<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SERV-TECH, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1398757
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
5200 CEDAR CREST BLVD.
HOUSTON, TEXAS 77087
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- - ------------------------- -----------------------------------
COMMON STOCK PURCHASE RIGHTS NASDAQ NATIONAL MARKET SYSTEM
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1), please
check the following box. [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant to
General Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
<PAGE> 2
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On November 16, 1995, the Board of Directors of Serv-Tech, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of the Company's Common Stock, par value $.50 per share ("Common Stock"),
to shareholders of record at the close of business on November 28, 1995 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one unit (a "Unit"), consisting initially of one share of Common Stock,
at a Purchase Price of $50.00 in cash per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement"), dated as of November 16, 1995, between the Company and
Society National Bank, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock upon the date which is the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of Common Stock (the
earlier of said dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after the
Record Date will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Stock outstanding also will constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 16, 2005, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
With certain exceptions, in the event that at any time following the
Distribution Date, (i) the Company is the surviving corporation in a merger
with an Acquiring Person and its Common Stock is not changed or exchanged, (ii)
a Person becomes the beneficial owner of 15% or more of the then outstanding
shares of Common Stock (except pursuant to an offer for all outstanding shares
of Common Stock which the Continuing Directors (as defined below) determine to
be fair and otherwise in the best interests of the Company and its shareholders
(other than the Acquiring
-2-
<PAGE> 3
Person)), (iii) an Acquiring Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, or (iv) during such time as
there is an Acquiring Person, an event occurs which results in such Acquiring
Person's ownership interest being increased by more than 1% (e.g., a reverse
stock split), each holder of a Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company, subject to certain limitations) having a value
equal to two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void. However, Rights are not exercisable following the occurrence of
any of the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $50.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase
$100.00 worth of Common Stock (or other consideration, as noted above) for
$50.00. Assuming that the Common Stock had a per share value of $20.00 at such
time, the holder of each valid Right would be entitled to purchase 5 shares of
Common Stock for $50.00.
With certain exceptions, in the event that, at any time following the
Stock Acquisition Date, (i) the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
corporation or where the Company is the surviving corporation and all or part
of the outstanding shares of Common Stock are changed into or exchanged for
stock or other securities of any other person or cash or any other property
(other than a merger described in subclause (i) of the second preceding
paragraph or a merger which follows an offer described in the parenthetical in
subclause (ii) of the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a
Right (except rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right.
For example, at an exercise price of $50.00 per Right, each Right
following an event set forth in the preceding paragraph would entitle its
holder to purchase $100.00 worth of common stock of the acquiring company for
$50.00. Assuming that the common stock of the acquiring company had a per
share value of $20.00 at such time, the holder of each issued Right would be
entitled to purchase 5 shares of the common stock of the acquiring company for
$50.00.
The Purchase Price payable, and the number of shares of Common Stock
(or the number and kind of other securities or property, as the case may be)
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) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market
price of the Common Stock, or
-3-
<PAGE> 4
(iii) upon the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional shares of Common Stock
and in lieu thereof an adjustment in cash will be made. For fractional shares
of Common Stock, the adjustment will be based on the market price of the Common
Stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at any time until ten days following the Stock Acquisition Date, at a
price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Under certain circumstances set
forth in the Rights Agreement, the decision to redeem requires the concurrence
of a majority of the Continuing Directors. After the redemption period has
expired, the Company's right of redemption may be reinstated, with the
concurrence of a majority of the Continuing Directors, (i) if an Acquiring
Person reduces its beneficial ownership to 5% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company, or (ii) provided that such redemption is incidental to a merger or
other business combination transaction or series of transactions involving the
Company but not involving an Acquiring Person or any person who was an
Acquiring Person or any affiliate or associate thereof. Immediately upon the
action of the Board of Directors ordering redemption of the Rights with, where
required, the concurrence of the Continuing Directors, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 per Right redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person or an affiliate or
associate of an Acquiring Person or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of an acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date, but
amendments of those provisions relating to the principal economic terms of the
Rights require approval of a majority of the Continuing Directors. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Continuing
-4-
<PAGE> 5
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are not
redeemable.
The Rights Agreement 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 thereto.
ITEM 2. EXHIBITS.
Exhibit 1 Rights Agreement between Serv-Tech, Inc. and Society
National Bank, as Rights Agent, dated as of November
16, 1995, which includes as Exhibit A the form of
Rights Certificate and as Exhibit B the Summary of
Rights to Purchase Common Stock.
-5-
<PAGE> 6
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Date: November 27, 1995 SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
-------------------------------------
Richard L. Daerr
President and Chief Executive Officer
-6-
<PAGE> 7
INDEX TO EXHIBITS
Exhibit 1 Rights Agreement between Serv-Tech, Inc. and Society
National Bank, as Rights Agent, dated as of November
16, 1995, which includes as Exhibit A the form of
Rights Certificate and as Exhibit B the Summary of
Rights to Purchase Common Stock.
<PAGE> 1
EXHIBIT 1
- - --------------------------------------------------------------------------------
RIGHTS AGREEMENT
between
SERV-TECH, INC.
and
SOCIETY NATIONAL BANK, as
Rights Agent
Dated as of November 16, 1995
- - --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . 10
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . 11
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . 13
9. Reservation and Availability of Common Stock . . . . . . . . . . . . . . . . . . . . . . 13
10. Record Date for Securities Issued Upon Exercise . . . . . . . . . . . . . . . . . . . . 14
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights . . . . . . 15
12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . 25
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . 25
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . 29
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17. Rights Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . 31
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . 31
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 35
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
27. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
28. Determinations and Actions by the Board of Directors, etc. . . . . . . . . . . . . . . . 39
29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
ii
<PAGE> 4
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 16, 1995, between SERV-TECH,
INC., a Texas corporation (the "Company"), and Society National Bank, a
national banking association (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on November 16, 1995 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of Common Stock (as
hereinafter defined) of the Company outstanding at the Close of Business (as
hereinafter defined) on November 28, 1995 (the "Record Date"), and the Board of
Directors of the Company has further authorized the issuance of one Right
(subject to adjustment as provided herein) for each share of Common Stock of
the Company issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the earlier of the Distribution Date
and the Expiration Date (as hereinafter defined), each Right initially
representing the right to purchase one unit (a "Unit"), each Unit consisting
initially of one (1) share of Common Stock upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto 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
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 hereinafter defined) of 10% or more of the shares of Common Stock
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary
(as hereinafter defined) of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan, (v) any Person who notifies the Board of Directors in writing
within five days after the acquisition making such Person the Beneficial Owner
of 10% or more of the shares of Common Stock then outstanding that such
acquisition was inadvertent, and who within two days after such notification
divests a sufficient number of shares of Common Stock so that such Person is no
longer the Beneficial Owner of 10% or more of the shares of Common Stock then
outstanding ("Inadvertent Acquisition"), (vi) an underwriter that acquires such
percentage of the shares of Common Stock pursuant to a customary agreement in a
public offering of such Common Stock, or (vii) any Person who or which,
together with all Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of such
shares of Common Stock of the
1
<PAGE> 5
Company, the beneficial ownership of which was acquired by such Person pursuant
to any action or transaction or series of related actions or transactions
approved by a majority of the Continuing Directors before such Person otherwise
became an Acquiring Person or (B) a reduction in the number of issued and
outstanding shares of Common Stock of the Company pursuant to a transaction or
series of related transactions approved by a majority of the Continuing
Directors; provided further, however, that in the event that such Person
described in the foregoing clause (vii) does not become an Acquiring Person by
reason of subclause (A) or (B) of said clause (vii), such Person shall
nonetheless become an Acquiring Person in the event such Person thereafter
acquires beneficial ownership of an additional 1% of the Common Stock of the
Company, unless the acquisition of such additional Common Stock would not result
in such Person becoming an Acquiring Person by reason of subclause (A) or (B) of
said clause (vii). If any of these exceptions to the definition of an Acquiring
Person apply, then the Person to whom the exception pertains shall not be an
Acquiring Person for any purpose under this Agreement, including, without
limitation, with respect to the definitions of Distribution Date, Section
11(a)(ii) Event, Section 13 Event, Stock Acquisition Date and Triggering Event.
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined), as in effect on
the date of this Agreement.
(e) "Agreement" shall mean this Rights Agreement as
originally executed or as it may from time to time be supplemented or amended
pursuant to the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right or
obligation to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event (as hereinafter defined), or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such
Person or any of such
2
<PAGE> 6
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Sections 3(a) or 22 hereof (the "Original Rights")
or pursuant to Section 11(i) herein in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement), including
pursuant to any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement, arrangement
or understanding to vote such security if such agreement, arrangement
or understanding, (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (f)) or disposing of any voting
securities of the Company.
(g) "Board" shall mean the Board of Directors of the
Company.
(h) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the States of Texas
or New York are authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00
P.M., New York time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.
(j) "Common Stock" shall mean the common stock, par value
$.50 per share, of the Company, except that "Common Stock," when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interests having power to control or direct the management, of such
Person, or, if such Person is a Subsidiary of another Person, of the Person
which ultimately controls such first-mentioned Person and which has issued and
outstanding such capital stock, equity securities or equity interests.
3
<PAGE> 7
(k) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Company" shall mean the Person named as the "Company"
in the first paragraph of this Agreement until a successor corporation shall
have become such or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the Company
hereunder, pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor corporation or Principal Party.
(m) "Continuing Director" shall mean (i) any member of
the Board, while such Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of such Person, or a representative of any
such 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 of any
such Person, or a representative of any such Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
(n) "Current Market Price" shall have the meaning set
forth in Section 11(d) hereof.
(o) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(p) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(q) "Equivalent Common Stock" shall have the meaning set
forth in Section 11(b) hereof.
(r) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(s) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(t) "Final Expiration Date" shall mean the Close of
Business on November 16, 2005.
(u) "Original Rights" shall have the meaning set forth in
Section 1(f)(i) hereof.
(v) "Person" shall mean any individual, firm,
corporation, partnership or other entity, as well as any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act.
4
<PAGE> 8
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(y) "Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(z) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(aa) "Rights" shall have the meaning set forth in the
preamble to this Agreement.
(ab) "Rights Agent" shall mean the Person named as the
"Rights Agent" in the first paragraph of this Agreement until a successor
Rights Agent shall have become such pursuant to the applicable provisions
hereof, and thereafter "Rights Agent" shall mean such successor Rights Agent.
If at any time there is more than one Person appointed by the Company as Rights
Agent pursuant to the applicable provisions of this Agreement, "Rights Agent"
shall mean and include each such Person.
(ac) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(ad) "Rights Dividend Declaration Date" shall have the
meaning set forth in the preamble to this Agreement.
(ae) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a) (ii) (A), (B) or (C) hereof.
(af) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ag) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(ah) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ai) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act or any successor provision) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(aj) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities or voting
interests sufficient to elect at least a majority
5
<PAGE> 9
of the directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(ak) "Substitute Consideration" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(al) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(am) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(an) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(ao) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(ap) "Unit" shall have the meaning set forth in the
preamble to this Agreement.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable and shall give the Rights Agent ten (10)
days prior written notice of any such appointment. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine, with
the consent of the Rights Agent, which shall not be unreasonably withheld. In
no event shall the Rights Agent have any duty to supervise or be liable for the
acts or omissions of any Co-Rights Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the
Stock Acquisition Date occurs before the Record Date, the Close of Business on
the Record Date), or (ii) the Close of Business on the tenth Business Day after
the date that a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, or any successor
provision, if upon consummation thereof, such Person would be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding (the
earlier of (i) and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject
6
<PAGE> 10
to the provisions of paragraph (b) of this Section 3) by the certificates for
shares of Common Stock registered in the names of the holders of shares of
Common Stock (which certificates for shares of Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y) the
Rights (and the right to receive certificates therefor) will be transferable
only in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of shares 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, one or more rights certificates, in substantially the
form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(a)(i) hereof, at the time of the
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. The Company
shall give prompt written notice of such adjustments to the Rights Agent. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificate.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding
as of the Record Date, until the earlier of the Distribution Date or the
Expiration Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been
issued, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall, without any further action, be issued
in respect of all shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Serv-Tech, Inc. (the "Company") and Society National Bank (the "Rights
Agent"), dated as of November 16, 1995, as it may be from time to time
amended (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain
7
<PAGE> 11
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void."
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date, or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit 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 of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Sections
11 and 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of Units as shall be set forth therein at the exercise
price per Unit set forth therein (such exercise price per Unit being
hereinafter referred to as the "Purchase Price"), but the amount and type of
securities or other assets purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provisions of this
Agreement, any Rights Certificate issued pursuant to Section 3(a) or 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any such Associate or Affiliate)
to holders of equity interests in such Acquiring Person (or any such Associate
or Affiliate) or
8
<PAGE> 12
to any Person with whom such Acquiring Person (or any such Associate or
Affiliate) has any continuing agreement, arrangement or understanding regarding
the transferred Rights, shares of Common Stock or the Company, or (B) a transfer
which a majority of the Continuing Directors have determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Sections 6 or 11 hereof upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend in addition to the legend specified in
Section 3(c) hereof:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement."
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its President, any Executive Vice President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned
by an authorized signatory of the Rights Agent (which need not be the same
signatory for all of the Rights Certificates) and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights 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 Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Agreement any such person was not such an officer. In
case any authorized signatory of the Rights Agent who shall have countersigned
any of the Rights Certificates shall cease to be such signatory before delivery
by the Company, such Rights Certificates, nevertheless, may be issued and
delivered by the Company with the same force and effect as though the person
who countersigned such Rights Certificates had not ceased to be such signatory;
and any Rights Certificate may be countersigned on behalf of the Rights Agent
by any person who, at the actual date of the countersignature of such Rights
Certificate, shall be a proper signatory of the Rights Agent to countersign
such Rights Certificate, although at the date of the execution of this
Agreement any such person was not such a signatory.
9
<PAGE> 13
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal shareholder services office or
offices designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates, the
Certificate number, the date of each of the Rights Certificates and the date of
countersignature by the Rights Agent.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), 7(e) and
14 hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of Units (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate duly executed and such
other and further documentation as the Rights Agent may reasonably require, at
the principal shareholder services office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment set forth on the
reverse side of each such Rights Certificate and shall have provided such
additional evidence of identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the company shall reasonably
request. Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and
14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment from such Rights Certificateholders of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent, at the principal shareholder services
office or offices of the Rights Agent designated for such purpose, and
cancellation of the Rights Certificate if mutilated (together with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably require), the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
10
<PAGE> 14
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a) hereof) in
whole or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, together with such other and further
documentation as the Rights Agent may reasonably require, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of Units (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are then exercisable, at or
prior to the earlier of (i) the Final Expiration Date, or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the earlier of
(i) and (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Unit pursuant to the
exercise of a Right shall initially be $50.00, and shall be subject to the
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) of this Section 7.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment with respect to each Right so exercised
of the Purchase Price for the Units (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, together with
such other and further documentation as the Rights Agent may reasonably
require, the Rights Agent shall, subject to Section 20(k) hereof, promptly (i)
(A) requisition from any transfer agent of the shares of Common Stock (or make
available, if the Rights Agent is the transfer agent for the Common Stock)
certificates for the total number of shares of Common Stock which constitute
part of the Units to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to deposit the total number
of shares of Common Stock issuable as part of the Units upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock as are
to be purchased (in which case certificates for the shares of Common Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amounts of cash, if
any, to be paid in lieu of fractional shares of Common Stock in accordance with
Section 14 hereof, (iv) after receipt of such certificates or depositary
receipts for shares of Common Stock, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificates, registered in
such name or names as may be designated by such holder,
11
<PAGE> 15
and (v) after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) and any applicable transfer tax shall be made in lawful money of the
United States of America in cash or by certified check, cashier's check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, which a majority of the Continuing Directors, in their sole
discretion, determine is or was involved in or caused or facilitated, directly
or indirectly (including through any change in the Board), such Triggering
Event, (ii) a transferee of any such Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after such Acquiring Person becomes such,
or (iii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with such Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or any such
Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or any such Associate or Affiliate) or to any Person with whom such Acquiring
Person (or any such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, shares of Common
Stock or the Company, or (B) a transfer which a majority of the Continuing
Directors have determined, in their sole discretion, is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the
12
<PAGE> 16
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or any
of its agents, be delivered to the Rights Agent for cancellation or in canceled
form or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued shares of
Common Stock, or any authorized and issued shares of Common Stock held in its
treasury (and, following the occurrence of a Triggering Event, out of its
authorized and unissued other securities or securities in its treasury, if
appropriate), the number of shares of Common Stock (and, following the
occurrence of a Triggering Event, other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and, following
the occurrence of a Triggering Event, other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Common Stock
(and other securities) issuable to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence
of a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or, if so required by law, as soon as practicable
following the Distribution Date, a registration statement under the Act with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act and the rules and regulations thereunder) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the Expiration Date.
13
<PAGE> 17
The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Common Stock
(and, following the occurrence of a Triggering Event, other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or of such other securities (subject to payment of
the Purchase Price), as the case may be, shall be duly and validly authorized
and issued and that all shares shall be fully paid and nonassessable and all
forms of indebtedness, if any, shall be valid, binding and effective.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates, any certificates for a number of shares of Common Stock (or
other securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or in respect of the issuance or delivery of a number of shares of Common
Stock (or other securities, as the case may be) in a name other than that of,
the registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for a number of shares of
Common Stock (or other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Record Date for Securities Issued Upon Exercise.
Each Person in whose name any certificate for a number of shares of Common
Stock (or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such fractional shares of Common Stock (or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Common Stock (or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be deemed to have become
14
<PAGE> 18
the record holder of such shares (fractional or otherwise) (or other securities,
as the case may be) on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock (or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends, or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number
of shares, 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) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number of shares of Common Stock issuable
upon purchase of a Unit on such date (or the number and kind of other
securities, as the case may be), shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect,
the aggregate number of shares of Common Stock (or the number and kind
of other securities, as the case may be) which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Stock (or other capital stock, as the case may be) transfer books of
the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, at any time
after the date of this Agreement, directly or indirectly, (1)
shall merge into the Company or any of its Subsidiaries or
otherwise combine with the Company or any of its Subsidiaries
and the Company or such Subsidiary shall be the continuing or
surviving corporation of such
15
<PAGE> 19
merger or combination and the Common Stock of the Company shall
remain outstanding and unchanged, (2) shall, in one transaction
or a series of transactions, transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole or in part)
for shares of Common Stock, for shares of other equity
securities of the Company, or for securities exercisable for or
convertible into shares of equity securities of the Company
(Common Stock or otherwise) or otherwise obtain from the
Company or any of its Subsidiaries, with or without
consideration, any additional shares of such equity securities
or securities exercisable for or convertible into shares of
such equity securities (other than pursuant to a pro rata
distribution to all holders of Common Stock or upon the
exercise of a convertible security of the Company in accordance
with its terms), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of,
in one transaction or a series of transactions, to, from or
with (as the case may be) the Company or any of its
Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity, assets
(including securities) on terms and conditions less favorable
to the Company, such Subsidiary or such plan than the Company,
such Subsidiary or such plan would be able to obtain in
arm's-length negotiation with an unaffiliated third party,
other than pursuant to a transaction set forth in Section 13(a)
hereof, (4) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of in one
transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of the Company's
Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity (other than
incidental to the lines of business, if any, engaged in as of
the date hereof between the Company or any of its Subsidiaries
and such Acquiring Person or Associate or Affiliate), assets
(including securities) having an aggregate fair market value of
more than $2,500,000, other than pursuant to a transaction set
forth in Section 13(a) hereof, (5) shall receive any
compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment
as a regular employee at rates in accordance with the Company's
(or its Subsidiaries') past practices, or (6) shall receive the
benefit, directly or indirectly (except proportionately as a
shareholder and except if resulting from a requirement of law
or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company or any
of its Subsidiaries or any employee benefit plan maintained by
the Company or any of its Subsidiaries, or
(B) any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
Person or entity organized, appointed or established by the
Company or any of its Subsidiaries for or pursuant to the terms
of any such plan), alone or together with its Affiliates and
Associates, shall, at any time after
16
<PAGE> 20
the Rights Dividend Declaration Date, become the Beneficial
Owner of 15% or more of the shares of Common Stock then
outstanding, unless the event causing the 15% threshold to be
crossed is a transaction set forth in Section 13(a) hereof, or
is an acquisition of shares of Common Stock pursuant to a
tender or exchange offer for all outstanding shares of Common
Stock at a price and on terms determined by a majority of the
Continuing Directors, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
shareholders (taking into account all factors which the
Continuing Directors deem relevant including, without
limitation, prices which would reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value), and (b) otherwise in the best interests
of the Company and its shareholders (not including the
Acquiring Person), or
(C) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction
or transactions to which the provisions of Section 13(a) apply
(whether or not with or into or otherwise involving an
Acquiring Person or any Associate or Affiliate thereof) which
has the effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding shares of
any class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly beneficially
owned by any Acquiring Person or any Associate or Affiliate of
any Acquiring Person,
then, promptly following five (5) days after the date of the occurrence of an
event described in Section 11(a)(ii)(B) hereof and promptly following the
occurrence of any event described in Section 11(a)(ii)(A) or (C) hereof, proper
provision shall be made so that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of Units for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, such number of shares of Common Stock as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number of shares
of Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (such
product thereafter being, for all purposes of this Agreement other than Section
13 hereof, called the "Purchase Price") by 50% of the Current Market Price per
share of Common Stock on the date of such first occurrence (such number of
shares being referred to as the "Adjustment Shares").
Notwithstanding anything in this Agreement to the contrary, Section 11
(a)(ii) shall not be applicable to a transaction described in Section
11(a)(ii)(A)(1), if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a tender or exchange offer for
all outstanding shares of Common Stock which complies with the
17
<PAGE> 21
provisions of Section 11(a)(ii)(B) hereof (or a wholly owned Subsidiary of any
such Person or Persons; (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such tender or
exchange offer; and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender or exchange
offer.
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by a majority
vote of the Continuing Directors, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess
being referred to as the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board has deemed to have the same value as
shares of Common Stock (such shares of preferred stock being referred
to as "Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing (whichever
substituted, the "Substitute Consideration"), having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by a majority of the Continuing Directors based upon the
advice of an investment banking firm; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event, and (y) the date on
which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board, by
majority vote of the Continuing Directors, shall determine in good
faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such period, as it may be extended, being referred to herein as the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentences
of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the
18
<PAGE> 22
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value of any
Common Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date. Notwithstanding any other provision in this
Agreement, the Company shall not be obligated to pay Substitute
Consideration (or shares of Common Stock and/or cash equal to the value
of the Spread) in the event of any exercise of Rights if and to the
extent a determination is made by a majority of the Continuing
Directors, acting in their sole discretion, (x) that such payment would
be in violation of applicable law, or (y) that such payment would
result in a decrease in fair market value per-share of Common Stock in
excess of that which would have occurred if sufficient Common Stock
were authorized to permit exercise in full of the Rights in accordance
with subparagraph (ii) of this Section 11(a) and such Rights were so
exercised in full for such shares of Common Stock.
(iv) If the rules of the national securities
exchange, registered as such pursuant to Section 6 of the Exchange Act,
or of the national securities association, registered as such pursuant
to Section 15A of the Exchange Act, on which the Common Stock is
principally traded would prohibit such exchange or association from
listing or continuing to list, or from authorizing for or continuing
quotation and/or transaction reporting through an inter-dealer
quotation system, the Common Stock or other equity securities of the
Company if the Rights were to be exercised for shares of Common Stock
in accordance with subparagraph (ii) of this Section 11(a) because such
issuance would nullify, restrict or disparately reduce the per share
voting rights of holders of Common Stock, the Company, by a majority
vote of the Continuing Directors, shall: (A) determine the Spread, and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, Substitute Consideration, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board, by a majority vote of the Continuing Directors, based upon the
advice of an investment banking firm; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the Section
11(a)(ii) Trigger Date, then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, cash having an aggregate value equal to
the Spread. To the extent that the Company determines that some action
need be taken pursuant to the first sentence of this Section 11(a)(iv),
the Company (x) shall provide, subject to Section 7(e) hereof, that
such action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights, but not longer than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall
19
<PAGE> 23
issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iv), the value of the Common Stock shall be the
Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent
shall be deemed to have the same value as the Common Stock on such
date. Notwithstanding any other provision in this Agreement, the
Company shall not be obligated to pay Substitute Consideration (or
shares of Common Stock and/or cash equal to the value of the Spread) in
the event of any exercise of Rights if and to the extent a
determination is made by a majority of the Continuing Directors, acting
in their sole discretion, (x) that such payment would be in violation
of applicable law, or (y) that such payment would result in a decrease
in fair market value per share of Common Stock in excess of that which
would have occurred if Common Stock were issued on the exercise in full
of the Rights in accordance with subparagraph (ii) of Section 11(a).
(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 to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Common Stock (or shares having the same
rights, privileges and preferences as the shares of Common Stock ("Equivalent
Common Stock")) or securities convertible into Common Stock or Equivalent Common
Stock at a price per share of Common Stock or per share of 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 Market Price per
share of Common Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, 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). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by a majority
of the Continuing Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
20
<PAGE> 24
(c) In case the Company shall fix a record date for 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 or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Common Stock, but
including any dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock on such record date, less the fair
market value (as determined in good faith by a majority of the Continuing
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights) of the portion of the cash, assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to a share
of Common Stock and the denominator of which shall be such Current Market Price
per share of Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
21
<PAGE> 25
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by a
majority of the Continuing Directors. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by a majority of the Continuing Directors shall be
used, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of Rights.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the fair value per share as
determined in good faith by a majority of the Continuing Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (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 (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the 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 purchase, at the adjusted Purchase Price, one Unit,
consisting of that number of shares of Common Stock (or other securities or
cash or combination thereof) purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
22
<PAGE> 26
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, one Unit,
consisting of that number of shares of Common Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (x) 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 lieu of any
adjustment in the number of shares of Common Stock purchasable as a Unit upon
the exercise of a Right. Each of the Rights outstanding after the adjustment
in the number of Rights shall be exercisable for one Unit, consisting of that
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 one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders hall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the Units issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per Unit and the Units which were expressed in the initial
Rights 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
number of shares of Common Stock or
23
<PAGE> 27
other securities 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 or other securities at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the 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 (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the Current Market Price, (iii) issuance wholly for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders or shall reduce the taxes payable by such
holders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
charter or by-law provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates; provided, however, this Section 11(n)
shall not affect the ability of any Subsidiary of the Company to
24
<PAGE> 28
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company. The Company shall not consummate
any consolidation, merger, sale or transfer of assets or earning power unless
prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n). The provision of this Section 11(n) shall similarly
apply to successive merger, consolidations, sales or other transfers.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23 or 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
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 Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell, mortgage
or otherwise transfer (or one or more of its Subsidiaries shall sell, mortgage
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof) (any such event
being called a "Section 13 Event"), then, and in each such case, except as may
be contemplated by Section 13(e) hereof, proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this
25
<PAGE> 29
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, transfer restrictions, rights of call or first refusal or other
adverse claims, as shall be equal to the amount obtained by (1) multiplying the
then current Purchase Price by the number of shares of Common Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of shares of Common
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event described in
subparagraphs (x) and (y), but the provisions of Section 11(a)(ii) hereof shall
continue to apply following any occurrence of any Section 13 Event described in
subparagraph (z), of this Section 13(a). Notwithstanding any of the foregoing,
upon the occurrence of a Section 13 Event described in subparagraph (z) of this
Section 13(a), while subparagraphs (i) through (v) above shall apply as
indicated to require the Principal Party to assume the Company's obligations
and duties under this Agreement, the provisions of the Rights Agreement,
including without limitation Section 11, also shall continue to apply in full
to the Company, and the Company shall continue to have the same liabilities,
duties and obligations under this Agreement as it would have if such Section 13
Event had not occurred.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), (A) the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the largest aggregate Current Market Price,
and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the highest
aggregate Current Market Price; and
26
<PAGE> 30
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power transferred pursuant to
such transaction or transactions, or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
Current Market Price;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; (2) in
case such Person is a Subsidiary, directly or indirectly, or Affiliate 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 Current Market Price;
and (3) in case such Person is owned, directly or indirectly, by an entity
other than a corporation formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (1) and (2)
above shall apply to each of the chains of ownership having an interest in such
entity as if such party were a "Subsidiary" of both or all of the participants
in such entity and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and each
Principal Party and each other Person who may become a Principal Party as a
result of such consolidation, merger, sale or transfer shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, merger, sale
or transfer of assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will:
(i) (A) prepare and file a registration
statement under the Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (x) become effective as soon as
practicable after such filing, and (y) remain effective (with
a prospectus at all time meeting the requirements of the Act)
until the Expiration Date, and (B) use its best efforts to
qualify or register the Rights and the securities purchasable
upon exercise of the Rights under the "blue sky" laws of such
jurisdictions as may be necessary or appropriate; and
27
<PAGE> 31
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to
a transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue, in connection with, or
as a consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock of such Principal Party at less than the
then Current Market Price per share or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such
Current Market Price (other than to holders of Rights pursuant to this Section
13), or (ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender or exchange offer for all outstanding shares of Common
Stock which complies with the provisions of Section 11(a)(ii)(B) hereof (or a
wholly owned Subsidiary of any such Person or Persons), (ii) the price per
share of Common Stock offered in such transaction is not less than the price
per share of Common Stock paid to all holders of shares of Common Stock whose
shares were purchased pursuant to such tender or exchange offer; and (iii) the
form of consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender or exchange offer. Upon
consummation of any transaction contemplated by the preceding sentence of this
Section 13(e), all Rights hereunder shall expire. Furthermore, notwithstanding
anything in this Agreement to the contrary, Section 13 shall not be applicable
to a transaction described in subparagraph (z) of Section 13(a) if such
transaction is determined by a majority of the Continuing Directors to be (a)
at a price which is fair to shareholders and (b) otherwise in the best
interests of the Company and its shareholders (other than the Acquiring
Person). The Rights hereunder shall not expire upon consummation of any
transaction contemplated by the immediately preceding sentence of this Section
13(e).
28
<PAGE> 32
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board. 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 shall be used and such determination shall be described in a
statement filed with the Rights Agent and the holders of the Rights and shall
be binding on the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions
of shares of Common Stock (or other securities) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Common Stock (or
other securities). In lieu of fractional shares of Common Stock (or other
securities), the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a share of
Common Stock or such other securities. For purposes of this Section 14(b), the
current market value of one share of Common Stock or other securities shall be
the closing price per share of Common Stock or other securities (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon the exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action expressly vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of
29
<PAGE> 33
any Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any other Person
to enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to receive the reasonable costs
and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal shareholder services office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper duly
executed instrument of transfer and with the appropriate forms and certificates
fully executed (including signature guarantees);
(c) subject to Sections 6(a) and 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided,
30
<PAGE> 34
however, the Company must use its best efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
shares of 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 Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 24
hereof), or to receive dividends, subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, notice of adjustment, instruction,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer 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 document
or any further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible
31
<PAGE> 35
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates to
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement, the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
or any Affiliate or Associate thereof and the determination of Current Market
Price) be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Executive Vice President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be
32
<PAGE> 36
required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificates (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
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities, to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock or other
securities will, when so 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 and
certificates delivered pursuant to any provision hereof from the Chairman of
the Board, the President, any Executive Vice President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and is authorized 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; provided, however, that so long as any Person
is an Acquiring Person hereunder, the Rights Agent shall accept such
instructions and advice only from a majority of the Continuing Directors and
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with such instructions of a majority of the Continuing
Directors. Any application by the Rights Agent for written instructions from
the Company may, at the Rights Agent's option, set forth in writing any action
proposed to be taken or omitted by the Rights Agent with respect to its duties
and obligations under this Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken or omitted by the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives such
application, unless the Company shall have consented in writing to an earlier
date) without the Company's consent unless, prior to taking any such action (or
the effective date in the case of an omission), the
33
<PAGE> 37
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, omission, default, neglect or misconduct;
provided, however, that reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then the
Company shall become the temporary Rights Agent and any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
34
<PAGE> 38
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the
States of Texas or New York (or of any other state of the United States so long
as such corporation is authorized to do business as a banking institution in
the States of Texas or New York), in good standing, having a principal office
in the States of Texas or New York, which is authorized under such laws to
exercise corporate trust or stock transfer 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
$50,000,000, or (b) an Affiliate of a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the
Continuing Directors to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by a majority of the Continuing Directors,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to
the earlier of (i) the Close of Business on the tenth day following the Stock
Acquisition Date (or, if the Stock
35
<PAGE> 39
Acquisition Date shall have occurred prior to the Record Date, the Close of
Business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, if the
Board authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii) below, then there must be Continuing Directors
then in office and such authorization shall require the concurrence of a
majority of the Continuing Directors: (i) such authorization occurs on or after
the time a Person becomes an Acquiring Person, or (ii) such authorization
occurs on or after the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the commencement of
such solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of the
Continuing Directors has determined in good faith) that such Person (or any of
its Affiliates or Associates) intends to take, or may consider taking, any
action which would result in such Person becoming an Acquiring Person or which
would cause the occurrence of a Triggering Event. If, following the occurrence
of a Stock Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (A) (i) a Person who is
an Acquiring Person shall have transferred or otherwise disposed of a number of
shares of Common Stock in one transaction or series of transactions, not
directly or indirectly involving the Company or any of its Subsidiaries, which
did not result in the occurrence of a Triggering Event, such that such Person
is thereafter a Beneficial Owner of 5% or less of the outstanding shares of
Common Stock, (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring Persons, and
(iii) the Board (with the concurrence of a majority of the Continuing
Directors) shall so approve, or (B) (i) in connection with any event specified
in Sections 11(a) (ii) (A) (1) or 13(a) in which all holders of Common Stock
are treated alike and not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any other Person in which such Acquiring
Person, Affiliate or Associate is the beneficial owner of securities
representing more than 5% of the voting power, or representing more than 5% of
any other equity interest having power to control or direct the management of,
such other Person, or any other Person acting directly or indirectly on behalf
of or in association with any such Acquiring Person, Affiliate or Associate,
and (ii) the Board (with the concurrence of a majority of the Continuing
Directors), as part of the approval of an event described in the preceding
clause (B) (i) approves the reinstatement of the right of redemption, then in
either case the right of redemption shall be reinstated and thereafter be
subject to the provisions of this Section 23. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights under the provisions of Section 23(a) hereof, evidence
of which shall have been filed with
36
<PAGE> 40
the Rights Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board ordering the redemption of the
Rights under the provisions of Section 23(a) hereof, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. The Company may, at its option, discharge all
of its obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights, (ii) depositing with a bank
or trust company in the City of Houston, State of Texas, having a capital and
surplus of at least $25,000,000, funds necessary for such redemption, in trust,
to be applied to the redemption of the Rights so called for redemption, and
(iii) arranging for the mailing of the Redemption Price to the registered
holders of the Rights; then, and upon such action, all outstanding Rights
Certificates shall be null and void without any further action by the Company.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of 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 (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, and to the Rights Agent, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of 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 (i) or (iii) above at
least twenty (20) days prior to the record date for determining holders of the
shares of Common Stock for purposes of such action, and in the case of any such
other action, at least
37
<PAGE> 41
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Common Stock,
whichever shall be the earlier; provided, however, that no such notice shall be
required pursuant to this Section 24 if any Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other transfer of
assets or earnings power to, any other Subsidiary of the Company.
(b) In case any Section 11(a)(ii) Event shall occur,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, and to the Rights Agent, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Common Stock shall, to the extent
appropriate, also be deemed thereafter to refer to other securities.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be in writing and shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
P.O. Box 4334
Houston, Texas 77210
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Society National Bank
c/o KeyCorp. Shareholder Services
700 Louisiana, Suite 2620
Houston, Texas 77002-2729
Attention: Lorraine Rodewald
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the
38
<PAGE> 42
Company so directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clauses (i) and (ii) of the first proviso
to Section 23(a) hereof, shall be effective only if there are Continuing
Directors and shall require the concurrence of a majority of the Continuing
Directors), or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of any such Person);
provided, however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 30
hereof, a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery of
a certificate from an appropriate officer of the Company or, so long as any
Person is an Acquiring Person hereunder, from a majority of the Continuing
Directors, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of Units, or the number of shares of Common Stock constituting such
Units, for which a Right is exercisable, without the approval of a majority of
the Continuing Directors. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
Section 27. Successor. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock or any other securities of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement. The Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
or to the Company, or as may be necessary or advisable in the administration of
this Agreement,
39
<PAGE> 43
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights, to amend this Agreement or to
limit the Substitute Consideration or Spread payable). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights. The Board (with the
concurrence of a majority of the Continuing Directors) shall be authorized to
appoint a Committee and delegate to it the authority to exercise the power and
authority of the Board and of the Continuing Directors under this Agreement.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Continuing Directors, in their good faith judgment, determine that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the Close of Business on
the tenth day following the date of such determination by the Continuing
Directors.
Section 31. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Texas and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together constitute
but one and the same instrument.
40
<PAGE> 44
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
Attest: SERV-TECH, INC.
[SEAL]
/s/ FRANK PERRONE /s/ DAVID P. TUSA
- - ---------------------------------- -----------------------------------
Name: Frank Perrone Name: David P. Tusa
Title: Secretary Title: Senior Vice President,
Finance and Administration
Attest: SOCIETY NATIONAL BANK
[SEAL]
/s/ BARBARA A. SHEPHERD /s/ LORRAINE RODEWALD
- - ---------------------------------- -----------------------------------
Name: Barbara A. Shepherd Name: Lorraine Rodewald
Title: Vice President Title: Assistant Vice President
41
<PAGE> 45
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _________Rights
NOT EXERCISABLE AFTER NOVEMBER 16, 2005 OR EARLIER IF REDEEMED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
RIGHTS CERTIFICATE
SERV-TECH, INC.
This certifies that ______________________________________, or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of November 16,
1995 (the "Rights Agreement"), between Serv-Tech, Inc., a Texas corporation
(the "Company"), and Society National Bank, a national banking association (the
________________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
<PAGE> 46
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as defined in the Rights Agreement) and prior to the
Expiration Date (as defined in the Rights Agreement) at the office or offices
of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one Unit, consisting initially of one fully paid and nonassessable share
of common stock, par value $.50 per share (the "Common Stock"), of the Company,
at a purchase price of $50.00 per Unit (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the amount of securities constituting
a Unit which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the amount of securities constituting a
Unit and the Purchase Price as of November 28, 1995, based on the Common Stock
as constituted on such date.
Upon the occurrence of a Section 11(a)(ii) Event (as defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate
are beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of any such Person (as such terms are defined in the Rights Agreement), which
the Company's Continuing Directors (as defined in the Rights Agreement), in
their sole discretion, determine is or was involved in or caused or
facilitated, directly or indirectly (including through any change in the Board
of Directors of the Company), such Section 11(a)(ii) Event, (ii) a transferee
of any such Acquiring Person, Associate or Affiliate who becomes a transferee
after such Acquiring Person, Associate or Affiliate become such, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of any
such Acquiring Person, Associate or Affiliate who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Common Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain
events, including Triggering Events (as defined in the Rights Agreement).
This Rights Certificate is subject to all the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are on file at the
principal office of the Company and are also available upon written request to
the Rights Agent or the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be
A-2
<PAGE> 47
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Units as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date (as
defined in the Rights Agreement and as such time period may be extended
pursuant to the Rights Agreement), and (ii) the Final Expiration Date (as
defined in the Rights Agreement). Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence of a
majority of the Continuing Directors. After the expiration of the redemption
period, the Company's right of redemption may be reinstated under the
circumstances described in the Rights Agreement.
The Company is not required to issue fractional shares of
Common Stock 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 Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock or any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends, subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
A-3
<PAGE> 48
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of , 19 .
--------- ---
ATTEST: SERV-TECH, INC.
By:
- - ---------------------------------- -------------------------------
Name: Name:
Title: Title:
Countersigned:
SOCIETY NATIONAL BANK
By:
-------------------------------
Authorized Signature
Date:
-----------------------------
A-4
<PAGE> 49
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED______________________________________________________ hereby
sells, assigns and transfers unto______________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:______________________, 19___
___________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed
by a commercial bank or trust
company or a member firm of the
New York Stock Exchange.)
<PAGE> 50
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate / / is / / is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it / / did / / did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: , 19
---------------- --- ----------------------------------
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a
commercial bank or trust company or a
member firm of the New York Stock Exchange.)
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix
a legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 51
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: SERV-TECH, INC.
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Rights Certificate to purchase the
Units issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that the certificates for shares of Common Stock (or other
securities) constituting such Units be issued in the name of and delivered to:
Please insert social security or other taxpayer identification
number:________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
_______________________________________________________________________________
If such number of rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other taxpayer identification
number:________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
_______________________________________________________________________________
Dated:_________________, 19___
___________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a
commercial bank or trust company or a
member firm of the New York Stock Exchange.)
<PAGE> 52
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate / / are / / are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it / / did / / did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: , 19
---------------- --- ----------------------------------
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a
commercial bank or trust company or a
member firm of the New York Stock Exchange.)
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alternation or enlargement or any change
whatsoever.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) subject to the applicable provisions of the
Rights Agreement, and, in the event that all of the Rights evidenced by the
Rights Certificate have not been exercised, the Company will affix a legend to
that effect on the Rights Certificates issued for the balance of the Rights,
whether registered in the name of the holder or assigned.
<PAGE> 53
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 16, 1995, the Board of Directors of Serv-Tech,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of the Company's Common Stock, par value $.50 per share
("Common Stock"), to shareholders of record at the close of business on
November 28, 1995 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one unit (a "Unit"), consisting initially
of one share of Common Stock, at a Purchase Price of $50.00 in cash per Unit,
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement"), dated as of November 16, 1995,
between the Company and Society National Bank, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock upon the date which is the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of Common Stock (the
earlier of said dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates issued after
the Record Date will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Stock outstanding also will constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on November 16, 2005, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
B-1
<PAGE> 54
With certain exceptions, in the event that at any time
following the Distribution Date, (i) the Company is the surviving corporation
in a merger with an Acquiring Person and its Common Stock is not changed or
exchanged, (ii) a Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the Continuing Directors (as defined
below) determine to be fair and otherwise in the best interests of the Company
and its shareholders (other than the Acquiring Person)), (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., a reverse stock split), each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company,
subject to certain limitations) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $50.00 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $100.00 worth of Common Stock (or other consideration, as
noted above) for $50.00. Assuming that the Common Stock had a per share value
of $20.00 at such time, the holder of each valid Right would be entitled to
purchase 5 shares of Common Stock for $50.00.
With certain exceptions, in the event that, at any time
following the Stock Acquisition Date, (i) the Company is acquired in a merger
or other business combination transaction in which the Company is not the
surviving corporation or where the Company is the surviving corporation and all
or part of the outstanding shares of Common Stock are changed into or exchanged
for stock or other securities of any other person or cash or any other property
(other than a merger described in subclause (i) of the second preceding
paragraph or a merger which follows an offer described in the parenthetical in
subclause (ii) of the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a
Right (except rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right.
For example, at an exercise price of $50.00 per Right, each
Right following an event set forth in the preceding paragraph would entitle its
holder to purchase $100.00 worth of common stock of the acquiring company for
$50.00. Assuming that the common stock of the acquiring company had a per
share value of $20.00 at such time, the holder of each issued Right would be
entitled to purchase 5 shares of the common stock of the acquiring company for
$50.00.
B-2
<PAGE> 55
The Purchase Price payable, and the number of shares of Common
Stock (or the number and kind of other securities or property, as the case may
be) 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) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market
price of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional shares of
Common Stock and in lieu thereof an adjustment in cash will be made. For
fractional shares of Common Stock, the adjustment will be based on the market
price of the Common Stock on the last trading date prior to the date of
exercise.
In general, the Company may redeem the Rights in whole, but
not in part, at any time until ten days following the Stock Acquisition Date,
at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem
requires the concurrence of a majority of the Continuing Directors. After the
redemption period has expired, the Company's right of redemption may be
reinstated, with the concurrence of a majority of the Continuing Directors, (i)
if an Acquiring Person reduces its beneficial ownership to 5% or less of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company, or (ii) provided that such redemption is incidental
to a merger or other business combination transaction or series of transactions
involving the Company but not involving an Acquiring Person or any person who
was an Acquiring Person or any affiliate or associate thereof. Immediately
upon the action of the Board of Directors ordering redemption of the Rights
with, where required, the concurrence of the Continuing Directors, the Rights
will terminate and the only right of the holders of Rights will be to receive
the $.01 per Right redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement, and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person or an affiliate or
associate of an Acquiring Person or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of an acquiring company as set forth above.
B-3
<PAGE> 56
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date, but
amendments of those provisions relating to the principal economic terms of the
Rights require approval of a majority of the Continuing Directors. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are not
redeemable.
Copies of the Rights Agreement have been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. Copies of the Rights Agreement are available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
B-4
