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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF
SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
RMI TITANIUM COMPANY
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(Exact name of registrant as specified in its charter)
Ohio 31-0875005
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(State of incorporation or organization) (IRS Employer
Identification No.)
1000 Warren Avenue, Niles, Ohio 44446
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(Address of principal executive offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of registration of a class of
debt securities and is debt securities and is to
effective upon filing become effective
pursuant to General simultaneously with the
Instruction A(c)(1) please effectiveness of a
check the following box. [ ] 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(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Preferred Stock Purchase Rights New York Stock Exchange
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Securities to be registered pursuant to Section 12(g) of the Act:
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Title of class
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Title of class
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
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On June 9, 1997, the Directors of RMI Titanium Company (the "Company")
declared a dividend distribution of one right (a "Right") for each share of
Common Stock, par value $.01 per share (the "Common Shares"), of the Company
outstanding at the close of business on June 19, 1997 (the "Record Date"),
pursuant to the terms of a Rights Agreement, dated as of June 9, 1997 (the
"Rights Agreement"), between the Company and ChaseMellon Shareholder Services,
LLC, as Rights Agent. The Rights Agreement also provides, subject to specified
exceptions and limitations, that Common Shares issued or delivered from the
Company's treasury after the Record Date will be entitled to and accompanied by
Rights. The Rights are in all respects subject to and governed by the provisions
of the Rights Agreement, a copy of which (including all exhibits thereto) is
filed as Exhibit 10.1 hereto and incorporated herein by this reference. A
summary description of the Rights is set forth in Exhibit C to the Rights
Agreement.
ITEM 2. EXHIBITS.
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Exhibit
Number Exhibit
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10.1 Rights Agreement (including a Certificate of
Adoption of Amendment to Amended Articles of
Incorporation as Exhibit A thereto, a Form
of Right Certificate as Exhibit B thereto
and a Summary of Rights to Purchase
Preferred Stock as Exhibit C thereto)
99.1 Form of letter to stockholders, dated June 19,
1997
99.2 Press release, dated June 10, 1997
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
RMI TITANIUM COMPANY
By: /s/ Timothy G. Rupert
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Timothy G. Rupert
Executive Vice President
and Chief Financial Officer
Dated: June 10, 1997
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
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10.1 Rights Agreement (including a Certificate of
Amendment to Amended Articles of Incorporation as
Exhibit A thereto, a Form of Right Certificate as
Exhibit B thereto and a Summary of Rights to
Purchase Preferred Stock as Exhibit C thereto)
99.1 Form of letter to stockholders, dated June 19,
1997
99.2 Press release, dated June 10, 1997
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EXHIBIT 10.1
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RIGHTS AGREEMENT
Dated as of June 9, 1997
By and Between
RMI TITANIUM COMPANY
and
CHASEMELLON SHAREHOLDER SERVICES, LLC
as Rights Agent
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TABLE OF CONTENTS
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PAGE
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1. Certain Definitions................................................1
2. Appointment of Rights Agent........................................5
3. Issue of Right Certificates........................................6
4. Form of Right Certificates.........................................7
5. Countersignature and Registration..................................7
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.................................................8
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.............................................................9
8. Cancellation and Destruction of Right Certificates................10
9. Company Covenants Concerning Securities and Rights................11
10. Record Date.......................................................13
11. Adjustment of Purchase Price, Number and Kind of
Securities or Number of Rights....................................13
12. Certificate of Adjusted Purchase Price or Number of
Securities........................................................23
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.....................................................24
14. Fractional Rights and Fractional Securities.......................27
15. Rights of Action..................................................28
16. Agreement of Rights Holders.......................................29
17. Right Certificate Holder Not Deemed a Stockholder.................30
18. Concerning the Rights Agent.......................................30
19. Merger or Consolidation or Change of Name of Rights
Agent.............................................................31
20. Duties of Rights Agent............................................31
21. Change of Rights Agent............................................33
(i)
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PAGE
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22. Issuance of New Right Certificates................................34
23. Redemption........................................................35
24. Exchange..........................................................36
25. Notice of Certain Events..........................................37
26. Notices...........................................................38
27. Supplements and Amendments........................................39
28. Successors; Certain Covenants.....................................40
29. Benefits of This Agreement........................................40
30. Governing Law.....................................................40
31. Severability......................................................40
32. Descriptive Headings, Etc.........................................40
33. Determinations and Actions by the Board...........................40
34. Counterparts......................................................41
Exhibit A...................................................................A-1
Exhibit B...................................................................B-1
Exhibit C...................................................................C-1
(ii)
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RIGHTS AGREEMENT
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This RIGHTS AGREEMENT, dated as of June 9, 1997 (this "Agreement"), is
made and entered into by and between RMI Titanium Company, an Ohio corporation
(the "Company"), and ChaseMellon Shareholder Services, LLC (the "Rights Agent").
RECITALS
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WHEREAS, on June 9, 1997 the Board of Directors of the Company
authorized and declared a dividend distribution of one right (a "Right") for
each share of Common Stock, par value $.01 per share, of the Company (a "Common
Share") outstanding as of the Close of Business (as hereinafter defined) on June
19, 1997 (the "Record Date"), each Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined) or as provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person (other than the Company or any
Related Person) who or which, together with all Affiliates and Associates of
such Person, is the Beneficial Owner of 20% or more of the then-outstanding
Common Shares; PROVIDED, HOWEVER, that a Person (including a Person that
satisfies the requirements of clauses (i) and (ii) of the following proviso)
will not be deemed to have become an Acquiring Person solely as a result of a
reduction in the number of Common Shares outstanding unless and until such time
as (i) such Person or any Affiliate or Associate of such Person thereafter
becomes the Beneficial Owner of additional Common Shares representing 1% or more
of the then-outstanding Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally, or (ii) any other Person who
is the Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person; PROVIDED FURTHER, HOWEVER, that a Person (other than the Company or
any Related Person) who or which, together with all Affiliates and Associates of
such Person, (i) was, at the time of the public announcement by the Company of
the declaration
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by its Board of Directors on June 9, 1997 of the dividend distribution of the
Rights, the Beneficial Owner of 20% or more of the then outstanding Common
Shares and (ii) that maintains beneficial ownership of 20% or more of the
outstanding Common Shares until the earliest of the date on which the Rights are
redeemed as provided in Section 23, the date on which the Rights are exchanged
as provided in Section 24 or the Final Expiration Date shall not be deemed to
have become an Acquiring Person unless and until such time as such Person,
together with all Affiliates and Associates of such Person, shall become the
Beneficial Owner of 30% or more of the then-outstanding Common Shares.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person" as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
(b) "AFFILIATE" and "ASSOCIATE" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(c) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:
(i) the beneficial ownership of which such Person or any of
such Person's Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, warrants, options or other rights
(in each case, other than upon exercise or exchange of the Rights);
PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has or shares the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if
such Person or any of such Person's Affiliates or
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Associates has any agreement, arrangement, or understanding (whether or
not in writing) with such other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring, holding, voting or
disposing of any securities of the Company;
PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency," as defined in
Section 3(a)(23) of the Exchange Act; PROVIDED FURTHER, HOWEVER, that nothing in
this paragraph (c) will cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Board of Directors of the Company may
determine in any specific case.
(d) "BUSINESS DAY" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of Ohio (or such other state in which
the principal office of the Rights Agent is located) are authorized or obligated
by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date means 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it means 5:00 P.M., Eastern time, on the next succeeding Business Day.
(f) "COMMON SHARES" when used with reference to the Company means the
shares of Common Stock, par value $.01 per share, of the Company; PROVIDED,
HOWEVER, that, if the Company is the continuing or surviving corporation in a
transaction described in Section 13(a)(ii), "Common Shares" when used with
reference to the Company means shares of the capital stock or units of the
equity interests with the greatest aggregate voting power of the Company.
"Common Shares" when used with reference to any corporation or other legal
entity other than the Company, including an Issuer, means shares of the capital
stock or units of the equity interests with the greatest aggregate voting power
of such corporation or other legal entity.
(g) "COMPANY" means RMI Titanium Company, an Ohio corporation.
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(h) "DISTRIBUTION DATE" means the earlier of: (i) the Close of Business
on the tenth calendar day after the Share Acquisition Date, or (ii) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the date of the commencement of a tender or
exchange offer by any Person (other than the Company or any Related Person), if
upon the consummation thereof such Person would be the Beneficial Owner of 20%
or more of the then-outstanding Common Shares.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "EXPIRATION DATE" means the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 or exchanged as provided in Section 24, and (iii) the
time at which all exercisable Rights are exchanged as provided in Section 24.
(k) "FINAL EXPIRATION DATE" means the tenth anniversary of the Record
Date.
(l) "FLIP-IN EVENT" means any event described in clauses (A), (B) or
(C) of Section 11(a)(ii).
(m) "FLIP-OVER EVENT" means any event described in clauses (i), (ii) or
(iii) of Section 13(a).
(n) "ISSUER" has the meaning set forth in Section 13(b).
(o) "NASDAQ" means The NASDAQ Stock Market.
(p) "PERSON" means any individual, firm, corporation or other legal
entity, and includes any successor (by merger or otherwise) of such entity.
(q) "PREFERRED SHARES" means shares of Series A Junior Participating
Preferred Stock, without par value, of the Company having the rights and
preferences set forth in the Certificate of Adoption of Amendment to Amended
Articles of Incorporation attached as EXHIBIT A.
(r) "PURCHASE PRICE" means initially $70.00 per one one-hundredth of a
Preferred Share, subject to adjustment from time to time as provided in this
Agreement.
(s) "RECORD DATE" has the meaning set forth in the Recitals to this
Agreement.
(t) "REDEMPTION PRICE" means $.01 per Right, subject to adjustment by
resolution of the Board of Directors of the Company to reflect any stock split,
stock dividend or similar transaction occurring after the Record Date.
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(u) "RELATED PERSON" means (i) any Subsidiary of the Company or (ii)
any employee benefit or stock ownership plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares for or pursuant to the terms
of any such plan.
(v) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.
(w) "RIGHT CERTIFICATES" means certificates evidencing the Rights, in
substantially the form attached as EXHIBIT B.
(x) "RIGHTS AGENT" means ChaseMellon Shareholder Services, LLC, unless
and until a successor Rights Agent has become such pursuant to the terms of this
Agreement, and thereafter, "Rights Agent" means such successor Rights Agent.
(y) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(z) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.
(aa) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person; PROVIDED, HOWEVER, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any corporation or
other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.
(bb) "TRADING DAY" means any day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.
(cc) "TRIGGERING EVENT" means any Flip-in Event or Flip-over Event.
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, will also be, prior to the Distribution Date, the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and hereby
certifies that it complies with the requirements of the New York Stock Exchange
governing transfer agents and registrars. The Company may from time to time act
as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
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desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of, and
subject to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement.
3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution Date, (i)
the Rights will be evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof (which certificates
representing Common Shares will also be deemed to be Right Certificates), (ii)
the Rights will be transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the surrender for transfer of any
certificates evidencing Common Shares in respect of which Rights have been
issued will also constitute the transfer of the Rights associated with the
Common Shares evidenced by such certificates. On or as promptly as practicable
after the Record Date, the Company will send by first class, postage prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company
as of such date, a copy of a Summary of Rights to Purchase Preferred Stock in
substantially the form attached as EXHIBIT C.
(b) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on,
written on, or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is 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 or transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to conform
to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between RMI Titanium
Company and ChaseMellon Shareholder Services, LLC, dated as of June 9,
1997 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of RMI Titanium Company. The Rights are not
exercisable prior to the occurrence of certain events specified in the
Rights Agreement. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may expire, may be
amended, or may be
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evidenced by separate certificates and no longer be evidenced by this
Certificate. RMI Titanium 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 as set forth in the Rights
Agreement, Rights that are or were beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement) may become null and void.
(c) As promptly as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send), by
first class, insured, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate evidencing
one Right for each Common Share so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(d) In the event that the Company purchases or otherwise acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares will be deemed canceled and retired so
that the Company will not be entitled to exercise any Rights associated with the
Common Shares so purchased or acquired.
4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the form of
election to purchase, the form of assignment and the form of election to
purchase without the payment of cash to be printed on the reverse thereof) will
be substantially in the form attached as EXHIBIT B with such changes and 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 or transaction reporting system on
which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 22, the Right Certificates, whenever
issued, on their face will entitle the holders thereof to purchase such number
of one one-hundredths of a Preferred Share as are set forth therein at the
Purchase Price set forth therein, but the Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number of Rights
outstanding will be subject to adjustment as provided herein.
5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right Certificates will
be executed on behalf of the Company by its
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Chairman of the Board, any Vice Chairman, its President or any Vice President,
either manually or by facsimile signature, and will have affixed thereto the
Company's seal or a facsimile thereof which will be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates will be manually countersigned by the Rights
Agent and will not be valid for any purpose unless so countersigned. In case any
officer of the Company who signed any of the Right Certificates ceases to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, is a proper officer of
the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices 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 or any transaction reporting system on
which the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder. Such books
will show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a) Subject to the
provisions of Sections 7(d) and 14, at any time after the Close of Business on
the Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates representing exercisable Rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any such Right Certificate
or Rights Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon or as promptly as
practicable thereafter,
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subject to the provisions of Sections 7(d) and 14, the Company will prepare,
execute and deliver to the Rights Agent, and the Rights Agent will countersign
and deliver, a Right Certificate or Right Certificates, as the case may be, as
so requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(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 Right Certificate and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent and the Rights
Agent will countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the exercise price
for the total number of securities as to which such surrendered Rights are
exercised and (ii) an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with the provisions
of Section 9(c).
(b) Upon receipt of a Right Certificate representing exercisable Rights
with the form of election to purchase duly executed, accompanied by payment as
described above, the Rights Agent will promptly (i) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (and the Company
hereby irrevocably authorizes and directs such
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depositary agent to comply with all such requests), (ii) after receipt of such
certificates (or depositary receipts, as the case may be), cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, (iii) when appropriate, requisition from the Company or any transfer
agent therefor (or make available, if the Rights Agent is the transfer agent)
certificates representing the number of equivalent common shares to be issued in
lieu of the issuance of Common Shares in accordance with the provisions of
Section 11(a)(iii), (iv) when appropriate, after receipt of such certificates,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder, (v) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of the issuance of fractional shares in accordance with
the provisions of Section 14 or in lieu of the issuance of Common Shares in
accordance with the provisions of Section 11(a)(iii), (vi) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate, and (vii) when appropriate, deliver any due bill or
other instrument provided to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, the Company will prepare, execute
and deliver a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised and the Rights Agent will countersign and deliver such new
Right Certificate to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company will be obligated to undertake any action with
respect to any purported transfer, split up, combination or exchange of any
Right Certificate pursuant to Section 6 or exercise of a Right Certificate as
set forth in this Section 7 unless the registered holder of such Right
Certificate has (i) completed and signed the certificate following the form of
assignment or the form of election to purchase, as applicable, set forth on the
reverse side of the Right Certificate surrendered for such transfer, split up,
combination, exchange or 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 may reasonably request.
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
canceled
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<PAGE> 14
form, or, if surrendered to the Rights Agent, will be canceled by it, and no
Right Certificates will be issued in lieu thereof except as expressly permitted
by the provisions of this Agreement. The Company will deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent will so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent will deliver all
canceled Right Certificates to the Company, or will, at the written request of
the Company, destroy such canceled Right Certificates, and in such case will
deliver a certificate of destruction thereof to the Company.
9. COMPANY COVENANTS CONCERNING SECURITIES AND RIGHTS. The Company
covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held
in its treasury, a number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights in accordance
with Section 7.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other
securities) issuable upon the exercise of the Rights may be listed on a
national securities exchange, or quoted on NASDAQ, it will endeavor to
cause, from and after such time as the Rights become exercisable, all
securities reserved for issuance upon the exercise of Rights to be
listed on such exchange, or quoted on NASDAQ, upon official notice of
issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) delivered upon
exercise of Rights, at the time of delivery of the certificates for
such securities, will be (subject to payment of the Purchase Price)
duly authorized, validly issued, fully paid and nonassessable
securities.
(d) It will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates and of any certificates
representing securities issued upon the exercise of Rights; PROVIDED,
HOWEVER, that the Company will not be required to pay any transfer tax
or charge which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts representing securities
issued upon the exercise of Rights in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates or
depositary receipts representing securities issued upon the exercise of
any Rights until any such tax or charge has been
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<PAGE> 15
paid (any such tax or charge being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established
to the Company's reasonable satisfaction that no such tax is due.
(e) It will use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the Share
Acquisition Date and the Distribution Date, a registration statement
under the Securities Act with respect to the securities issuable upon
exercise of the Rights, (ii) to cause such registration statement to
become effective as soon as practicable after such filing, and (iii) to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time after the date
set forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective. Upon any
such suspension, the Company will issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company determines that a
registration statement should be filed under the Securities Act or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been
declared effective and, upon any such suspension, the Company will
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
anything in this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the
exercise of the Rights is not permitted under applicable law.
(f) Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the
Distribution Date it will not 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 eliminate or otherwise diminish the
benefits intended to be afforded by the Rights.
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<PAGE> 16
(g) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Sections 11, 13,
14 or 24 it will make all arrangements necessary so that such other
securities and/or cash are available for distribution by the Rights
Agent, if and when appropriate.
10. RECORD DATE. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case may be)
is issued upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right 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 transfer books of the Company for
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) are closed, such Person will be deemed to have become the record holder of
such securities on, and such certificate will be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any security for
which the Rights are or may become exercisable, including without limitation the
right to vote, to receive dividends or other distributions, or to exercise any
preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SECURITIES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities issuable
upon exercise of 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 that the Company at any time after the Record Date
(A) declares a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivides the outstanding Preferred Shares, (C) combines
the outstanding Preferred Shares into a smaller number of Preferred
Shares, or (D) issues any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification and/or the
number and/or kind of shares of capital stock issuable on such date
upon exercise of a Right, will be proportionately
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<PAGE> 17
adjusted so that the holder of any Right exercised after such time is
entitled to receive upon payment of the Purchase Price then in effect
the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company for the Preferred Shares were
open, the holder of such Right would have owned upon such exercise
(and, in the case of a reclassification, would have retained after
giving effect to such reclassification) and would have been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock issuable upon
exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) or
Section 13, the adjustment provided for in this Section 11(a)(i) will
be in addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of any
Acquiring Person, directly or indirectly, (1) merges into the Company
or otherwise combines with the Company and the Company is the
continuing or surviving corporation of such merger or combination
(other than in a transaction subject to Section 13), (2) merges or
otherwise combines with any Subsidiary of the Company, (3) in one or
more transactions (otherwise than in connection with the exercise,
exchange or conversion of securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the Company or
any of its Subsidiaries) transfers cash, securities or any other
property to the Company or any of its Subsidiaries in exchange (in
whole or in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries or for securities exercisable or
exchangeable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries, or otherwise obtains
from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of
the Company or any of its Subsidiaries or securities exercisable or
exchangeable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries (otherwise than as part
of a pro rata distribution to all holders of shares of any class of
capital stock of the Company, or any of its Subsidiaries), (4) sells,
purchases, leases, exchanges, mortgages, pledges, transfers or
otherwise disposes (in one or more transactions) to, from, with or of,
as the case may be, the Company or any of its
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<PAGE> 18
Subsidiaries (otherwise than in a transaction subject to Section 13),
any property, including securities, on terms and conditions less
favorable to the Company than the Company would be able to obtain in an
arm's-length transaction with an unaffiliated third party, (5) receives
any compensation from the Company or any of its Subsidiaries other than
compensation as a director or a regular full-time employee, in either
case at rates consistent with the Company's (or its Subsidiaries') past
practices, or (6) receives the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person, there
is any reclassification of securities of the Company (including any
reverse stock split), or any 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 (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction subject to
Section 13, 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, or of securities exercisable or exchangeable for or
convertible into equity securities of the Company or any of its
Subsidiaries, of which an Acquiring Person, or any Affiliate or
Associate of any Acquiring Person, is the Beneficial Owner;
then, and in each such case, proper provision will be made so that from
and after the later of the Distribution Date and the date of the first
occurrence of such Flip-in Event each holder of a Right, except as
provided below, will have the right to receive, upon exercise thereof
in accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the date of the
occurrence of such Flip-in Event (or, if any other Flip-in Event shall
have previously occurred, the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the date
of the first occurrence of such Flip-in Event), in lieu of Preferred
Shares, such number of Common Shares as equals the result obtained by
(x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of such Flip-in Event
(or, if any other
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<PAGE> 19
Flip-in Event shall have previously occurred, multiplying the
then-current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
the date of the first occurrence of such Flip-in Event), and dividing
that product by (y) 50% of the current per share market price of the
Common Shares (determined pursuant to Section 11(d)) on the date of the
first occurrence of such Flip-in Event. Notwithstanding anything in
this Agreement to the contrary, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (A) any
Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (B) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the occurrence
of a Flip-in Event, or (C) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who became a transferee prior to or
concurrently with the occurrence of a Flip-in Event pursuant to either
(1) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (2) a
transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has the purpose or
effect of avoiding the provisions of this Section 11(a)(ii), and
subsequent transferees of any of such Persons, will be void without any
further action and any holder of such Rights will thereafter have no
rights whatsoever with respect to such Rights under any provision of
this Agreement. The Company will use all reasonable efforts to ensure
that the provisions of this Section 11(a)(ii) are complied with, but
will have no liability to any holder of Right Certificates or any other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. Upon the occurrence of a Flip-in Event, no Right
Certificate that represents Rights that are or have become void
pursuant to the provisions of this Section 11(a)(ii) will thereafter be
issued pursuant to Section 3 or Section 6, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have
become void pursuant to the provisions of this Section 11(a)(ii) will
be canceled. Upon the occurrence of a Flip- over Event, any Rights that
shall not have been previously exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only pursuant to Section 13
and not pursuant to this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are
not sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the Common Shares issuable in
accordance with Section 11(a)(ii) upon the exercise of a Right, the
Board of Directors of the Company will use its best efforts promptly to
authorize and, subject to the provisions of Section 9(e), make
available
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<PAGE> 20
for issuance additional Common Shares or other equity securities of the
Company having equivalent voting rights and an equivalent value (as
determined in good faith by the Board of Directors of the Company) to
the Common Shares (for purposes of this Section 11(a)(iii), "equivalent
common shares"). In the event that equivalent common shares are so
authorized, upon the exercise of a Right in accordance with the
provisions of Section 7, the registered holder will be entitled to
receive (A) Common Shares, to the extent any are available, and (B) a
number of equivalent common shares, which the Board of Directors of the
Company has determined in good faith to have a value equivalent to the
excess of (x) the aggregate current per share market value on the date
of the occurrence of the most recent Flip-in Event of all the Common
Shares issuable in accordance with Section 11(a)(ii) upon the exercise
of a Right (the "Exercise Value") over (y) the aggregate current per
share market value on the date of the occurrence of the most recent
Flip- in Event of any Common Shares available for issuance upon the
exercise of such Right; PROVIDED, HOWEVER, that if at any time after 90
calendar days after the latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of the most recent
Flip-in Event, there are not sufficient Common Shares and/or equivalent
common shares available for issuance upon the exercise of a Right, then
the Company will be obligated to deliver, upon the surrender of such
Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available), equivalent common shares (to the
extent available) and then cash (to the extent permitted by applicable
law and any agreements or instruments to which the Company is a party
in effect immediately prior to the Share Acquisition Date), which
securities and cash have an aggregate value equal to the excess of (1)
the Exercise Value over (2) the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the date
of the occurrence of the most recent Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, the product of the
then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right would have been
exercisable immediately prior to the date of the occurrence of such
Flip-in Event if no other Flip-in Event had previously occurred). To
the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable in accordance with
the foregoing sentence, the Company will pay to holders of the Rights
as to which such payments are being made all amounts which are not then
restricted on a pro rata basis and will continue to make payments on a
pro rata basis as promptly as funds become available until the full
amount due to each such Rights holder has been paid.
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<PAGE> 21
(b) In the event that the Company fixes a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or securities having equivalent
rights, privileges and preferences as the Preferred Shares (for purposes of this
Section 11(b), "equivalent preferred shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the current per share market price of the Preferred Shares (determined
pursuant to Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date will be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which is the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate offering price of
the total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current per share market
price and the denominator of which is the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock issuable upon exercise of one Right. In case such subscription
price may be paid in a consideration part or all of which is in a form other
than cash, the value of such consideration will be as determined in good faith
by the Board of Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent. Preferred Shares owned by or held
for the account of the Company will not be deemed outstanding for the purpose of
any such computation. Such adjustment will be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Purchase Price will be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In the event that the Company fixes a record date for the making of
a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect
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<PAGE> 22
immediately prior to such record date by a fraction, the numerator of which is
the current per share market price of the Preferred Shares (as determined
pursuant to Section 11(d)) on such record date or, if earlier, the date on which
Preferred Shares begin to trade on an ex-dividend or when issued basis for such
distribution, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent) of the portion of the evidences of
indebtedness, cash, assets or stock so to be distributed or of such subscription
rights, options or warrants applicable to one Preferred Share, and the
denominator of which is such current per share market price of the Preferred
Shares; PROVIDED, HOWEVER, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock issuable upon exercise of one Right. Such adjustments
will be made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price will again be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of Common Shares on any date will be deemed to be
the average of the daily closing prices per share of such Common Shares
for the 30 consecutive Trading Days immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the current per share market
price of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (A) a dividend or
distribution on such Common Shares payable in such Common Shares or
securities convertible into such Common Shares (other than the Rights)
or (B) any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price will be
appropriately adjusted to take into account ex-dividend trading or to
reflect the current per share market price per Common Share equivalent.
The closing price for each day will be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Common Shares are not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to
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<PAGE> 23
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 Common Shares are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Common Shares selected by the Board of Directors of the Company. If
the Common Shares are not publicly held or not so listed or traded, or
are not the subject of available bid and asked quotes, "current per
share market price" will mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares will be
determined in the same manner as set forth above for Common Shares in
Section 11(d)(i), other than the last sentence thereof. If the current
per share market price of the Preferred Shares cannot be determined in
the manner provided above, the "current per share market price" of the
Preferred Shares will be conclusively deemed to be an amount equal to
the current per share market price of the Common Shares multiplied by
one hundred (as such number may be appropriately adjusted to reflect
events such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Shares occurring after the
date of this Agreement). If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, or the subject of
available bid and asked quotes, "current per share market price" of the
Preferred Shares will mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent. For all purposes of this Agreement, the current per share market
price of one one-hundredth of a Preferred Share will be equal to the
current per share market price of one Preferred Share divided by one
hundred.
(e) Except as set forth below, no adjustment in the Purchase Price will
be required unless such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any adjustments which by reason
of this Section 11(e) are not required to be made will be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 will be made to the nearest cent or to the nearest one one-millionth
of a Preferred Share or one ten-thousandth of a Common Share or other security,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 will be made no later than the
earlier of (i) three years from the date of the
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<PAGE> 24
transaction which requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than Preferred Shares, thereafter the number
and/or kind of such other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price
in respect thereof) will apply on like terms to any such other securities (and
the Purchase Price in respect thereof).
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price pursuant to Section
11(b) or Section 11(c), each Right outstanding immediately prior to the making
of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-hundredths of a Preferred Share
issuable upon exercise of a Right immediately prior to such adjustment of the
Purchase Price by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will 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
will make a public announcement of
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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.
Such record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, will be at
least 10 calendar days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company will, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to the provisions of Section
14, the additional Rights to which such holders are entitled as a result of such
adjustment, or, at the option of the Company, will cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof if required by the Company, new Right Certificates evidencing
all the Rights to which such holders are entitled after such adjustment. Right
Certificates so to be distributed will 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 will be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the Purchase Price
and/or the number and/or kind of securities issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number and kind of securities which were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares or below the then par value, if any, of any other securities of
the Company issuable upon exercise of the Rights, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Preferred Shares or such other securities, as the case may be, at such adjusted
Purchase Price.
(l) In any case in which this Section 11 otherwise requires 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 number of Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other 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 delivers to such holder a due bill or other
appropriate
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<PAGE> 26
instrument evidencing such holder's right to receive such additional Preferred
Shares or other securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Agreement to the contrary, the
Company will 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 of Directors of the Company
determines to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less
than the current per share market price therefor, (iii) issuance wholly for cash
of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (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 Preferred Shares is not taxable to such
stockholders.
(n) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company at any time after the Record Date prior to the
Distribution Date (i) pays a dividend on the outstanding Common Shares payable
in Common Shares, (ii) subdivides the outstanding Common Shares, (iii) combines
the outstanding Common Shares into a smaller number of shares, or (iv) issues
any shares of its capital stock in a reclassification of the outstanding Common
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, will be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following any such event equals the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which is the total number of
Common Shares outstanding immediately prior to the occurrence of the event and
the denominator of which is the total number of Common Shares outstanding
immediately following the occurrence of such event. The adjustments provided for
in this Section 11(n) will be made successively whenever such a dividend is paid
or such a subdivision, combination or reclassification is effected.
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SECURITIES.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is made
after the Distribution Date, mail a
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brief summary of such adjustment to each holder of a Right Certificate in
accordance with Section 26.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that:
(i) at any time after a Person has become an Acquiring
Person, the Company consolidates with, or merges with or into, any
other Person and the Company is not the continuing or surviving
corporation of such consolidation or merger; or
(ii) at any time after a Person has become an Acquiring
Person, any Person consolidates with the Company, or merges with or
into the Company, and the Company is the continuing or surviving
corporation of such merger or consolidation and, in connection with
such merger or consolidation, all or part of the Common Shares is
changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or
(iii) at any time after a Person has become an Acquiring
Person, the Company, directly or indirectly, sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one or more transactions, assets or earning power
(including without limitation securities creating any obligation on the
part of the Company and/or any of its Subsidiaries) representing in the
aggregate 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 one or more of its wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip- over Event (A) each holder of a Right
thereafter has the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Share Acquisition Date, such number of duly authorized,
validly issued, fully paid, nonassessable and freely tradeable Common Shares of
the Issuer, free and clear of any liens, encumbrances and other adverse claims
and not subject to any rights of call or first refusal, as equals the result
obtained by (x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is exercisable immediately
prior to the Share Acquisition Date and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Issuer (determined
pursuant to Section 11(d)), on the date of the occurrence of such Flip-over
Event; (B) the Issuer will thereafter be liable for, and will assume, by virtue
of the occurrence of such Flip-over Event, all the obligations and
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duties of the Company pursuant to this Agreement; (C) the term "Company" will
thereafter be deemed to refer to the Issuer; and (D) the Issuer will take such
steps (including without limitation the reservation of a sufficient number of
its Common Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to assure that the
provisions hereof are thereafter applicable, as nearly as reasonably may be
possible, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" means (i) in the case of
any Flip-over Event described in Sections 13(a)(i) or (ii) above, the Person
that is the continuing, surviving, resulting or acquiring Person (including the
Company as the continuing or surviving corporation of a transaction described in
Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event described
in Section 13(a)(iii) above, the Person that is the party receiving the greatest
portion of the assets or earning power (including without limitation securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that, in any such case, (A) if (1) no class of equity
security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" means such
other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" means whichever of
such Persons is the issuer of the equity security having the greatest aggregate
market value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal entity having
outstanding equity securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by a corporation or other legal entity
having outstanding equity securities, then all references to Common Shares of
the Issuer will be deemed to be references to the Common Shares of the
corporation or other legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such corporation or other
legal entity having outstanding equity securities, (I) proper provision will be
made so that the Issuer creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (II) all other provisions of this
Agreement will apply to the issuer of such securities as if such securities were
Common Shares.
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<PAGE> 29
(c) The Company will not consummate any Flip-over Event if, (i) at the
time of or immediately after such Flip-over Event, there are or would be any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to, simultaneously
with or immediately after such Flip-over Event, the stockholders of the Person
who constitutes, or would constitute, the Issuer for purposes of Section 13(a)
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates or Associates, or (iii) the form or nature of the
organization of the Issuer would preclude or limit the exercisability of the
Rights. In addition, the Company will not consummate any Flip-over Event unless
the Issuer has a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) 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 to such consummation the Company and the
Issuer have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section 13
and further providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities issuable
upon exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(B) take all 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; and
(C) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).
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<PAGE> 30
14. FRACTIONAL RIGHTS AND FRACTIONAL SECURITIES. (a) The Company will
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the Company
will pay as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable, an amount in cash equal to the same fraction of the current market
value of one Right. For the purposes of this Section 14(a), the current market
value of one Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights otherwise would
have been issuable. The closing price for any day is the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use,
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If the Rights are not publicly held or are not so listed or traded,
or are not the subject of available bid and asked quotes, the current market
value of one Right will mean the fair value thereof as determined in good faith
by the Board of Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent.
(b) The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the holders of such
depositary receipts have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company may
pay to any Person to whom or which such
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<PAGE> 31
fractional Preferred Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of one Preferred Share. For
purposes of this Section 14(b), the current market value of one Preferred Share
is the closing price of the Preferred Shares (as determined in the same manner
as set forth for Common Shares in the second sentence of Section 11(d)(i)) for
the Trading Day immediately prior to the date of such exercise; PROVIDED,
HOWEVER, that if the closing price of the Preferred Shares cannot be so
determined, the closing price of the Preferred Shares for such Trading Day will
be conclusively deemed to be an amount equal to the closing price of the Common
Shares (determined pursuant to the second sentence of Section 11(d)(i)) for such
Trading Day multiplied by one hundred (as such number may be appropriately
adjusted to reflect events such as stock splits, stock dividends,
recapitalizations or similar transactions relating to the Common Shares
occurring after the date of this Agreement); PROVIDED FURTHER, HOWEVER, that if
neither the Common Shares nor the Preferred Shares are publicly held or listed
or admitted to trading on any national securities exchange, or the subject of
available bid and asked quotes, the current market value of one Preferred Share
will mean the fair value thereof as determined in good faith by the Board of
Directors of the Company, whose determination will be described in a statement
filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company will
not be required to issue fractions of Common Shares or other securities issuable
upon exercise or exchange of the Rights or to distribute certificates which
evidence any such fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of one such security. For purposes of this
Section 14(c), the current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing price thereof
(as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise or exchange; PROVIDED, HOWEVER, that if neither the Common
Shares nor any such other securities are publicly held or listed or admitted to
trading on any national securities exchange, or the subject of available bid and
asked quotes, the current market value of one Common Share or such other
security will mean the fair value thereof as determined in good faith by the
Board of Directors of the Company, whose determination will mean the fair value
thereof as be described in a statement filed with the Rights Agent.
15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares);
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<PAGE> 32
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), may in his own behalf
and for his own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.
16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights are
transferable only in connection with the transfer of the
Common Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer;
(c) The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or
exchange of a Right, except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will 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
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<PAGE> 33
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, HOWEVER, that the Company
will use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends, or
be deemed for any purpose the holder of Preferred Shares or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of Directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.
18. CONCERNING THE RIGHTS AGENT. (a) The Company will pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company will also indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding or expense,
incurred without negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done 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 will be protected and will incur no liability for
or in respect of any action taken, suffered, or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate or
certificate evidencing Preferred Shares or Common Shares or other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed, and, where necessary, verified or acknowledged, by the proper
Person or Persons.
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<PAGE> 34
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 is a party, or any corporation succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. If at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates will have the full force provided in the Right Certificates
and in this Agreement.
(b) If at any time the name of the Rights Agent changes and at such
time any of the Right Certificates have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and if at that time any of the Right
Certificates have not been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates will have the full force provided in the
Right Certificates and in this Agreement.
20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, will be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will
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 deems it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
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deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Company and delivered
to the Rights Agent, and such certificate will 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 will be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant contained in
this Agreement or in any Right Certificate; nor will it be responsible
for any adjustment required under the provisions of Sections 11 or 13
(including any adjustment which results in Rights becoming void) or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor
will it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of stock
or other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of stock or other
securities will, when issued, be duly authorized, validly issued, fully
paid and nonassessable.
(f) The Company will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, any
Vice President, the Secretary or
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the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it will not be
liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer,
or employee of the Rights Agent may buy, sell, or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein will preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(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 will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof. The Rights Agent will not be under any
duty or responsibility to ensure compliance with any applicable federal
or state securities laws in connection with the issuance, transfer or
exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise, transfer, split up, combination or
exchange, either (i) the certificate attached to the form of assignment
or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or 2
thereof, or (ii) any other actual or suspected irregularity exists, the
Rights Agent will not take any further action with respect to such
requested exercise, transfer, split up, combination or exchange without
first consulting with the Company, and will thereafter take further
action with respect thereto only in accordance with the Company's
written instructions.
21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
calendar days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Shares or the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
calendar days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Preferred Shares
and the Common
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<PAGE> 37
Shares by registered or certified mail, and to the holders of the Right
Certificates by first class mail. If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint a successor to
the Rights Agent. If the Company fails to make such appointment within a period
of 30 calendar days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who will,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, will be a
corporation or other legal entity organized and doing business under the laws of
the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, having a
principal office in the State of 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 million. After appointment, the successor Rights Agent will 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 will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will 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.
22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which
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<PAGE> 38
are exercisable or exchangeable for, or convertible into Common Shares, and (b)
may, in any other case, if deemed necessary, appropriate or desirable by the
Board of Directors of the Company, issue Right Certificates representing an
equivalent number of Rights as would have been issued in respect of such Common
Shares if they had been issued or sold prior to the Distribution Date, as
appropriately adjusted as provided herein as if they had been so issued or sold;
PROVIDED, HOWEVER, that (i) no such Right Certificate will be issued if, and to
the extent that, in its good faith judgment the Board of Directors of the
Company determines that the issuance of such Right Certificate could have a
material adverse tax consequence to the Company or to the Person to whom or
which such Right Certificate otherwise would be issued and (ii) no such Right
Certificate will be issued if, and to the extent that, appropriate adjustment
otherwise has been made in lieu of the issuance thereof.
23. REDEMPTION. (a) Prior to the Expiration Date, the Board of
Directors of the Company may, at its option, redeem all but not less than all of
the then-outstanding Rights at the Redemption Price at any time prior to the
Close of Business on the later of (i) the Distribution Date and (ii) the date of
the first occurrence of a Triggering Event. Any such redemption will be
effective immediately upon the action of the Board of Directors of the Company
ordering the same, unless such action of the Board of Directors of the Company
expressly provides that such redemption will be effective at a subsequent time
or upon the occurrence or nonoccurrence of one or more specified events (in
which case such redemption will be effective in accordance with the provisions
of such action of the Board of Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of the Rights
as provided in Section 23(a), 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 will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will publicly announce such
redemption and, within 10 calendar days thereafter, will give notice of such
redemption to the holders of the then-outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Company; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice will not affect the validity of the redemption of the
Rights. Any notice which is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice. The notice of redemption
mailed to the holders of Rights will state the method by which the payment of
the Redemption Price will be made. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed
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<PAGE> 39
appropriate by the Board of Directors of the Company (based upon the fair market
value of such other consideration, determined by the Board of Directors of the
Company in good faith) or any combination thereof. The Company may, at its
option, combine the payment of the Redemption Price with any other payment being
made concurrently to holders of Common Shares and, to the extent that any such
other payment is discretionary, may reduce the amount thereof on account of the
concurrent payment of the Redemption Price. If legal or contractual restrictions
prevent the Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Board of Directors) at the time of
redemption, the Company will pay the Redemption Price, without interest,
promptly after such time as the Company ceases to be so prevented from paying
the Redemption Price.
(c) At any time following the Share Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately upon
adoption of such resolution, the rights of the Board of Directors of the Company
to redeem the Rights will terminate without further action and without any
notice. Promptly after adoption of such a resolution, the Company will publicly
announce such action; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice will not affect the validity of the action of the Board of
Directors of the Company.
24. EXCHANGE. (a) The Board of Directors of the Company may, at its
option, at any time after the later of the Share Acquisition Date and the
Distribution Date, exchange all or part of the then-outstanding and exercisable
Rights (which will not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii)) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the Record Date (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Any such exchange
will be effective immediately upon the action of the Board of Directors of the
Company ordering the same, unless such action of the Board of Directors of the
Company expressly provides that such exchange will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more specified events (in
which case such redemption will be effective in accordance with the provisions
of such action of the Board of Directors of the Company). Notwithstanding the
foregoing, the Board of Directors of the Company will not be empowered to effect
such exchange at any time after any Person (other than the Company or any
Related Person), who or which, together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the then-outstanding
Common Shares.
(b) Immediately upon the effectiveness of the exchange of any Rights as
provided in Section 24(a), and without any further action and without any
notice, the right to exercise such Rights
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<PAGE> 40
will terminate and the only right with respect to such Rights thereafter of the
holder of such Rights will be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
Promptly after the effectiveness of the exchange of any Rights as provided in
Section 24(a), the Company will publicly announce such exchange and, within 10
calendar days thereafter, will give notice of such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent; PROVIDED, HOWEVER, that the failure to give, or any
defect in, such notice will not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided will be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange will be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any Common Share exchangeable for a Right (i)
equivalent common shares (as such term is used in Section 11(a)(iii)), (ii)
cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Board of Directors of the Company (whose
determination will be described in a statement filed with the Rights Agent),
equal to the current market value of one Common Share (determined pursuant to
Section 11(d)) on the Trading Day immediately preceding the date of the
effectiveness of the exchange pursuant to this Section 24.
25. NOTICE OF CERTAIN EVENTS. (a) If, after the Distribution Date, the
Company proposes (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend), (ii) to offer to
the holders of Preferred Shares rights, options or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights, or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of assets or earning power (including without limitation
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the assets and earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons
other than the Company or one or more of its wholly owned
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<PAGE> 41
Subsidiaries, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or reclassification of the
Common Shares then, in each such case, the Company will give to each holder of a
Right Certificate, to the extent feasible and in accordance with Section 26, a
notice of such proposed action, which specifies the record date for the purposes
of such stock dividend, distribution or offering of rights, options or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least 10 calendar
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and, in the case of any such other action, at least
10 calendar days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such case, the
Company will as soon as practicable thereafter give to the Rights Agent and each
holder of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which specifies the event and the consequences of the
event to holders of Rights.
26. NOTICES. (a) Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company will 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:
RMI Titanium Company
1000 Warren Avenue
Niles, Ohio 44446
Attention: Executive Vice President
and Chief Financial Officer
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent will 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:
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<PAGE> 42
ChaseMellon Shareholder Services, LLC
4 Station Square
Commerce Court Building
3rd Floor
Pittsburgh, Pennsylvania 15219
Attention: Jerry Curtin
(c) Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate (or,
if prior the Distribution Date, to the holder of any certificate evidencing
Common Shares) will 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.
27. SUPPLEMENTS AND AMENDMENTS. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last sentence
of this Section 27, the Company may in its sole and absolute discretion, and the
Rights Agent will if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights
or Common Shares. From and after the time at which the Rights cease to be
redeemable pursuant to Section 23, and subject to the last sentence of this
Section 27, the Company may, and the Rights Agent will if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights or Common Shares 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, or (iv) to supplement or amend the provisions hereunder
in any manner which the Company may deem desirable; provided that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such supplement or amendment shall cause the Rights
again to become redeemable or cause this Agreement again to become
supplementable or amendable otherwise than in accordance with the provisions of
this sentence. Without limiting the generality or effect of the foregoing, this
Agreement may be supplemented or amended to provide for such voting powers for
the Rights and such procedures for the exercise thereof, if any, as the Board of
Directors of the Company may determine to be appropriate. Upon the delivery of a
certificate from an officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent will execute such supplement or amendment; PROVIDED, HOWEVER, that
the failure or refusal of the Rights Agent to execute such supplement or
amendment will not affect the validity of any supplement or amendment adopted by
the Board of Directors of the Company, any of which will be effective in
accordance with the terms thereof. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment may be made which decreases the stated
Redemption Price to an amount less than $0.01 per Right.
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<PAGE> 43
28. SUCCESSORS; CERTAIN COVENANTS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.
29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement. This Agreement will be for the sole and exclusive benefit of the
Company, the Rights Agent, and the registered holders of the Right Certificates
(or prior to the Distribution Date, the Common Shares).
30. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Ohio and for all purposes will be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within such
State.
31. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that nothing contained in this Section 31 will affect the ability of
the Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.
32. DESCRIPTIVE HEADINGS, ETC. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
Unless otherwise expressly provided, references herein to Articles, Sections and
Exhibits are to Articles, Sections and Exhibits of or to this Agreement.
33. DETERMINATIONS AND ACTIONS BY THE BOARD. For all purposes of this
Agreement, any calculation of the number of Common Shares outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares of which any Person is the Beneficial Owner,
will 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. The Board of Directors of
the Company will have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be
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<PAGE> 44
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including any determination as to whether
particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
any omission with respect to any of the foregoing) which are done or made by the
Board of Directors of the Company in good faith will (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 of Directors of the Company to any
liability to any Person, including without limitation the Rights Agent and the
holders of the Rights.
34. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts will for all
purposes be deemed to be an original, and all such counterparts
will together constitute but one and the same instrument.
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<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: RMI TITANIUM COMPANY
/s/ Richard M. Hays By: /s/ Timothy G. Rupert
- ----------------------------- --------------------------
Richard M. Hays Timothy G. Rupert
Secretary Executive Vice President
and Chief Financial
Officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES, LLC
/s/ Harry T. Richards By: /s/ Marilyn Spisak
- ----------------------------- --------------------------
Harry T. Richards Marilyn Spisak
Assistant Vice President Vice President
-42-
<PAGE> 46
EXHIBIT A
---------
CERTIFICATE OF ADOPTION
OF AMENDMENT
TO AMENDED ARTICLES OF INCORPORATION
OF
RMI TITANIUM COMPANY
We, Timothy G. Rupert, Executive Vice President and Chief Financial
Officer, and Richard M. Hays, Secretary, of RMI Titanium Company, an Ohio
corporation (the "Company"), do hereby certify that pursuant to the authority
conferred upon the Board of Directors by the Amended Articles of Incorporation
of the Company, the said Board of Directors at a meeting duly called and held on
June 9, 1997 at which a quorum was present and acting throughout, adopted the
following resolution to amend the Amended Articles of Incorporation of the
Company pursuant to Section 1701.70(B)(1) of the Ohio Revised Code to create a
series of Serial Preferred Stock designated as Series A Junior Participating
Preferred Stock:
RESOLVED, that Article FOURTH of the Amended Articles of
Incorporation of this Company be, and it hereby is, amended by adding after
Division A of Article FOURTH of the Amended Articles of Incorporation a new
Division A-1 as set forth below:
DIVISION A-1
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. There is established hereby a series of Serial
Preferred Stock that shall be designated Series A Junior Participating Preferred
Stock (hereinafter sometimes called this "Series" or the "Series A Junior
Participating Preferred Shares") and that shall have the terms set forth in this
Division A-1.
Section 2. The number of shares of this Series shall be
300,000.
Section 3. (a) The holders of record of Series A Junior
Participating Preferred Shares shall be entitled to receive, when and as
declared by the Directors in accordance with the terms hereof, out of funds
legally available for the purpose, cumulative quarterly dividends payable in
cash on the first day of January, April, July and October in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a Series A Junior Participating Preferred Share or fraction of a Series A
Junior Participating Preferred Share in an amount per share (rounded to the
nearest cent) equal to the
A-1
<PAGE> 47
greater of (i) $1.00 per share or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions (other than a dividend payable in
shares or Common Stock, or a subdivision of the outstanding Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any Series A
Junior Participating Preferred Share or fraction of a Series A Junior
Participating Preferred Share. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such Series A Junior
Participating Preferred Shares, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issues is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Shares entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. No dividends shall be paid upon or declared and set apart for any
Series A Junior Participating Preferred Shares for any dividend period unless at
the same time a dividend for the same dividend period, ratably in proportion to
the respective annual dividend rates fixed therefor, shall be paid upon or
declared and set apart for all Serial Preferred Stock of all series then
outstanding and entitled to receive such dividend. The Board of Directors may
fix a record date for the determination of holders of Series A Junior
Participating Preferred Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 40 days
prior to the date fixed for the payment thereof.
A-2
<PAGE> 48
Section 4. The Series A Junior Participating Preferred
Shares are not redeemable.
Section 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Junior Participating Preferred Shares, unless,
prior thereto, the holders of Series A Junior Participating Preferred Shares
shall have received at least an amount per share equal to one hundred times the
then applicable Purchase Price as defined in the Rights Agreement, as the same
may be from time to time amended in accordance with its terms (which Purchase
Price is $70.00 as of June 9, 1997), subject to adjustment from time to time as
provided in the Rights Agreement, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, provided that the holders of shares of Series A Junior
Participating Preferred Shares shall be entitled to receive at least an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed per share
to holders of Common Stock (the "Series A Junior Participating Preferred Shares
Liquidation Preference").
(b) In the event, however, that the net assets of the Company
are not sufficient to pay in full the amount of the Series A Junior
Participating Preferred Shares Liquidation Preference and the liquidation
preferences of all other series of Serial Preferred Stock, if any, which rank on
a parity with the Series A Junior Participating Preferred Shares as to
distribution of assets in Liquidation, all shares of this Series and of such
other series of Serial Preferred Stock shall share ratably in the distribution
of assets (or proceeds thereof) in Liquidation in proportion to the full amounts
to which they are respectively entitled.
(c) In the event the Company shall at any time declare or pay
any dividend on the Common Stock payable in consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of a dividend in
Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled immediately prior to such event pursuant to the
proviso set forth in paragraph (a) above, shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
A-3
<PAGE> 49
(d) The merger or consolidation of the Company into or with
any other corporation, or the merger of any other corporation into it, or the
sale, lease or conveyance of all or substantially all the property or business
of the Company, shall not be deemed to be a Liquidation for the purpose of this
Section 5.
Section 6. The Series A Junior Participating Preferred Shares
shall not be convertible into Common Stock.
IN WITNESS WHEREOF, Timothy G. Rupert, Executive Vice
President and Chief Financial Officer, and Richard M. Hays, Secretary, of RMI
Titanium Company, acting for and on behalf of the Company, have hereunto
subscribed their names this __th day of June, 1997.
----------------------------------
Timothy G. Rupert
Executive Vice President and Chief
Financial Officer
----------------------------------
Richard M. Hays
Secretary
A-4
<PAGE> 50
FORM OF RIGHT CERTIFICATE
Certificate No. R- Rights
-----------
NOT EXERCISABLE AFTER JUNE 19, 2007 (SUBJECT TO POSSIBLE EXTENSION AT
THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY
BECOME NULL AND VOID.
Right Certificate
RMI TITANIUM COMPANY
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 June 9, 1997 (the "Rights Agreement"), between RMI
Titanium Company, an Ohio corporation (the "Company"), and ChaseMellon
Shareholder Services, LLC (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Eastern time) on the Expiration Date (as such
term is defined in the Rights Agreement) at the principal office or offices of
the Rights Agent designated for such purpose, one one-hundredth of a fully paid
nonassessable share of Series A Junior Participating Preferred Stock, without
par value (the "Preferred Shares"), of the Company, at a purchase price of
$70.00 per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. If this Right Certificate is
exercised in part, the holder will be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights
not exercised. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of the date of the Rights Agreement, based on
the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the
B-1
<PAGE> 51
exercise of the Rights evidenced by this Right Certificate are subject to
adjustment upon the occurrence of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and can
be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein
with the meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of
B-2
<PAGE> 52
Assignment (if appropriate) and the related Certificate duly executed.
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 or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate have been exercised in accordance with the
provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
B-3
<PAGE> 53
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of __________,
- ----.
[SEAL]
ATTEST: RMI TITANIUM COMPANY
By:
- -------------------------------- ------------------------
Richard M. Hays Timothy G. Rupert
Secretary Executive Vice President
Chief Financial Officer
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, LLC
By:
-----------------------------
Authorized Signature
B-4
<PAGE> 54
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: __________, ____
________________________
Signature
Signature Guaranteed:
B-5
<PAGE> 55
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged 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);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____
--------------------------
Signature
B-6
<PAGE> 56
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
To RMI TITANIUM COMPANY:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:
Please insert social security
or other identifying number:
--------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
Please insert social security
or other identifying number:
---------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
Dated: __________, ____
------------------------
Signature
Signature Guaranteed:
B-7
<PAGE> 57
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____
-----------------------------
Signature
NOTICE
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17AD-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
B-8
<PAGE> 58
EXHIBIT C
---------
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors (the "Board") of RMI Titanium Company (the
"Company") has declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock, par value $.01 per share (the "Common
Shares"), of the Company. The distribution is payable on June 19, 1997 (the
"Record Date") to the stockholders of record as of the close of business on the
Record Date. Each Right entitles the registered holder thereof to purchase from
the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, without par value (the "Preferred Shares"), of the Company at a
price (the "Purchase Price") of $70.00 per one one-hundredth of a Preferred
Share, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement, dated as of June 9, 1997 (the "Rights Agreement"),
between the Company and ChaseMellon Shareholder Services, LLC as Rights Agent
(the "Rights Agent").
Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the "Distribution
Date") of: (i) the close of business on the tenth calendar day following the
first date (the "Share Acquisition Date") of public announcement (A) that a
person (other than USX Corporation ("USX"), provided that USX maintains
beneficial ownership of at least 20% of the outstanding Common Shares during the
term of the Rights Agreement), the Company, a subsidiary or employee benefit or
stock ownership plan of the Company or any of its affiliates or associates),
together with its affiliates and associates, has acquired beneficial ownership
of 20% or more of the outstanding Common Shares, or (B) that USX has acquired
beneficial ownership of 30% of the outstanding Common Shares (USX or any such
person or group being hereinafter called an "Acquiring Person") or (ii) the
close of business on the tenth business day (or such later date as may be
specified by the Board) following the commencement of a tender offer or exchange
offer by a person (other than the Company, a subsidiary or employee benefit or
stock ownership plan of the Company or any of its affiliates or associates), the
consummation of which would result in beneficial ownership by such person 20% or
more of the outstanding Common Shares.
The Rights Agreement provides that, until the Distribution Date, the
Rights may be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), any
certificate evidencing Common Shares of the Company issued upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates
evidencing Common Shares will also constitute the transfer of the Rights
associated with such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
C-1
<PAGE> 59
Certificates") will be mailed to holders of record of Common Shares as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth anniversary of the Record
Date (the "Final Expiration Date") unless earlier redeemed, exchanged or amended
by the Company as described below. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company, including
the right to vote or to receive dividends.
The Purchase Price payable, and the number of the Preferred Shares or
other securities issuable, upon exercise of the Rights will be subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of Preferred Shares of certain rights or
warrants to subscribe for or purchase the Preferred Shares at a price, or
securities convertible into the Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness,
cash (excluding regular periodic cash dividends), assets, stock (excluding
dividends payable in the Preferred Shares) or subscription rights or warrants
(other than those referred to above). The number of outstanding Rights and the
number of one one-hundredths of the Preferred Shares issuable upon exercise of
each Right will be subject to adjustment in the event of a stock dividend on the
Common Shares payable in Common Shares or a subdivision, combination or
reclassification of Common Shares occurring, in any such case, prior to the
Distribution Date.
The Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled, in connection with the
declaration of a dividend on the Common Shares, to a preferential dividend
payment equal to the greater of (i) $1.00 per share and (ii) an amount equal to
100 times the related dividend declared per Common Share. Subject to customary
anti-dilution provisions, in the event of liquidation, the holders of Preferred
Shares will be entitled to a preferential liquidation payment equal to the
greater of (a) $100 per share and (b) an amount equal to 100 times the
liquidation payment made per Common Share. Because of the nature of the
Preferred Shares' dividend, voting and liquidation rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon exercise of a Right
should approximate the value of one Common Share.
Rights will be exercisable to purchase Preferred Shares only after the
Distribution Date occurs and prior to the occurrence of a Flip-in Event as
described below. A Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second paragraph of this
C-2
<PAGE> 60
summary could precede the occurrence of a Flip-in Event and thus result in the
Rights being exercisable to purchase Preferred Shares. A Distribution Date
resulting from any occurrence described in clause (i) of the second paragraph of
this summary would necessarily follow the occurrence of a Flip-in Event and thus
result in the Rights being exercisable to purchase Common Shares or other
securities as described below.
Under the Rights Agreement, in the event (a "Flip-in Event") that (i)
any person or group, together with its affiliates and associates, becomes an
Acquiring Person, (ii) any Acquiring Person or any affiliate or associate
thereof merges into or combines with the Company and the Company is the
surviving corporation, (iii) any Acquiring Person or any affiliate or associate
thereof effects certain other transactions with the Company, or (iv) during such
time as there is an Acquiring Person the Company effects certain transactions,
in each case as described in the Rights Agreement, then, in each such case,
proper provision will be made so that from and after the later of the
Distribution Date and the date of the occurrence of such Flip-in Event each
holder of a Right, other than Rights that are or were owned beneficially by an
Acquiring Person (which, from and after the date of a Flip-in Event, will be
void), will have the right to receive, upon exercise thereof at the then-current
exercise price of the Right, that number of Common Shares (or, under certain
circumstances, an economically equivalent security or securities of the Company)
that at the time of such Flip-in Event have a market value of two times the
exercise price of the Right.
In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person and
the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the Company is the surviving corporation, but all or part
of the Common Shares are changed or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) 50% or more of the
Company's assets or earning power, including securities creating obligations of
the Company, are sold, in each case as described in the Rights Agreement, then,
in each such case, proper provision will be made so that from and after the
latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-over Event each holder of a Right, other than Rights
which have become void, will have the right to receive, upon the exercise
thereof at the then-current exercise price of the Right, that number of shares
of common stock (or, under certain circumstances, an economically equivalent
security or securities) of such other person that at the time of such Flip-over
Event have a market value of two times the exercise price of the Right.
From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will be
exercisable to purchase Common Shares as
C-3
<PAGE> 61
described above, upon payment of the aggregate exercise price in cash. In
addition, at any time after the later of the Share Acquisition Date and the
Distribution Date and prior to the acquisition by any person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Company may exchange the Rights (other than any rights that have
become void), in whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or fractional Common Shares or other
securities issuable upon the exercise of Rights. In lieu of issuing such
securities, the Company may make a cash payment, as provided in the Rights
Agreement.
The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of (i) the
Distribution Date and (ii) the date of the first occurrence of a Flip-in Event
or Flip- over Event. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The Rights Agreement may be amended by the Company without the approval
of any holders of Rights Certificates, including amendments that increase or
decrease the Purchase Price, that add other events requiring adjustment to the
Purchase Price payable and the number of the Preferred Shares or other
securities issuable upon the exercise of the Rights or that modify procedures
relating to the redemption of the Rights, except that no amendment may be made
that decreases the stated Redemption Price to an amount less than $.01 per
Right.
The Board will have the exclusive power and authority to administer the
Rights Agreement and to exercise all rights and powers specifically granted to
the Board or to the Company therein, or as may be necessary or advisable in the
administration of the Rights Agreement, including without limitation the right
and power to interpret the provisions of the Rights Agreement and to make all
determinations deemed necessary or advisable for the administration of the
Rights Agreement (including any determination to redeem or not redeem the Rights
or to amend or not amend the Rights Agreement). All such actions, calculations,
interpretations and determinations (including any omission with respect to any
of the foregoing) which are done or made by the Board in good faith will be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and will not subject
C-4
<PAGE> 62
the Board to any liability to any person, including without limitation the
Rights Agent and the holders of the Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.
C-5
<PAGE> 1
EXHIBIT 99.1
------------
JUNE 19, 1997
To Our Stockholders:
We are pleased to inform you that RMI Titanium Company has adopted a
share purchase rights plan.
This action was taken after long and careful study and was not taken in
response to any pending takeover or proposed change in control of the Company.
The plan is intended to protect the Company and its stockholders from
potentially coercive takeover practices or takeover bids which are inconsistent
with the interests of the Company and its stockholders. The plan is not intended
to deter unsolicited offers that would provide superior long-term value to all
of the Company's stockholders. The adoption of a share purchase rights plan has
become common practice in major American companies and a well accepted approach
to ensuring that all stockholders receive a fair price and are treated equally
in the event of a takeover.
To effect the plan, the Board of Directors declared a dividend of one
share purchase right for each outstanding share of the Company's common stock.
The distribution is being made to stockholders of record as of June 19, 1997.
Under the plan, the rights will initially trade together with the
Company's common stock and will not be exercisable. In the absence of further
board action, the rights generally will become exercisable and allow the holder
to acquire the Company's common stock at a discounted price if a person or
group acquires 20% or more, (or 30% for USX Corporation since it currently owns
27%) of the outstanding shares of RMI Titanium Company common stock. Rights
held by persons who exceed the applicable threshold will be void. Under certain
circumstances, the rights will entitle the holder to buy shares in an acquiring
entity at a discounted price.
The Company's Directors may, at their option, redeem all rights for
$.01 per right, generally at any time prior to the rights becoming exercisable.
The rights will expire June 19, 2007, unless earlier redeemed, exchanged or
amended by the Directors.
The issuance of the rights is not a taxable event, will not affect the
Company's reported financial condition or results of operations (including
earnings per share), should not interfere with the Company's operating,
financing or investing activities
<PAGE> 2
and will not change the way in which the Company's common stock
is currently traded.
A summary of the share purchase rights plan (which explains the terms
and nature of the rights) is enclosed. Stockholders are urged to review the
summary carefully and retain it with their permanent records.
In adopting the share purchase rights plan, the Directors have
expressed their confidence in the Company's future and its determination that
you, our stockholders, be given every opportunity to participate fully in that
future.
On Behalf of the Directors,
Timothy G. Rupert
Executive Vice President
and Chief Financial Officer
-2-
<PAGE> 1
EXHIBIT 99.2
------------
FOR IMMEDIATE RELEASE CONTACT:
- --------------------- -------
June 10, 1997 Crystal L. Revak, Director
Investor Relations
(330) 544-7622
RMI TITANIUM COMPANY ANNOUNCES INVESTMENT.
RIGHTS PLAN ALSO ADOPTED.
Niles, Ohio - RMI Titanium Company (NYSE; RTI) announced today
its intention to invest in Galt Alloys, Inc., located in Canton, Ohio. Galt is
the largest domestic manufacturer of ferrotitanium and a producer and worldwide
distributor of specialty alloys to ferrous and nonferrous customers. The two
companies have signed a letter of intent for a transaction that would result in
RMI owning 90% of Galt's common stock and Galt undertaking a major expansion
program designed to enable Galt to better serve the titanium industry and its
customers.
The expansion, estimated to cost approximately $18 million,
will include a new scrap preparation facility, a plasma consolidation furnace
with a 5 million pound annual capacity and a plasma hearth furnace with a 7
million pound annual capacity. The scrap preparation line is expected to be
operational in mid 1998. The consolidation furnace is expected to be in
production by the end of 1998 and the hearth furnace in early 1999.
RMI, which has the industry's largest domestic capacity for
vacuum arc melting, currently purchases scrap preparation and hearth melting
services from third parties. The investment in Galt will enable RMI to reduce
its costs for these services, increase its utilization of lower cost scrap and
increase throughput at its mill product facility in Niles.
The transaction is subject to certain conditions including
regulatory filings and is expected to be completed by July 31, 1997.
(more)
<PAGE> 2
RMI TITANIUM COMPANY
June 10, 1997
Page 2 of 2
In an unrelated action, RMI's board adopted a share purchase
rights plan that provides for rights to be issued to stockholders of record on
June 19, 1997.
According to Timothy G. Rupert, Executive Vice President and
Chief Financial Officer, "This action was taken after long and careful study,
and was not taken in response to any pending takeover or proposed change in
control of the Company. The Rights Plan is intended to protect the Company and
its stockholders from potentially coercive takeover practices or takeover bids
which are inconsistent with the interests of the Company and its stockholders.
The adoption of a share purchase rights plan has become common practice in major
American companies and a well-accepted approach to ensuring that all
stockholders receive a fair price and are treated equally in the event of a
takeover."
Under the plan, the rights will initially trade together with
RMI Titanium Company common stock and will not be exercisable. In the absence of
further board action, the rights generally will become exercisable and allow the
holder to acquire RMI Titanium Company common stock at a discounted price if a
person or group acquires 20 percent or more (or 30% for USX Corporation since it
currently owns 27%) of the outstanding shares of RMI Titanium Company common
stock. Rights held by persons who exceed the applicable threshold will be void.
Under certain circumstances, the rights will entitle the holder to buy shares in
an acquiring entity at a discounted price.
RMI Titanium Company's Directors may, at their option, redeem
all rights for $.01 per right, generally at any time prior to the rights
becoming exercisable. The rights will expire June 19, 2007, unless earlier
redeemed, exchanged or amended by the Directors.
The issuance of the rights is not a taxable event, will not
affect RMI Titanium Company's reported financial condition or results of
operations (including earnings per share) and will not change the way in which
RMI Titanium Company common stock is currently traded.
RMI Titanium Company, headquartered in Niles, Ohio,
manufactures titanium mill products, hot-formed and superplastically formed
parts, and titanium powder. The Company's products are used for fabricated
components in commercial and military aircraft and engines, energy exploration
and refining, chemical processing equipment, pulp and paper production
facilities, medical implants and consumer goods.
# # #
