the eligibility for election of such nominee as a director of the
corporation. The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a director nomination was not made in
accordance with the foregoing procedure, and if he should so determine, the
defective nomination shall be disregarded.
(d) Notwithstanding the foregoing provisions of these
Bylaws, a stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Article II, Section 2.
Section 3. Annual meetings of stockholders shall be held on the
fourth Thursday in October of each year if not a legal holiday under laws of
the state where such meeting is to be held, and if a legal holiday under the
laws of said state, then on the succeeding business day not a legal holiday
under the laws of said state, or at such other date and at such time as shall
be designated from time to time by the Board of Directors and stated in
2
<PAGE> 3
the notice of the meeting, at which the stockholders shall elect by a plurality
vote a Board of Directors and transact such other business as may properly be
brought before the meeting.
Section 4. (a) At an annual or special meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual or special
meeting of stockholders, business must be (1) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (2) otherwise properly brought before the meeting by or at the
direction of the Board of Directors or (3) otherwise properly brought before
the meeting by any stockholder of the corporation who is entitled to vote at
such meeting, who is a stockholder of record at the time of giving of the
notice provided for in these Bylaws and who complies with the notice procedures
set forth in these Bylaws.
(b) In addition to any other applicable requirements, and
subject to any limitations on business which may be proposed or transacted at
such meeting, including, without limitation, Article II, Section 7 of these
Bylaws, for business to be properly brought before an annual or special meeting
by a stockholder pursuant to clause (3) of paragraph (a) above, the stockholder
must have given timely notice thereof in writing to the Secretary of the
corporation. To be timely with respect to an annual meeting of stockholders, a
stockholder's notice must be received at the principal executive offices of the
corporation not less than sixty (60) days nor more than one hundred twenty days
(120) prior to the date of the annual meeting; provided, however, that in the
event that the first public disclosure (whether by mailing of a notice to
stockholders or the exchange on which the common stock of the corporation is
listed or to the Nasdaq National Market, by press release or otherwise) of the
date of the annual meeting is made less than sixty-five (65) days prior to the
date of the meeting, notice by a stockholder will be timely if received not
later than the close of business on the tenth (10) day following the day on
which such public disclosure is first made. To be timely with respect to a
special meeting of stockholders, a stockholder's notice must be received at the
principal executive offices of the corporation not later than the close of
business on the tenth (10th) day following the day on which the first public
disclosure (whether by mailing of a notice to stockholders or the exchange on
which the stock of the corporation is listed or to the Nasdaq National Market,
by press release or otherwise), of the date of the special meeting is made.
(c) A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the meeting
(1) a reasonably detailed description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(2) the name and address, as they appear on the corporation's books, of the
stockholder proposing such business, and the name and address of the beneficial
owner, if any, on whose behalf the proposal is made, (3) the class and number
of shares of the corporation which are owned beneficially and of record by such
stockholder of record and by the beneficial owner, if any, on whose behalf the
proposal is made, (4) any material interest of such stockholder of record and
the beneficial owner, if any, on whose behalf the proposal is made in such
business, and (5) such other information relating to the stockholder or the
business proposed to be brought before the meeting as is required to be
disclosed under the rules of the Securities and Exchange Commission governing
the
3
<PAGE> 4
solicitation of proxies whether or not such proxies are in fact solicited by
the stockholder. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at an annual or special meeting of stockholders
except in accordance with the procedures set forth in this Article II, Section
4 (or to the extent applicable, Article II, Section 2); provided, however, that
nothing in this Article II, Section 4 shall be deemed to preclude discussion by
any stockholder of any business properly bought before the annual or special
meeting of stockholders in accordance with said procedures.
(d) The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the procedures prescribed by
these Bylaws, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted. Notwithstanding the foregoing provisions of these Bylaws, a
stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Article II, Section 4.
(e) Notwithstanding anything in this Section 4, or these
Bylaws, should an annual or special meeting be convened and subsequently
adjourned, no business may be brought before any reconvened annual or special
meeting that was not, pursuant to these Bylaws, properly brought before the
annual or special meeting that was previously adjourned.
Section 5. Written notice of the annual meeting shall be given
to each stockholder entitled to vote thereat at least ten days before the date
of the meeting.
Section 6. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every election of
directors, a complete list of the stockholders entitled to vote at said
election, arranged in alphabetical order, showing the address of, and the
number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, during ordinary business hours,
for a period of at least ten days prior to the election, either at a place
within the city, town or village where the election is to be held and which
place shall be specified in the notice of the meeting, or, if not specified, at
the place where said meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole time thereof, and
subject to the inspection of any stockholder who may be present.
Section 7. Special meetings of the stockholders, for any purpose
or purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the Chairman of the Board, or, in the event of
his absence or unavailability, the President and shall be called by the
President or Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of stockholders owning at least sixty
percent (60%) of the common stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
4
<PAGE> 5
Section 8. Written notice of a special meeting of stockholders,
stating the time, place and object thereof, shall be given to each stockholder
entitled to vote thereat, at least ten days before the date fixed for the
meeting.
Section 9. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 10. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 11. When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or
of the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 12. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
the capital stock having voting power held by such stockholder, but no proxy
shall be voted on after three years from its date, unless the proxy provides
for a longer period, and, except where the transfer books of the corporation
have been closed or a date has been fixed as a record date for the
determination of its stockholders entitled to vote, no share of stock shall be
voted on at any election for directors which has been transferred on the books
of the corporation within twenty days next preceding such election of
directors.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the
whole Board of Directors shall be nine (9). The directors shall be elected at
the annual meeting of stockholders, except as provided in Section 2 of this
article; and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
Section 2. Vacancies and newly-created directorships resulting
from any increase in the authorized number of directors, and vacancies whether
because of death, resignation, disqualification, or any other cause, may be
filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so
5
<PAGE> 6
chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced.
Section 3. The business of the corporation shall be managed by
its Board of Directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
certificate of incorporation or by these bylaws directed or required to be
exercised or done by the stockholders.
Meetings of the Board of Directors
Section 4. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly-elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly-elected Board of Directors in order legally to
constitute the meeting, provided a quorum shall be present. In the event of
the failure of the stockholders to fix the time or place of such first meeting
of the newly elected Board of Directors, or in the event such meeting is not
held at the time and place so filled by the stockholders, the meeting may be
held at such time and place as shall be specified in a written waiver, signed
by all of the directors.
Section 6. Regular meetings of the Board of Directors may be
held without notice at such time and at such place as shall from time to time
be determined by the board.
Section 7. Special meetings of the board may be called by the
Chairman of the Board, or, in the event of his absence or unavailability, the
President, on three days' notice to each director, either personally or by mail
or by telegram; special meetings shall be called by the President or Secretary
in like manner and on like notice on the written request of two directors.
Section 8. At all meetings of the Board of Directors, a majority
of the directors then in office shall constitute a quorum for the transaction
of business, and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, except
as may be otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum shall not be present at any meeting of this Board
of Directors, the directors present thereat may adjourn the meeting from time
to time without notice, other than announcement at the meeting, until a quorum
shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if prior to such action a written consent thereto is signed
by all members of the board or of such committee as the case may be, and such
written consent is filed with the minutes of the proceedings of the board or
committee.
6
<PAGE> 7
Committees of Directors
Section 10. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee
to consist of two or more of the directors of the corporation, which, to the
extent provided in the resolution, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
Board of Directors.
Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
Compensation of Directors
Section 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders at
their addresses appearing on the books of the corporation. Notice by mail
shall be deemed to be given at the time when the same shall be mailed. Notice
to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a Chairman of the Executive Committee, a
Chairman of the Board, a President, a Vice President, a Secretary, a Treasurer
and a Controller. The Board of Directors may also choose additional Vice
Presidents, and one or more Assistant Secretaries and Assistant Treasurers.
Two or more offices may be held by the same person, except that where the
offices of President and Secretary are held by the same person, such person
shall not hold any other office.
7
<PAGE> 8
Section 2. The Board of Directors, at its first meeting after
each annual meeting of stockholders shall choose a Chairman of the Executive
Committee, a Chairman of the Board, a President, one or more Vice Presidents, a
Secretary and a Treasurer.
Section 3. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy
occurring in any office of the corporation shall be filled by the Board of
Directors.
Section 6. The Chairman of the Board shall preside at all
meetings of the stockholders and the Board of Directors unless he shall, at his
option, designate the President to preside in his stead at some particular
meeting and shall perform such other duties and have such other powers as the
Board of Directors shall from time to time prescribe.
Section 7. The President shall be the Chief Executive Officer of
the corporation. He shall preside at the meetings of the Board of Directors
and stockholders in the absence of the Chairman of the Board. Subject to the
supervision, approval and review of his action by the Board of Directors, and
agents of the corporation, other than officers, make and sign contracts and
agreements in the name of and on behalf of the corporation, and sign stock
certificates. The President shall put into operation the business policies of
the corporation as determined by the Board of Directors and as communicated to
him by such body. In carrying out such business policies, the President shall,
subject to the supervision of the Board of Directors, have general management
and control of the day to day business operations of the corporation. He shall
see that the books, reports, statements, and certificates required by statutes
or laws applicable to the corporation are properly kept, made and filed
according to law. The President shall be subject only to the authority of the
Chairman of the Board and the Board of Directors in carrying out his duties.
He shall make recommendations to the Chairman of the Board on all matters which
would normally be reserved for the final executive responsibility of the
Chairman of the Board. In the absence or disability of the President, his
duties shall be performed and his powers may be exercised by the Executive Vice
Presidents in order of their seniority (or if there should be no Executive Vice
Presidents then by the Vice Presidents in the order if their seniority), unless
otherwise determined by the President, the Chairman of the Board or the Board
of Directors.
Section 8. The Executive Vice Presidents shall generally assist
the Chairman of the Board and the President and, subject to the supervision,
approval and review of their actions by the Chairman of the Board, the
President and the Board of Directors, shall have authority to make and sign
contracts and agreements on behalf of the corporation and sign
8
<PAGE> 9
stock certificates. The Executive Vice Presidents shall have and exercise such
powers and have and perform such duties as shall be assigned to them from time
to time by the President, the Chairman of the Board and the Board of Directors.
Section 9. The Vice Presidents (who shall have such descriptive
titles, if any as the Board of Directors shall deem appropriate) shall
generally assist the Chairman of the Board, the President, and the Executive
Vice Presidents and, subject to supervision approval and review of their
actions by the Chairman of the Board, the President, the Executive Vice
Presidents and the Board of Directors, shall have authority to make and sign
contracts and agreements on behalf of the corporation and sign stock
certificates. The Vice Presidents shall have and exercise such powers and have
and perform such duties as shall be assigned to each of them from time to time
by the Executive Vice Presidents, the President, the Chairman of the Board and
the Board of Directors.
Section 10. The Assistant Vice Presidents shall generally assist
the Chairman of the Board, the President, the Executive Vice Presidents and the
Vice Presidents and shall have and exercise such power and have and perform
such duties as shall be assigned to each of them from time to time by the Vice
Presidents, the Executive Vice Presidents, the President and the Chairman of
the Board.
Section 11. The Secretary shall attend all meetings of the Board
of Directors when required and all meetings of the stockholders and record all
the proceedings of the meeting of the corporation and of the Board of Directors
in a book to be kept for that purpose and shall like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meeting of the Board of Directors when
required, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall be. He shall keep
in safe custody, the seal of the corporation and, when authorized by the Board
of Directors, affix the same to any instrument requiring it and when so affixed
it shall be attested by his signature or by the signature of an assistant
secretary.
Section 12. The Assistant Secretary, or, if there be more than
one, the Assistant Secretaries in the order determined by the Board of
Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
Section 13. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
Section 14. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, taking proper voucher
for such disbursements, and shall render to the President and the Board of
Directors, at its regular meetings, or when the
9
<PAGE> 10
Board of Directors so requires, an account of all his transactions as Treasurer
and of the financial condition of the corporation.
Section 15. If required by the Board of Directors, the Treasurer
shall give the corporation a bond (which shall be renewed every six years) in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 16. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation
by, the Chairman or Vice chairman of the Board of Directors, President or a
Vice- President and the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the corporation, certifying the number of shares
owned by him in the corporation.
Section 2. Where a certificate is signed (1) by a transfer agent
or an assistant transfer agent or (2) by a transfer clerk acting on behalf of
the corporation and a registrar, the signature of any such Chairman or a Vice
chairman of the Board of Directors, President, Vice-President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary, may be facsimile. In
case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on, any such certificate or certificates shall cease
to be such officer or officers of the corporation, whether because of death,
resignation or otherwise, before such certificate or certificates have been
delivered by the corporation, such certificate or certificates may nevertheless
be adopted by the corporation and be issued and delivered as though the person
or persons who signed such certificate or certificates or whose facsimile
signature or signatures have been used thereon had not ceased to be such
officer or officers of the corporation.
Lost Certificates
Section 3. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that person claiming the certificate of
stock to be lost or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion and
as a condition
10
<PAGE> 11
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost or destroyed.
Transfers of Stock
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence succession, assignment or authority to transfer,
it shall be the duty of the corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
its books.
Closing of Transfer Books
Section 5. The Board of Directors may close the stock transfer
books of the corporation for a period not exceeding sixty days preceding the
date of any meeting of stockholders or the date for payment of any dividend or
the date for the allotment of rights or the date when any change or conversion
or exchange of capital stock shall go into effect or for a period of not
exceeding sixty days in connection with obtaining the consent of stockholders
for any purpose. In lieu of closing the stock transfer books as aforesaid, the
Board of Directors may fix in advance a date, not exceeding sixty days
preceding the date of any meeting of stockholders, or the date for the payment
of any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or a
date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock
or to give such consent, and in such case such stockholders and only such
stockholders as shall be stockholders of record on the date so fixed she be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent, as the case may
be notwithstanding any transfer of any stock on the books of the corporation
after any such record date fixed as aforesaid.
Registered Stockholders
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
11
<PAGE> 12
ARTICLE VII
GENERAL PROVISIONS
Dividends
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
Annual Statement
Section 3. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition
of the corporation.
Checks
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Fiscal Year
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
Seal
Section 6. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the word "Seal". The
seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
12
<PAGE> 13
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered or repealed at any
regular meeting of the stockholders or of the Board of Directors or any special
meeting of the stockholders or of the Board of Directors if notice of such
alteration or repeal be contained in the notice of such special meeting.
ARTICLE IX
INDEMNIFICATION
Section 1. Actions, Suits, or Proceedings Other Than by or in
the Right of the Corporation.
(a) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending, or completed action, civil suit, or proceeding, whether
civil, criminal, administrative, arbitrate or investigative (other
than an action by or in the right of the corporation) by reason of the
fact that he is or was or has or had agreed to become a director or
officer of the corporation, or (while a director or officer of the
corporation) is or was serving or has or had agreed to serve at the
request of the corporation as an employee or agent of the corporation,
or as a director, officer, partner, venturer, proprietor, trustee,
committee member, administrator, employee an employee or agent of
another corporation, partnership, joint venture, sole proprietorship,
trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in any such capacity against costs, charges,
expenses (including attorneys' fees), judgments, fines, penalties and
amounts paid in settlement incurred by him or on his behalf in
connection with such action, suit, or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding,
had no reasonable cause to be his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order
settlement, conviction, or upon a plea of NOLO CONTENDERE or its
equivalent, shall not create a presumption that the person did not act
in good faith and in a manner that he reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(b) The corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative (other than an
action by or in the right of the corporation) by reason of the fact
that he is or was or has or had agreed to of the corporation, or
(while an employee or agent of the corporation) is or was serving or
has or had agreed to serve at the request of the corporation as a
director, officer, partner, venturer, proprietor, trustee, committee
member, administrator, employee or agent of another corporation,
partnership, joint venture, sole proprietorship, trust or other
enterprise, or by reason of any action alleged to have been taken or
omitted in any such capacity expenses
13
<PAGE> 14
(including attorneys' fees), judgments, fines, penalties and amounts
paid in settlement incurred by him or on his behalf in connection with
such action, suit, or proceeding and any appeal therefrom, if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order settlement, citation, or upon a plea of
NOLO CONTENDERE or its equivalent, shall not create a presumption that
the person did not act in good faith and in a manner that he really
believed to be in or not opposed to the best interests of the
corporation with respect to any criminal action or proceeding, had
reasonable cause at his conduct was unlawful.
Section 2. Actions or Suits by or in the Right of the
Corporation.
(a) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the
corporation to procure in its favor by reason of the fact that he is
or was or has or had agreed to be a director or officer of the
corporation, or (while a director or corporation) is or was serving or
has or had agreed to serve at the request of the corporation as an
employee or agent of the corporation or as a director, officer,
partner, venturer, proprietor, trustee, committee member,
administrator, employee or agent of another corporation, partnership,
joint venture, sole proprietorship, trust or other enterprise, or by
reason of any action alleged to have been taken or omitted in any such
capacity, against costs, charges, and expenses (including attorneys'
fees) incurred by him or on his behalf in connection with such action
or suit, and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be
made in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery of Delaware or the court
in which such action on suit was brought shall determine upon
application that, despite the adjudication of such liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such costs, charges, and expenses
that the Court of Chancery or such other court shall deem proper.
(b) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact
that he is or was or has or had agreed to become an employee or agent
of the corporation, or (while an employee or agent of the corporation)
is or was serving or has had agreed to serve at the request of the
corporation as a director, officer, partner, venturer, proprietor,
trustee, committee member, administrator, employee or agent of another
corporation, partnership, joint venture, sole proprietorship, trust or
other enterprise, or by reason of any action alleged to have been
taken or omitted in any such capacity, against costs, charges, and
expenses (including attorneys' fees) incurred by him or on his behalf
in connection with such
14
<PAGE> 15
action or suit, and any appeal therefrom, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue, or matter as to which
such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of Delaware
or the court in which such action on suit was brought shall determine
upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such costs, charges, and
expenses that the Court of Chancery or such other court shall deem
proper.
Section 3. Indemnification for Costs, Charges, and Expenses of
Successful Party. Notwithstanding the other provisions of this Article, to the
extent that a director, officer, employee or agent of the corporation has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit, or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of
any claim, issue, or matter therein, he shall be indemnified against any and
all costs, charges, and expenses (including attorneys' fees) incurred by him or
on his behalf in connection therewith.
Section 4. Determination of Right to Indemnification.
(a) Any indemnification under Sections 1(a) or 2(a) of
this Article (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he has met the applicable standard
of conduct set forth in Section 1(a) or 2(a) of this Article. Such
determination shall be made either (I) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, (II) by independent legal counsel
(who may be the outside counsel regularly employed by the corporation)
in a written opinion or (III) by the stockholders; provided, however,
that the manner in which (and, if applicable, the counsel by which)
the right to indemnification is to be determined shall be approved in
advance in writing by both the corporation and the director or officer
seeking indemnification. In the event that the parties are unable to
agree on the manner in which the determination of the right to
indemnity is to be made, such determination hall be made by
independent legal counsel retained by the corporation especially for
such purpose; provided, however, that such counsel be approved in
advance in writing by both the Board of Directors and the director or
officer seeking indemnification, such approval not to be unreasonably
withheld by either; and provided, further, that such counsel shall not
be the outside counsel regularly employed by the corporation. The
fees and expenses of counsel in connection with making the
determinations contemplated by this Section 4(a) shall be paid by the
corporation, and, if requested by such counsel, the corporation shall
give such counsel appropriate written agreement with respect to the
payment of their fees and expenses and such other matters as may be
reasonably requested by counsel. Notwithstanding the foregoing, any
director or officer seeking indemnification by the corporation
pursuant to this Section 4(a) may, either before or after a
determination has been made as provided above, petition a court of
15
<PAGE> 16
competent jurisdiction to determine whether the standard of Section
4(a) or 2(a) above has been satisfied, and such court shall thereupon
have the exclusive authority to make such determination unless and
until such court dismisses or otherwise terminates such action without
having made such determination. The court shall make an independent
determination of whether the standard of Section 1(a) or 2(a) above
has been met, irrespective of any prior determination made by the
Board of Directors, the stockholders or counsel. In such proceeding
the burden of proof that the applicable standard of conduct has not
been met shall be upon the corporation. Neither the failure by the
corporation (including its Board of Directors, its independent legal
counsel and its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the person is
proper in the circumstances because such person has met the standard
of conduct set forth in Section 1(a) or 2(a) of this Article, nor the
fact that there has been an actual determination by the corporation
(including its Board of Directors, its independent legal counsel and
its stockholders) that such person has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that such person has not met the applicable standard of
conduct. If the court shall determine that the standard of conduct of
Section 1(a) or 2(a) above has been met as to any claim, issue or
matter involved in the action, suit or proceeding with respect to
which there has been no prior determination pursuant to this Section
4(a) or with respect to which there has been a prior determination
pursuant to the Section 4(a) that the standard of conduct in Section
1(a) or Section 2(a) has not been met, the corporation shall pay all
expenses (including attorneys' fees) actually incurred by such
director in connection with such judicial determination.
(b) Any indemnification under Sections 1(b) or 2(b) of
this Article (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the person specified in such
Section is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 1(b) or 2(b) of
this Article. Such determination shall be made (I) by the Board of
Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (II) by
independent legal counsel, if such a quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, or
(III) by the stockholders. The Board of Directors shall have the sole
power to determine the manner in which such determination shall be
made.
Section 5. Advancement of Costs, Charges, and Expenses.
(a) Costs, charges, and expenses (including attorneys'
fees) incurred by a person referred to in Sections 1(a) or 2(a) of
this Article in defending, investigating or appealing a civil,
criminal, administrative, arbitrative or investigative action, suit,
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit, or proceeding upon receipt of an
undertaking by or on behalf of such person to repay all amounts so
advanced if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
16
<PAGE> 17
Article. Such undertaking shall not be required to be secured and
shall be accepted by the corporation, without reference to financial
ability to make repayment.
(b) Costs, charges, and expenses (including attorneys'
fees) incurred by a person referred to in Sections 1(a) or 2(a) of
this Article in defending, investigating or appealing a civil,
criminal, administrative, arbitrative or investigative action, suit,
or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit, or proceeding upon receipt of an
undertaking by or on behalf of such person to repay all amounts so
advanced if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
Article. Such undertaking shall not be required to be secured and
shall be accepted by the corporation, without reference o financial
ability to make repayment.
(c) A person whose costs, charges and expenses have b
paid in advance of the final disposition of an action, suit or
proceeding pursuant to this Section 5 shall be required to repay the
amounts so advanced only if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this Article.
Section 6. Witness Expenses. The corporation shall reimburse
any person who was or is or has or had agreed to become a director or officer
of the corporation, and may indemnify any person who was or is or has or had
agreed to become an for all costs, charges and expenses (including attorneys'
fees) incurred by such person in connection with (i) such person's having been
called or investigative action, suit or proceeding to which the corporation,
joint venture, sole proprietorship, trust or other enterprise, in which
director, officer, employee or agent of the corporation is or was serving as a
director, officer, partner, venturer, proprietor, trustee, committee member,
administrator, employee or agent at the request of the corporation, or in which
the corporation holds an equity interest, is or was or is threatened to be made
a party, or (ii) such person's serving as a witness in, or producing materials
in connection with, any such action, suit or proceeding. The reimbursement of
such costs, charges and expenses shall be governed by this Section 6 unless
(and then only for the period that) such person becomes, is made or remains a
party to any such action, suite or proceeding to which Section 1 or 2 of this
Article applies.
Section 7. Procedure for Indemnification. Any indemnification
under Sections 1(a), 2(a), and 3, or advancement or reimbursement of costs,
charges, and expenses under Sections 5(a) and 6 of this Article, shall be made
promptly upon the written request of the director or officer, and in any event
within ninety (90) days after delivery of such written request to the
corporation in the case of a request pursuant to Sections 1(a) or 2(a) of this
Article, and within ten (10) days after delivery of such written request in the
case of a request pursuant to Section 5(a) or 6 of this Article. The costs,
charges and expenses which a person entitled to indemnification or advancement
or reimbursement of expenses under Sections 1(a), 2(a), 5(a) or 6 of this
Article shall be entitled to receive shall be deemed to include interest
calculated on a daily basis at a rate per annum equal to the lesser of (i) a
rate which is two (2) percentage points above the rate of interest per annum
publicly announced by Citibank, N.A. from time to time in New York as its
"prime rate" (or similar reference rate) or (ii) the maximum rate of interest
per annum permitted by applicable law,
17
<PAGE> 18
from the date such written request is made through the date the same is paid in
full. Such interest shall be compounded quarterly. The rights to
indemnification under Sections 1(a), 2(a) and 3, and advancement or
reimbursement of costs, charges and expenses under Sections 5(a) and 6 of this
Article shall be enforceable b as applicable, in any court of competent
jurisdiction if whole or in part, or if no disposition thereof is made with
officer, employee or agent, denies such request, in (90) day period or ten (10)
day period, as applicable. The costs, charges and expenses incurred by a
person in connection with successfully establishing his right to
indemnification under Sections 1(a), 2(a) and 3 or advancement or reimbursement
of costs, charges at and expenses under Section 5(a) and 6 of this Article and
in collecting the same shall be promptly paid by the corporation, though in any
event within thirty (30) days of such person's request therefor.
Section 8. Notice of Claims; Selection of Counsel, Conduct of
Proceedings; Approval of Settlements, Subrogation. Any person entitled to
indemnification or advancement or reimbursement of expenses under Sections 1,
2, 5 or 6 of this Article with respect to any action, suit or proceeding shall
give the corporation written notice of such action, suit or proceeding promptly
after having become a party thereto or having been called as a witness or
subpoenaed to produce materials in connection therewith; provided, however,
that the failure to give such notice shall not excuse the corporation from its
obligations hereunder except to the extent it is actually harmed by the failure
to receive such notice. In connection with any civil or criminal action, suit,
or proceeding referred to in Sections 1, 2, 5 and 6 of this Article, a person
referred to in such Sections shall have the right to select counsel with
respect to his defense thereof, but, in any action, suit or proceeding other
than one to which Section 2(a) or 2(b) hereof is applicable, the corporation
shall have the right to select counsel with respect to his, defense thereof,
but, in any action, suit or proceeding other than one to which Section 2(a) or
2(e) of is applicable, the corporation shall have the right to approve such
counsel, such approval not to be unreasonable withheld. The Board of Directors
may, with the written approval of such person, authorize the outside counsel
regularly employed by the corporation, to represent such person in any action,
suit or proceeding, whether or not the corporation is a party to such action,
suit, or proceeding. The corporation shall have the right to participate in
such action, suit or proceeding and be represented therein by its own counsel,
but counsel for the person entitled to indemnification or advancement or
reimbursement of expenses hereunder shall have the right to control the defense
of such action, suit or proceeding to which Sections 1, 2 or 5 hereof are
applicable. Any settlement of such action, suit, or proceeding to which
Sections 1, 2 or 5 hereof are applicable must be approved by such person and
the corporation; provided, however, that the corporation's approval thereof
shall not be unreasonably withheld, and such approval by the corporation shall
be assumed if the corporation has not provided written notice to such person to
the contrary during the thirty (30) day period commencing upon delivery to the
corporation of written notice of such proposed settlement. The corporation and
the person seeking indemnification or advancement or reimbursement of expenses
hereunder shall cooperate in the defense of such action, suit or proceeding and
shall furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested by the corporation or such person. If the corporation
indemnifies a person hereunder, the corporation shall be subrogated to the
rights of such person to the extent of such indemnification.
18
<PAGE> 19
Section 9. Partial Indemnification and Advancement.
(a) If any action, suit or proceeding involves both (i)
claims by or in the right of the corporation and (ii) claims other
than claims by or in the right of the corporation, then
indemnification with respect to each type of claim shall be determined
separately, with the former claims being determined on the basis of
the standard of conduct set forth in Section 2 above and the latter
claims being determined on the basis of the standard of conduct set
forth in Section 1 above.
(b) If the person (including the Board of Directors,
independent legal counsel, the stockholders or a court) making the
determination under Section 4(a) shall determine that a person seeking
indemnification under Sections 1 or 2 hereof has met the applicable
standard of conduct as to some claims, issues or matters involved in
the action, suit or proceeding but not as to others, such person
making the determination shall reasonable pro rate the amounts (costs,
charges, expenses (including attorneys' fees), judgments, fines,
penalties and amounts paid in settlement) with respect to which
indemnification is sought by such person among such claims, issues or
matters. This Section 9(b) is intended to provide for proration not
only pursuant to Section 9(a) above, but also is between claims,
issues and matters that are involved in any particular action
proceeding (or suit or portion thereof) by or in the right of the
corporation or in any particular action, suit or proceeding (or
portion thereof) other than by or in the right of the corporation.
(c) In the event that it should be determined that an
officer or director of the corporation is entitled to partial, but not
full, indemnification under Sections 1, 2, and 3 of this Article, the
corporation shall make such indemnification to the fullest extent
permitted by such determination.
Section 10. Other Rights; Continuation of Right to
Indemnification; Funding; Certain Limitations.
(a) The indemnification and advancement and reimbursement
of expenses provided by this Article shall not be deemed exclusive of
any other rights to which a person seeking indemnification or
advancement or reimbursement of expenses may be entitled under any law
(common or statutory), bylaw, agreement, vote of stockholders or
directors, determination of a court, or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office, shall apply to claims, issues, matters or states
of facts occurring, accruing or existing prior to the adoption of this
Article, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the estate, heirs, executors, and administrators of such person.
(b) In consideration of the continued service by each
director, officer, employee and agent of the corporation and other
good and a able consideration, the receipt and sufficiency of which
are hereby acknowledged by the corporation, the corporation agrees
that the rights to indemnification and advancement and reimbursement
of expenses provided in these Bylaws and indemnification and
19
<PAGE> 20
advancement and reimbursement of expenses provided in the
corporation's Certificate of Incorporation shall constitute the
corporation and each such director, officer, employee and agent;
provided, however, that nothing contained herein shall prevent or
restrict the corporation's amending, altering or repealing these
Bylaws or the Certificate of Incorporation so as to change the
provisions thereof dealing with indemnification and advancement and
reimbursement of expenses or any other provisions thereof without the
consent of the directors, officers, employees and agents of the
corporation. Notwithstanding the foregoing, any such amendment shall
have only prospective effect, and each director, officer, employee or
agent entitled to indemnification or advancement or reimbursement of
expenses under the Bylaws or under the Certificate of Incorporation
shall have a fully vested right, indemnification and advancement or
reimbursement of expenses under the provisions of these Bylaws and the
Certificate of Incorporation as then in effect as to any claim, issue,
matter or state of facts occurring, accruing or existing while such
are in effect or prior thereto (even if an action, suit or proceeding,
claim, issue or matter is brought after the amendment, alteration or
repeal of any such provision), irrespective of any subsequent
amendment, alteration or repeal thereof.
(c) Notwithstanding any other provision of this Article,
he corporation shall indemnify the directors and officers of the
corporation to the fullest extent permitted by law, notwithstanding
that such indemnification may not be specifically authorized by the
provisions of the Article, by the corporation's Certificate of
Incorporation, or by statute. In the event of any changes, after the
date of adoption of this Article, in any applicable law, statute, or
rule that expand the right of a Delaware corporation to indemnify its
directors and/or offices, such changes shall be, ipso facto, within
the purview of the rights of the corporation's directors and officers,
and the obligations of the corporation, under the preceding sentence.
(d) The Board of Directors may also elect, by a majority
vote of a quorum of the Board of Directors, to fund its obligations
hereunder to vide indemnification or advancement or reimbursement of
expenses by any means, including, without limitation, maintenance of a
letter of credit or surety bond with respect thereto, assignment of
corporate assets for such purpose, establishment of a trust or escrow
therefor.
(e) Notwithstanding Section 1(a), Section 2(a) or Section
5(a) hereof, the corporation shall not be required to, but may in its
discretion, indemnify or advance or reimburse any expenses to, any
person under this Article in respect of any action, suit or proceeding
(i) brought, instituted or initiated by such person as plaintiff or
claimant, or (ii) brought, instituted or initiated against such person
in his or her capacity as a director or officer of the corporation or
a Subsidiary by any other person who is a director of the corporation
or a Subsidiary and in which the corporation or a Subsidiary is not a
party plaintiff. This provision shall not apply to (i) the filing of
an answer, response, counterclaim, cross-claim or similar pleading by
a person who would be entitled to indemnification or advancement or
reimbursement of expenses under this Article but for the preceding
sentence, in any action, suit or proceeding brought, instituted or
initiated by or on behalf of the corporation or a
20
<PAGE> 21
Subsidiary or (ii) an action, suit or proceeding to enforce a person's
rights under this Article.
Section 11. Insurance. The corporation may purchase and/or
maintain insurance on behalf of any person who is or was or has or had agreed
to become a director or officer of the corporation, or (while a director or
officer of the corporation) is ors serving or has or had agreed to serve at the
request of the corporation as an employee of the corporation or as a director,
officer, partner, venturer, proprietor, trustee, committee, administrator,
employee or agent of another corporation, partnership, joint venture, sole
proprietorship, trust or other enterprise, against any and all liability
asserted against him an incurred by him or on his behalf in any such capacity,
or arising out of his status as such, or otherwise, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of this Article, the Certificate of Incorporation or under any
statute, law or rule. Any such insurance to be maintained may provide
different terms with respect to the protection afforded thereunder to the class
of directors of the corporation and the class of officers of the corporation.
Section 12. Meaning of Terms. For purposes of this Article
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger that, if its separate
existence had continued, would have had power and authority to indemnify its
directors and/or officers, so that any person who is or was a director of such
constituent corporation, or (while a director or officer of the corporation) is
or was serving at the request of such constituent corporation as an employee or
agent of the corporation or as a director, officer, partner, venturer,
proprietor, trustee, committee member, administrator, employee or agent of
another corporation, partnership, joint venture, sole proprietorship, trust or
other enterprise, shall stand in the same position under the provisions of the
Article with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had
continued. For purposes of this Article, references to "other enterprises"
shall include employee benefit plans, reference to "fines" shall include an
excise taxes assessed to a person with respect to an employee benefit plan, and
references corporation" shall include any service by a director, officer,
employee or agent of the corporation that imposes duties upon, or involves
services by, such director, respect to any employee benefit plan maintained in
who corporation and/or its subsidiaries, its participants, or beneficiaries.
For purposes of this Article, a person who acted in good faith in a manner he
reasonably, at the request of the of the corporation employee or agent with for
employees of the corporation and/or its subsidiaries, its participants, or
beneficiaries of an employee benefit plan shall e deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Article.
Section 13. Savings Clause. If this Article or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, the corporation shall nevertheless indemnify each director or
officer of the corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the corporation, to
the fullest extent permitted by
21
<PAGE> 22
any applicable portion of this Article that shall not have been so invalidated,
and to the fullest extent permitted by applicable law. If any provision hereof
should be held, by a court of competent jurisdiction, to be invalid, such
provision shall be limited only to the extent necessary to make such provision
enforceable, it being the intent of the Bylaws to indemnify each individual who
serves or has served or who has or had agreed to serve as a director or officer
of the corporation to the maximum extent permitted by law.
22
<PAGE> 1
EXHIBIT (4)
RIGHTS AGREEMENT
Agreement, dated as of May 1, 1996, between Republic Group
Incorporated, a Delaware corporation (the "Company"), and UMB Bank, N.A., as
agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one common stock purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding on May 16,
1996, each Right representing the right to purchase one share of Common Stock
of the Company, upon the terms and subject to the conditions herein set forth,
and has further authorized the issuance of one Right with respect to each share
of Common Stock that shall become outstanding between May 16, 1996 and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are defined in Sections 3 and 7 hereof).
Accordingly, 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 and Associates (as such terms are hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of shares of Common Stock that constitute 15% or
more of the total number of shares of Common Stock then outstanding,
but shall not include the Company, any wholly-owned Subsidiary (as
such term is hereinafter defined) of the Company or any employee
benefit plan of the Company or any Subsidiary of the Company or any
entity holding shares of Common Stock for or pursuant to the terms of
such plan or any Exempt Person (but, in the case of an Exempt Person,
only to the extent of any shares of Common Stock (i) Beneficially
Owned by such Exempt Person on the date of this Agreement or (ii)
acquired by such Exempt Person after the date of this Agreement from
any other Exempt Person if such shares have been Beneficially Owned
only by Exempt Persons (except as otherwise contemplated by the last
sentence of Section 1(i) of this Agreement) on and after the date of
this Agreement). Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of shares
of Common Stock by the Company which by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the shares of Common Stock of
the Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of shares of Common Stock that
constitute 15% or more of the shares of Common Stock 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 shares of Common Stock of the
Company (other than, in the case of an Exempt Person, shares of Common
Stock Beneficial Ownership of which was acquired by such Exempt Person
from another Exempt Person if such shares have been Beneficially Owned
only by
<PAGE> 2
Exempt Persons (except as otherwise contemplated by the last sentence
of Section 1(i) of this Agreement) on and after the date of this
Agreement), then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise
be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such
term 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.
"Associate," used to indicate a relationship with any Person,
shall mean (i) any corporation or organization (other than the Company
or a direct or indirect Subsidiary of the Company) of which such
Person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity
securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a
trustee or in a similar fiduciary capacity, and (iii) any relative or
spouse of such Person, or any relative of such spouse, who has the
same principal residence as such Person.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance
-2-
<PAGE> 3
with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) 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.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the Kansas
City, Missouri Federal Reserve District 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. Hutchinson, Kansas time, on such date; provided, however, that if
such a date is not a Business Day it shall mean 5:00 p.m., Hutchinson,
Kansas time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the
Company shall mean shares of Common Stock, $1.00 par value, of the
Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately controls such first-mentioned Person.
(g) "Continuing Director" shall mean (i) 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 of an Acquiring
Person or of any such Affiliate or Associate, and was a member of the
Board prior to the date of this Agreement, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is a
member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing
Directors.
(h) "Distribution Date" shall have the meaning assigned
to it in Section 3 hereof.
-3-
<PAGE> 4
(i) "Exempt Persons" shall mean, at any particular time,
all Persons falling within any one or more of categories (i) through
(vi) below:
(i) Phil Simpson;
(ii) Lorraine Simpson;
(iii) lineal descendants (including persons adopted
into the line of descent) of Phil Simpson and Lorraine
Simpson;
(iv) spouses of such lineal descendants, including
surviving spouses of deceased lineal descendants and excluding
divorced former spouses of lineal descendants;
(v) trusts or estates of which the principal
beneficiary or beneficiaries are Persons falling within any
one or more of categories (i) through (iv) above and
fiduciaries of such trusts or estates in their capacities as
fiduciaries; or
(vi) partnerships (including limited partnerships
and limited liability partnerships), limited liability
companies, corporations, and other entities of which Persons
falling within any one or more of categories (i) through (v)
above Beneficially Own partnership interests or membership
interests possessing at least eighty percent (80%) of the
interest in profits and losses or of the capital of the
partnership or limited liability company, shares possessing at
least eighty percent (80%) of the total voting power of the
capital stock of the corporation, or equity interests
representing at least eighty percent (80%) of the total equity
interests of any other entity.
The fact that one or more beneficiaries of a trust or estate falling
within category (v) above who are not Persons falling within
categories (i) through (iv) above may be deemed to be a Beneficial
Owner of all or a portion of the shares of Common Stock beneficially
owned by such trust or estate solely by reason of being a beneficiary
or beneficiaries thereof shall not remove such trust or estate from
the category of Exempt Person if Persons falling within categories (i)
through (iv) are the principal beneficiary or beneficiaries of such
trust or estate.
(j) "Final Expiration Date" shall have the meaning
assigned to it in Section 7(a).
(k) "Person" shall mean any individual, firm,
corporation, partnership, trust, limited liability company or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(l) "Principal Party" shall have the meaning assigned to
it in Section 13.
-4-
<PAGE> 5
(m) "Redemption Date" shall have the meaning assigned to
it in Section 7(a).
(n) "Purchase Price" shall have the meaning assigned to
it in Section 4.
(o) "Redemption Price" shall have the meaning assigned to
it in Section 23.
(p) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(q) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the shares of 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 day after the
Stock Acquisition Date or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date of
commencement of, or first public announcement of the intent of any
Person (other than the Company, any wholly-owned Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding shares of Common Stock for or
pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person
becoming 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 such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provision of paragraph (b) of this Section 3) by the certificates for
shares of Common Stock registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer
of Common Stock. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, postage-prepaid mail, to
each record holder of Common 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 A hereto (a "Right Certificate"), evidencing one Right for
each share of Common Stock
-5-
<PAGE> 6
so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On May 16, 1996 or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Common
Stock, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each
record holder of Common Stock as of the Close of Business on May 16,
1996, at the address of such holder shown on the records of the
Company. With respect to certificates for shares of Common Stock
outstanding as of May 16, 1996, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights.
Until the Distribution Date (or the earlier of the Redemption Date or
Final Expiration Date), the surrender for transfer of any certificate
for shares of Common Stock outstanding on May 16, 1996, with or
without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the shares of
Common Stock represented thereby.
(c) Certificates issued after May 16, 1996 but prior to
the earlier of the Distribution Date or the Redemption Date or the
Final Expiration Date representing shares of Common Stock shall have
impressed on, printed on, written on or otherwise affixed to them a
legend in substantially the following form:
This certificate also evidences and entitles the holder hereof
to certain rights ("Rights") as set forth in a Rights
Agreement between Republic Group Incorporated and UMB Bank,
N.A., as Rights Agent, dated as of May 1, 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 Republic Group Incorporated. 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. Republic
Group Incorporated will mail to the holder of this certificate
a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as
set forth in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as defined in the Rights
Agreement) may become null and void.
With respect to such certificates containing a legend in
substantially the foregoing form, until the Distribution Date, the
Rights associated with the shares of Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.
-6-
<PAGE> 7
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase shares of Common Stock and of assignment to
be printed on the reverse thereof) shall be substantially the same as Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
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 or 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,
in each such case, on their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the
price per share set forth therein (the "Purchase Price"), but the number of
such shares of Common Stock and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Executive Vice President, Senior Vice President or Vice
President, and by the Secretary, an Assistant Secretary, Treasurer or an
Assistant Treasurer of the Company, either manually or by facsimile signature,
and have affixed thereto the Company's seal or a facsimile thereof. The Right
Certificates shall not be valid for any purpose unless countersigned by the
Rights Agent. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal offices, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder
-7-
<PAGE> 8
to purchase a like number of shares of Common Stock as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing in a form acceptable to, and
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. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of any such surrendered Right Certificate until the registered holder shall
have completed and signed the certificate contained in the form of assignment
on the reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall 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 the Rights Agent 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 the Rights Agent, 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 Rights Agent will
make and deliver a new Right Certificate of like tenor 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) 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 Purchase Price for each share of Common Stock as to
which the Rights are exercised, at or prior to the Close of Business
on the earliest of (i) the Close of Business on May 16, 2006 (the
"Final Expiration Date"), or (ii) the date on which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or
(iii) the time at which such Rights are exchanged as provided for in
Section 24 hereof.
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall be, as of May 16, 1996,
$45.00, 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,
and as of May 16, 1996 each Right shall entitle the holder thereof to
purchase one share of Common Stock, subject to the terms and
conditions herein set forth.
-8-
<PAGE> 9
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares
to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 in cash, or by certified check or cashier's
check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the
Common Stock certificates for the number of shares of Common Stock to
be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates, cause
the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby,
a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized
assignee, subject to the provisions of Section 14 hereof.
(e) 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 Right 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 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
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 Common Stock. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock or any shares of Common
Stock held in its treasury, the
-9-
<PAGE> 10
number of shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Rights.
So long as the Common Stock issuable 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.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Stock delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
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 shares of Common Stock upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuances or delivery of certificates for the shares of Common Stock in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates for
shares of Common 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. Common Stock Record Date. Each person in whose name any
certificate for shares of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Common Stock 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 Common Stock transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding business
day on which the Common Stock 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 stockholder of the Company for which
the Rights shall he 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 of Common Stock covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
-10-
<PAGE> 11
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Common Stock payable in Common Stock, (B) subdivide the
outstanding Common Stock, (C) combine the outstanding Common
Stock into a smaller number of shares of Common Stock or (D)
issue any shares of its capital stock in a reclassification of
the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Common 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; 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 Common
Stock issuable upon exercise of one Right. 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) Subject to Section 24 of this Agreement, in
the event any Person becomes an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of shares of Common Stock for
which a Right is then exercisable, in accordance with the
terms of this Agreement such number of shares of Common Stock
as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of shares of Common Stock
for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price
of the Company's Common Stock determined pursuant to Section
11(d) hereof on the date of the occurrence of such event;
provided, however, that if the transaction that would
otherwise give rise to the adjustment is also subject to the
provisions of Section 13, then only the provisions of Section
13 shall apply and no adjustment shall be made pursuant to
this Section 11 (a)(ii). In the event that any Person shall
become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall be void and any holder
-11-
<PAGE> 12
of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate;
and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person or any Associate or Affiliate
whose Rights would be void pursuant to the preceding sentence
shall be cancelled.
(iii) In the event that there shall not be
sufficient Common Stock issued but not outstanding or
authorized but unissued 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 Common Stock for issuance upon exercise
of the Rights.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Stock (or shares
having the same rights, privileges and preferences as the Common Stock
("equivalent common stock")) or securities convertible into Common
Stock or equivalent common stock at a price per share of Common Stock
or equivalent common stock (or having a conversion price per share, if
a security convertible into Common Stock or equivalent common stock)
less than the current per share market price of the Common Stock (as
defined in Section 11(d)) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock and/or equivalent common stock so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number
of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock and/or equivalent common
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 Common Stock issuable upon exercise of one Right. In
case such subscription price may be paid in 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 Common Stock owned
by or
-12-
<PAGE> 13
held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Common 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 (i) a regular periodic cash
dividend the record date for which occurs at a time when there is no
Acquiring Person or (ii) a regular periodic cash dividend, the record
date for which occurs at a time when there is an Acquiring Person, at
a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid or (iii) a dividend payable in Common Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the current per share market price of the Common Stock
(as defined in Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Common Stock and the denominator
of which shall be such current per share market price of the Common
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 Common Stock issuable 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) For the purpose of any computation hereunder, the
"current per share market price" of the Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of
the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of a dividend or
distribution on such Common Stock payable in such shares of Common
Stock or securities convertible into such shares of Common Stock and
prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, then, and in each such case, the
current market price shall be appropriately adjusted to reflect the
current market price per Common Stock equivalent. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
-13-
<PAGE> 14
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading, or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market
("NASDAQ") or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares of Common
Stock selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday
or Friday on which the New York Stock Exchange is not closed. If the
Common Stock is not publicly held or is not so listed or traded,
"current market price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and 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 requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (c), inclusive, and the provisions
of Sections 7, 9, 10 and 13 with respect to the shares of Common 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
-14-
<PAGE> 15
purchase, at the adjusted Purchase Price, the number of shares of
Common 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 shares of Common Stock
(calculated to the nearest ten- thousandth) obtained by (i)
multiplying the number of shares covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common
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 shares of Common 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 adjustment of the Purchase Price.
The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record
date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the manner provided for herein and shall be registered
in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
-15-
<PAGE> 16
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable upon
the exercise of the rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share
and the number of shares 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 the then par value, if
any, of the shares of Common 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 shares of
Common 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, of the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the shares of Common 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 the Common Stock, issuance wholly for
cash, if any, of Common Stock at less than the current market price,
issuance wholly for cash of Common Stock or securities which by their
terms are convertible into or exchangeable for Common Stock, dividends
on Common Stock payable in Common Stock or issuance of rights, options
or warrants referred to hereinabove in subsection (b) of this Section
11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such stockholders.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 26 hereof.
-16-
<PAGE> 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person, (i) the Company shall
consolidate with, or merge with and into, any other Person, (ii) any
Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or
part of the Common 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 (iii) 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
other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provisions shall be
made so that (A) each holder of a Right (except as otherwise provided
therein) shall thereafter have the right to receive, upon the exercise
thereof, at a price equal to the then current Purchase Price, in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (including the Company
as successor thereto or as the surviving corporation), unencumbered
and not subject to any liens, encumbrances, rights of first refusal or
other adverse claims as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable (without taking
into account any adjustment previously made pursuant to Section
11(a)(ii)) and dividing that product by (2) 50% of the current per
share market price of the Common Stock of the Principal Party
(determined pursuant to Section 11(d)) on the date of consummation of
such consolidation, merger, sale or transfer; (B) 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; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the
occurrence of such consolidation, merger or transfer; and (D) 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 practicable, in relation
to the shares of its Common Stock thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (i) or (ii) 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
-17-
<PAGE> 18
in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in
clause (iii) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (x) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(y) in case such person is a subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are
and have been so registered "Principal Party" shall refer to whichever
of such Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not enter into any transaction of
the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any Agreement or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement so providing 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, with respect to the
Rights and securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act of 1933, as
amended) until the Final Expiration Date and to similarly comply with
applicable state securities laws; (ii) use its best efforts to list
(or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities exchange; and
(iii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 (or any successor form) under the Securities Exchange Act of 1934,
as amended. The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other transfers.
-18-
<PAGE> 19
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 as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of 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 shall pay to
the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Common Stock.
For purposes of this Section 14(b), the current market value of a
share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section 11(d))
for the Trading Day immediately prior to the date of such exercise.
(c) 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, excepting the rights of actions given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution
-19-
<PAGE> 20
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. 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 accompanied by
a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
recorded on the books for registration and transfer of the Rights (or,
the Common Stock) 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 shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common 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 stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
-20-
<PAGE> 21
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, including its members, stockholders, directors, officers, employees and
agents, for, and to hold it harmless agai nst any loss, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the shares of Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified, guaranteed or
acknowledged, by the proper person or persons, or otherwise upon the advice of
its counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign on such Right Certificates either in its
-21-
<PAGE> 22
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 only
the specific duties and obligations imposed by this Agreement (and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent) upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent, and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the 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 Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right
-22-
<PAGE> 23
Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Common Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(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 stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys 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) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) The Rights Agent shall have no responsibility to the
Company, any holders of Rights or any holders of shares of Common
Stock for interest or earnings on any monies held by the Rights Agent
pursuant to this Agreement, except as
-23-
<PAGE> 24
otherwise specifically agreed in a separate writing by the Company and
the Rights Agent.
(l) The Rights Agent shall not be required to take notice
or be deemed to have notice of any event or condition hereunder,
including, but not limited to, a Distribution Date, a Redemption Date,
any adjustment of the Purchase Price of the Common Stock, the
existence of an Acquiring Person or any other event or condition that
may require action by the Rights Agent, unless the Rights Agent shall
be specifically notified in writing of such event or condition by the
Company, and all notices or other instruments required by this
Agreement to be delivered to the Rights Agent must, in order to be
effective, be received by the Rights Agent as specified in Section 26
hereof, and in the absence of such notice so delivered, the Rights
Agent may conclusively assume no such event or condition exists.
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 shares of Common Stock by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the shares of 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 or the Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the States of Texas, Missouri, Kansas, New York or Delaware
(or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in any of the States of
Texas, Missouri, Kansas, New York or Delaware), in good standing, having a
principal office in any of the States of Texas, Missouri, Kansas, New York or
Delaware, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million and which is not an
Acquiring Person, or an Affiliate or Associate thereof. After appointment, the
predecessor Rights Agent shall be discharged of any and all duties and
obligations arising or accruing after such appointment, and 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
-24-
<PAGE> 25
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 shares of 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.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its
option, at any time prior to such time as any person becomes an
Acquiring Person, redeem all but not less than all 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").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Within 10 days after
the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the
holders of 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 or in Section 24 hereof, and other than in
connection with the purchase of shares of Common Stock prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all
or part of the then
-25-
<PAGE> 26
outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit Plan of the Company or any such
Subsidiary, or any entity holding shares of Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the voting power of the shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange by first class mail to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state
the method by which the exchange of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange
of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For
purposes of this paragraph (d), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second
-26-
<PAGE> 27
sentence of Section 11(d) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall
propose (a) to pay any dividend payable in stock of any class to the holders of
its Common Stock or to make any other distribution to the holders of its Common
Stock (other than a regular quarterly cash dividend) or (b) to offer to the
holders of its Common Stock rights or warrants to subscribe for or to purchase
any additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Common Stock (other than a reclassification involving only the subdivision
of outstanding shares of Common 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 Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common 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 20
days prior to the record date for determining holders of the Common Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common 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 Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made upon
receipt by the Company if sent by certified or registered mail, return receipt
requested, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Republic Group Incorporated
P.O. Box 1307
Hutchinson, Kansas 67504-1307
Attention: Secretary
-27-
<PAGE> 28
Subject to the provisions of Section 21 hereof, any notice of demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
upon receipt by the Rights Agent if sent by certified or registered mail,
return receipt requested, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
UMB Bank, N.A., as Rights Agent
P.O. Box 410064
Kansas City, MO 64141-0064
Attention: Securities Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books for the Right Certificates of the Company.
Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions or changes in regard
to matters or questions arising hereunder, which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however, that from and
after such time as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the interests of the
holders of Right Certificates. Without limiting the foregoing, the Company may
at any time prior to such time as any Person becomes an Acquiring Person amend
this Agreement to lower the threshold set forth in Section 1(a), to not less
than the greater of (a) a percentage determined by the Board of Directors that
is greater than the largest percentage of the outstanding shares of Common
Stock then known by the Company to be beneficially owned by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any Subsidiary of the Company or any entity holding shares of
Common Stock for or pursuant to the terms of any such Plan or any Exempt Person
(but, in the case of an Exempt Person, only to the extent of any shares of
Common Stock (i) Beneficially Owned by such Exempt Person on the date of this
Agreement or (ii) acquired by such Exempt Person after the date of this
Agreement from any other Exempt Person if such shares have been Beneficially
Owned only by Exempt Persons (except as otherwise contemplated by the last
sentence of Section 1(i) of this Agreement) on and after the date of this
Agreement)) and (b) 10%. Prior to the consent of the Rights Agent to any
supplement or amendment to this Agreement, the Rights Agent may require that an
opinion of counsel stating that such supplement or amendment is authorized or
permitted by the Agreement, complies with its respective terms, will, upon the
execution and delivery thereof, be valid and binding upon the Company in
accordance with its terms.
-28-
<PAGE> 29
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. 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 (and, prior to the Distribution Date, the
Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
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 Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Gender. References made herein to any party's gender are
made as a matter of convenience only and shall be construed to refer to either
gender.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-29-
<PAGE> 30
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: REPUBLIC GROUP INCORPORATED
By /s/ Shere L. Munsey By /s/ Phil Simpson
------------------------ ------------------------------------
Assistant Secretary Phil Simpson, Chairman of the Board
and Chief Executive Officer
Attest: UMB BANK, N.A., AS RIGHTS AGENT
By /s/ Fred D. Deay II By /s/ Frank C. Bramwell
------------------------ ------------------------------------
Assistant Secretary Vice President
-30-
<PAGE> 31
Exhibit A
[Form of Right Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER MAY 16, 2006 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES.,
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN Section
1(a) OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HERE BY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN Section 11(a)(ii) OF THE RIGHTS AGREEMENT.]*
Right Certificate
REPUBLIC GROUP INCORPORATED
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 May 1, 1996 (the "Rights
Agreement") between Republic Group Incorporated, a Delaware corporation (the
"Company"), and UMB Bank, N. A., as rights agent (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 the earliest of (i) 5:00 p.m.
(Hutchinson, Kansas time) on May 16, 2006, (ii) the date upon which the Rights
are redeemed as provided in Section 23 of the Rights Agreement or (iii) the
time at which such Rights are exchanged as provided for in Section 24 of the
Rights Agreement, at the principal office of the Rights Agent, or at the office
of its successors as Rights Agent, one fully paid, nonassessable share of
Common Stock of the Company, at a purchase price of $45.00 per share of Common
Stock (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 of Common
Stock 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 May 16, 1996, based on the Common Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock 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.
__________________________________
* The portion of the legend in brackets shall be inserted only if
applicable.
<PAGE> 32
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of Republic
Gypsum Company, and the above-mentioned offices 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 evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be (i) redeemed by the
Company at a redemption price of $.01 per Right or (ii) exchanged in whole or
in part for shares of Common Stock.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common 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 obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
<PAGE> 33
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________________ , 19 ______.
REPUBLIC GROUP INCORPORATED
Attest:
By:____________________________ By:_____________________________
Title: Secretary Phil Simpson, Chairman
of the Board and Chief
Executive Officer
Countersigned:
UMB BANK, N.A., AS RIGHTS AGENT
By:___________________________________
Authorized Signature
<PAGE> 34
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns
and transfers unto __________________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does 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: ______________________________________________ , 19 _____.
_______________________
*Signature
**Signature Guaranteed:
____________________________________
____________________________________
+ Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate ____ is ____ is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined 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
**Signature Guaranteed:
____________________________________
____________________________________
<PAGE> 35
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: REPUBLIC GROUP INCORPORATED
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such shares of Common Stock be issued in the name of:
Please insert social security
or other identifying number
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: _______________________________________________, 19 ___ .
_______________________
*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 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
**Signature Guaranteed:
____________________________________
____________________________________
<PAGE> 36
[Form of Reverse Side of Right Certificate -- continued]
NOTICES
* The signatures in the foregoing Forms of Assignment and
Election 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.
** Signatures must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (12CFR 240.17 Ad-15) or any similar
rule which the Rights Agent deems applicable.
+ In the event the certification set forth above in the Forms of
Assignment and Election is not completed, neither the Rights Agent nor the
Company will be obligated to effect any assignment or election to purchase and
may deem the beneficial owner of the Rights evidenced by this Right Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement) and, in the case of any Assignment, may affix a legend to
that effect on any Right Certificates issued in exchange for this Rights
Certificate.
<PAGE> 37
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On April 30, 1996, the Board of Directors of Republic Group
Incorporated (the "Company") declared a dividend distribution of one common
stock purchase right (a "Right") for each outstanding share of common stock,
$1.00 par value (the "Common Stock"), of the Company. The distribution is
payable on May 16, 1996 to the stockholders of record at the close of business
on that date. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a price of $45.00 per share of Common
Stock (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 UMB Bank, N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, any wholly-owned subsidiary of the Company, any employee
benefit plan of the Company or any such subsidiary, any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or any Exempt
Person (as described below) but, in the case of an Exempt Person, only to the
extent of any shares of Common Stock (x) beneficially owned by such Exempt
Person on the date of the Rights Agreement or (y) acquired by such Exempt
Person after the date of the Rights Agreement from any other Exempt Person if
such shares have been beneficially owned only by Exempt Persons on and after
the date of the Rights Agreement) (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common Stock, or (ii) 10
business days (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)
following the commencement or announcement of an intention to make a tender or
exchange offer the consummation of which would result in any person becoming 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 May 16, 1996, by such Common Stock certificates
with a copy of this Summary of Rights attached thereto. (An Exempt Person
includes any of Phil or Lorraine Simpson, their descendants and their
descendants' spouses, trusts or estates for any of their benefits,
partnerships, corporations or other entities 80%-owned by any of them.)
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 May 16, 1996 upon transfer or new
issuance of shares of 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
certificates for Common Stock, outstanding as of May 16, 1996, even without
such notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights
<PAGE> 38
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 shares
of 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 May 16, 2006, unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or exchanged by the Company
as described below.
The Rights are protected by customary antidilution provisions. The
Purchase Price payable, and the number of shares of Common 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 Common
Stock, (ii) upon the grant to holders of the shares of Common Stock of certain
rights or warrants to subscribe for shares of Common Stock or convertible
securities at less than the current market price of the Common Stock or (iii)
upon the distribution to holders of shares of Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends thereafter
and, if there is an Acquiring Person, not exceeding 125% of the prior regular
periodic cash dividend, or dividends payable in shares of Common Stock) or of
subscription rights or warrants (other than those referred to above).
Subject to certain exchange rights that may be exercised by the Board
of Directors, in the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right (other than Rights
held by the Acquiring Person (which will thereafter be void)) shall thereafter
have the right (automatically upon exercise thereof) to receive that number of
shares of Common Stock having a market value of two times the Purchase Price.
In the event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its consolidated assets or earning
power were sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the Acquiring Person
which at the time of such transaction would have a market value of two times
the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued and
in lieu thereof a payment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
-2-
<PAGE> 39
At any time prior to such time as any person or group becomes an
Acquiring Person, 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"). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
At any time after any person or group becomes an Acquiring Person, the
Board of Directors may exchange all or part of the outstanding and exercisable
Rights (other than Rights owned by such person or group which have become void)
for Common Stock at an exchange ratio of one share of Common Stock per Right,
as may be adjusted from time to time to reflect any stock split, stock dividend
or similar transaction (the "Exchange Right"). Notwithstanding the above, the
Board of Directors may not exercise the Exchange Right after any person,
together with any associate or affiliate of such person, has become the
beneficial owner of 50% or more of the voting power of the shares of Common
Stock. Immediately upon the action of the Board of Directors ordering the
exchange of the Rights, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive that number of shares of
Common Stock equal to the number of Rights held by such holders multiplied by
the exchange ratio.
The terms of the Rights may be amended by the Company without the
consent of the holders of the Rights, including an amendment to lower the
threshold described above to not less than the greater of (i) a percentage
determined by the Board of Directors that is greater than the largest
percentage of the outstanding Common Shares then known to the Company to be
beneficially owned by any person or group (other than excepted persons
discussed above) and (ii) 10%, except that from and after such time as any
person or group becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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
May 1, 1996. A copy of the Rights Agreement is available free of charge from
the Rights Agent. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
-3-
