<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASS OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE ST. PAUL COMPANIES, INC.
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0518860
--------------------------------------- --------------------
(State of incorporation or organization) (IRS Employer
Identification No.)
385 Washington Street, St. Paul, MN 55102
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
If this Form relates to the reg- If this form relates to the reg-
istration of a class of debt istration of a class of debt
securities and is effective upon securities and is to become ef-
filing pursuant to General In- fective simultaneously with the
struction A(c)(1) please check effectiveness of a concurrent
the following box. 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
------------------- ------------------------------
Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
--------------------------------------------------------------------
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
The response to Item 1 is hereby amended to
read in its entirety as follows:
On December 4, 1989, the Board of Directors of
The St. Paul Companies, Inc., a Minnesota corporation
(the "Company"), declared a dividend payable December 19,
1989 of one right (a "Right") for each outstanding share
of common stock, without par value ("Common Stock"), of
the Company held of record at the close of business on
December 19, 1989 (the "Record Date"), or issued thereaf-
ter and prior to the close of business on the earlier of
the Separation Date (as hereinafter defined) and the
Expiration Date (as hereinafter defined). The Rights
were issued pursuant to a Shareholder Protection Rights
Agreement, dated as of December 4, 1989, as amended as of
March 9, 1990, and as amended and restated as of August
1, 1995 (the "Rights Agreement"), between the Company and
First Chicago Trust Company of New York, as Rights Agent
(the "Rights Agent"). Each Right entitles its registered
holder to purchase from the Company, after the Separation
Date, one two-thousandth of a share of Series A Junior
Participating Preferred Stock, without par value ("Par-
ticipating Preferred Stock"), for $92.50 (the "Exercise
Price"), subject to further adjustment.
The Rights will be evidenced by the Common
Stock certificates until the close of business on the
earlier of the Separation Date and the Expiration Date.
The "Separation Date" is defined as the close of business
on the earlier of (i) the tenth day after the first date
of public announcement by the Company or by any Person
(as defined in the Rights Agreement) who is a Beneficial
Owner (as defined in the Rights Agreement) of 15% or more
of the outstanding shares of Common Stock (any Person
having such Beneficial Ownership being referred to as an
"Acquiring Person") that an Acquiring Person has become
such (the "Stock Acquisition Date"), (ii) the tenth
business day after the date of the commencement of, or
first public announcement of the intent of any Person
(other than the Company, any Subsidiary of the Company,
or any employee stock ownership or other employee benefit
plan of the Company or any Subsidiary of the Company) to
commence, a tender or exchange offer which, if consummat-
<PAGE>
ed, would result in such person acquiring Beneficial
Ownership (when added to any shares as to which such
Person is the Beneficial Owner immediately prior to such
tender or exchange offer) of 15% or more of the outstand-
ing shares of Common Stock and (iii) the tenth business
day after the Board of Directors of the Company deter-
mines that a Person is an Adverse Person (as hereinafter
defined), provided that if the foregoing results in the
Separation Date being prior to the Record Date, the
Separation Date shall be the Record Date. In order to
declare a Person to be an Adverse Person, the Board of
Directors must determine that such Person, alone or
together with its Affiliates and Associates, has become
the Beneficial Owner of a number of shares of Common
Stock which the Board of Directors of the Company deter-
mines to be substantial (which number of shares shall in
no event represent less than 10% of the outstanding
shares of Common Stock) and a determination by the Board
of Directors of the Company after reasonable inquiry and
investigation, including consultation with such persons
as such directors shall deem appropriate and consider-
ation of such factors as are permitted by applicable law,
that (a) such Beneficial Ownership by such Person is
intended to cause the Company to repurchase the shares of
Common Stock Beneficially Owned by such person or to
cause pressure on the Company to take action or enter
into a transaction or series of transactions intended to
provide such Person with short-term financial gain under
circumstances where the Board of Directors determines
that the best long-term interests of the Company would
not be served by taking such action or entering into such
transaction or series of transactions at that time or (b)
such Beneficial Ownership is causing or reasonably likely
to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its
competitive position) on the business or prospects of the
Company, on the Company's employees, customers, suppliers
or creditors or on the communities in which the Company
operates or is located.
The Rights Agreement provides that, until the
close of business on the Separation Date, the Rights will
be transferred with and only with the Common Stock.
Common Stock certificates issued or distributed after the
Record Date but prior to the close of business on the
earlier of the Separation Date or the Expiration Date
<PAGE>
shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorpo-
rating by reference the terms of the Rights Agreement (as
such may be amended from time to time). Notwithstanding
the absence of the aforementioned legend, certificates
evidencing shares of Common Stock that are issued and
outstanding on the Record Date shall also evidence one
Right for each share of Common Stock evidenced thereby.
After the close of business on the Separation Date,
separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of
Common Stock at the close of business on the Separation
Date. Common Stock issued after the Separation Date
will, in certain circumstances, be issued with Rights.
The Rights will not be exercisable until after
the Separation Date. The Rights will expire on the
earlier of (i) December 19, 1999 or, if the Separation
Date occurs subsequent to December 19, 1996 but prior to
December 19, 1999, the third anniversary of the Separa-
tion Date and (ii) the date on which the Rights are
redeemed as described below (in any such case, the "Expi-
ration Date").
The Exercise Price and the number of Rights
outstanding, or in certain circumstances the securities
purchasable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution in the
event of a Common Stock dividend on, or a subdivision or
a combination into a smaller number of shares of, Common
Stock, or the issuance or distribution of any securities
or assets in respect of, in lieu of or in exchange for
Common Stock.
In the event that (i) a Person becomes an
Acquiring Person or (ii) the Board of Directors declares
a Person to be an Adverse Person, following the Separa-
tion Date, each holder of a Right will thereafter have
the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the
Exercise Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events
set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights
Agreement) were, Beneficially Owned by any Acquiring
Person or Adverse Person will be null and void. However,
<PAGE>
Rights are not exercisable following the occurrence of
any of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set
forth below.
In the event that prior to the close of busi-
ness on the Expiration Date the Company enters into any
agreement with an Acquiring Person with respect to,
consummates, permits to occur or suffers to exist a
transaction or series of transactions after the time when
an Acquiring Person has become such in which, directly or
indirectly, (i) the Company shall consolidate with, or
merge with and into, any other Person (other than a
subsidiary of the Company) and the Company shall not be
the continuing or surviving corporation of such consoli-
dation or merger or (ii) any Person (other than a subsid-
iary of the Company) shall engage in a share exchange
with or shall consolidate with, or merge with or into,
the Company and the Company shall be the continuing or
surviving corporation of such share exchange, consolida-
tion or merger and, in connection with such share ex-
change, consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into
or exchanged for stock or other securities of any other
Person or cash or any other property or (iii) the Company
shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets
or earning power of the Company and its subsidiaries
(taken as a whole) to any Person or Persons (other than
the Company or any subsidiary of the Company) (a
"Flip-over Transaction or Event"), the Company shall take
such action as shall be necessary to ensure and provide,
and shall not enter into, consummate, permit to occur or
suffer to exist such Flip-over Transaction or Event until
it shall have entered into a supplemental agreement with
the Flip-over Entity (as defined in the Rights Agree-
ment), for the benefit of the holders of the Rights, pro-
viding that upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right (other than
those Beneficially Owned by any Acquiring Person) shall
thereafter constitute the right to purchase from the
Flip-over Entity, upon exercise thereof in accordance
with the terms of the Rights Agreement, that number of
shares of common stock of the Flip-over Entity having a
market value on the date of consummation or occurence of
<PAGE>
such Flip-over Transaction or Event equal to twice the
Exercise Price and (ii) the Flip-over Entity shall there-
after be liable for, and shall assume, by virtue of such
Flip-over Transaction or Event and such supplemental
agreement, all the obligations and duties of the Company
pursuant to the Rights Agreement.
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.005 per Right,
subject to further adjustment (the "Redemption Price").
Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors (as
hereinafter defined). Immediately upon the action of the
Board of Directors of the Company electing to redeem the
Rights, with, where required, the concurrence of the
Continuing Directors, without any further action and
without any notice, the right to exercise the Rights will
terminate and each Right will thereafter represent only
the right to receive the Redemption Price. The term
"Continuing Director" means (i) any member of the Board
of Directors who becomes a director prior to the earlier
of (a) the date a Person becomes an Acquiring Person and
(b) the date a Person who intends to take action which
would result in any event described in the preceding two
paragraphs obtains majority control of the Board by means
of a proxy or consent solicitation or (ii) any director
who subsequently becomes a member of the Board whose
nomination for election was approved by a majority of
Continuing Directors.
Other than those provisions relating to the
principal economic terms of the Rights, any of the provi-
sions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Separation Date.
After the Separation Date, the provisions of the Rights
Agreement may be amended by the Board (i) in order to
cure any ambiguity, (ii) in order to make changes which
do not adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person
or Adverse Person), or (iii) with, where required, the
concurrence of the Continuing Directors, in order to
shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust
the time period governing redemption shall be made at
such time as the Rights are not redeemable.
<PAGE>
The holders of Rights will, solely by reason of
their ownership of Rights, have no rights as stockholders
of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights will not prevent a takeover of the
Company at a full and fair price. However, the Rights
may cause substantial dilution to a person or group that
acquires 15% or more of the Common Stock unless the
Rights are first redeemed by the Board of Directors of
the Company. Nevertheless, the Rights should not inter-
fere with any merger or other business combination that
is in the best interests of the Company and its share-
holders because the Rights can be redeemed prior to the
tenth day (or such earlier or later date as the Board may
decide) after the Stock Acquisition Date.
As of August 18, 1995, there were 84,541,091
shares of Common Stock outstanding. Each share of Common
Stock has one Right attached thereto. As long as the
Rights are attached to the Common Stock, the Company will
issue one Right with each new share of Common Stock so
that all such shares will have Rights attached.
The Rights Agreement (and exhibits thereto) is
an exhibit hereto and is incorporated herein by refer-
ence. The foregoing description of the Rights is quali-
fied in its entirety by reference to the Rights Agreement
(and the exhibits thereto).
Item 2. Exhibits.
The response to Item 2 is hereby amended to
read in its entirety as follows:
1. Shareholder Protection Rights Agreement,
dated as of December 4, 1989, as amended as of March 9,
1990, and as amended and restated as of August 1, 1995,
between the Company and First Chicago Trust Company of
New York, as Rights Agent, which includes as Exhibit B
thereto the Form of Rights Certificate.
<PAGE>
SIGNATURE
Pursuant to the requirements of the 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 thereunto duly autho-
rized.
THE ST. PAUL COMPANIES, INC.
By /s/ Bruce A. Backberg
----------------------
Bruce A. Backberg
Vice President and
Secretary
Date: August 21, 1995
<PAGE>
EXHIBIT INDEX
Exhibit Description How Filed
------- ---------------------- ---------
1 Shareholder Protection Rights
Agreement, dated as of
December 4, 1989, as amended as
of March 9, 1990, and as amend-
ed and restated as of August 1,
1995, between the Company and
First Chicago Trust Company of
New York, as Rights Agent,
which includes as Exhibit B
thereto the Form of Rights
Certificate. (1)
(1) Filed electronically under EDGAR Operational Program.
<PAGE>
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as
amended and restated, the "Agreement"), dated as of
December 4, 1989, between THE ST. PAUL COMPANIES, INC., a
Minnesota corporation (the "Company"), and FIRST CHICAGO
TRUST COMPANY OF NEW YORK, a New York corporation, as
Rights Agent (the "Rights Agent", which term shall in-
clude any successor Rights Agent hereunder), as amended
as of March 9, 1990 and as amended and restated as of
August 1, 1995.
WHEREAS, the Company and the Rights Agent
entered into the Shareholder Protection Rights Agreement,
dated as of December 4, 1989, as amended March 9, 1990
(the "Original Rights Agreement"), and in connection
therewith, the Board of Directors of the Company has
authorized and declared a dividend of one right ("Right")
in respect of each outstanding share of voting common
stock, without par value (the "Common Stock"), of the
Company held of record as of the close of business on
December 19, 1989 (the "Record Date") and has authorized
the issuance of one Right in respect of each share of
Common Stock which shall become issued and outstanding
thereafter and prior to the Separation Date (as herein-
<PAGE>
after defined) and, in certain circumstances, after the
Separation Date;
WHEREAS, each Right entitles the holder thereof
to purchase one two-thousandth (1/2000) of a share (ad-
justed hereby from 1/1000 of a share for the effect of
the Company's two-for-one stock split on May 17, 1994) of
Preferred Stock of the Company (or, in certain cases,
other capital stock of the Company or of certain other
entities) pursuant to the terms and subject to the condi-
tions set forth herein; and
WHEREAS, the Company and the Rights Agent wish
to amend and restate the Original Rights Agreement in its
entirety as follows:
NOW, THEREFORE, in consideration of the premis-
es and respective agreements set forth herein, the par-
ties hereby agree as follows:
Article I - Certain Definitions
1.1 Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding but shall not
include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary
of the Company or any Person or entity organized, ap-
pointed or established by the Company for or pursuant to
the terms of any such plan.
b) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon a determination that the
criteria set forth in Section 3.1(a) (ii) apply to such Person.
c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as such Rule is in
effect on the date of this Agreement.
d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own", any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agree-
ment, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, ex-
change rights, other rights, warrants or options, or
<PAGE>
otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially
Own", (A) securities tendered pursuant to a tender or ex-
change offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were ac-
quired by such Person or any of such Person's Affiliates
or Associates prior to the Separation Date or pursuant to
Section 2.3(c) or Section 5.3; (ii) which such Person or
any of such Person's Affiliates or Associates, directly
or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule
13d-3 under the Securities Exchange Act of 1934), in-
cluding pursuant to any agreement, arrangement or under-
standing, whether or not in writing; provided, however,
that a Person shall not be deemed the "Beneficial Owner"
of, or to "Beneficially Own", any security under this
clause (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement,
<PAGE>
arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the rules under the
Securities Exchange Act of 1934, and (B) is not also then
reportable by such Person on Schedule 13D under the
Securities Exchange Act of 1934 (or any comparable or
successor report); or (iii) which are beneficially owned,
directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described
in the proviso to clause (ii) of this paragraph (d)) or
disposing of any voting securities of the Company; pro-
vided, however, that nothing in this paragraph (d) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "Beneficially
Own", any securities acquired through such
Person's participation in good faith in a firm-commitment
underwriting until the expiration of 40 days after the
date of such acquisition. For purposes of this Agree-
ment, in determining the percentage of the outstanding
<PAGE>
shares of Common Stock with respect to which a Person is
the Beneficial Owner, all shares as to which such Person
is deemed the Beneficial Owner shall be deemed outstand-
ing.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the City
of New York are generally authorized or obligated by law
or executive order to close.
(f) The "close of business" on any given date shall mean
5:00 p.m., Minnesota time, on such date; provided, howev-
er, that if such date is not a Business Day it shall mean
5:00 p.m., Minnesota time, on the next succeeding Busi-
ness Day.
(g) "Continuing Director" shall mean a director who either
(i) has been a member of the Board of Directors of the
Company since prior to the earlier of (A) the date a
Person becomes an Acquiring Person and (B) the date of a
change in a majority of directors resulting from a proxy
or consent solicitation as set forth in clause (ii) of
the first proviso to Section 5.1(a) or (ii) became a
director of the Company subsequent to such date and whose
election, or nomination for election by the Company's
shareholders, was duly approved by the Continuing Direc-
tors then on the Board, either by a specific vote or by
<PAGE>
approval of the proxy materials of the Company on behalf
of the Board of Directors in which such person is named
as nominee for director; provided, however, that in no
event shall a director be considered a "Continuing Direc-
tor" if such director is an Acquiring Person or Adverse
Person or an Affiliate or Associate thereof.
(h) "Exchange Time" shall mean the time at which the right
to exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
(i) "Exercise Price" shall mean, as of any date, the price
at which a holder may purchase the securities issuable
upon exercise of one whole Right. Until adjustment
thereof in accordance with the terms hereof, the Exercise
Price shall equal $92.50 (as adjusted from the original
Exercise Price of $185.00 to reflect the Company's two-for-one stock
split on May 17, 1994).
(j) "Expiration Date" shall mean the earlier of (i) the
Final Expiration Date, (ii) the Exchange Time and (iii)
the Redemption Date.
(k) "Final Expiration Date" shall mean December 19, 1999 or,
if the Separation Date occurs subsequent to December 19,
<PAGE>
1996 but prior to December 19, 1999, the third anniversa-
ry of the Separation Date.
(l) "Flip-in Date" shall mean the 10th day after any Stock
Acquisition Date which is not the result of a Flip-over
Transaction or Event.
(m) "Flip-over Entity", for purposes of Section 3.2, shall
mean, (i) in the case of a Flip-over Transaction or Event
described in clause (i) or (ii) of the definition
thereof, the Person issuing any securities into which
shares of Common Stock are being converted or exchanged
and, if no such securities are being issued, the other
party to such Flip-over Transaction or Event and, (ii) in
the case of a Flip-over Transaction or Event referred to
in clause (iii) of the definition thereof, the Person
receiving the greatest portion of the assets or earning
power being transferred in such Flip-over Transaction or
Event, provided in all cases that if such Person is a
subsidiary of a corporation, the parent corporation shall
be the Flip-over Entity.
(n) "Flip-over Stock" shall mean the capital stock (or
similar equity interest) with the greatest voting power
in respect of the election of directors (or persons
<PAGE>
similarly responsible for direction of the business and
affairs) of the Flip-over Entity.
(o) "Flip-over Transaction or Event" shall mean a trans-
action or series of transactions following a Stock Acquisition Date
in which, directly or indirectly, (i) the
Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 3.1(e)) and
the Company shall not be the continuing or surviving
corporation of such consolidation or merger or (ii) any
Person (other than a Subsidiary of the Company in a
transaction which complies with Section 3.1(e)) shall
engage in a share exchange with or shall consolidate
with, or merge with or into, the Company and the Company
shall be the continuing or surviving corporation of such
share exchange, consolidation or merger and, in connection with
such share exchange, consolidation or merger,
all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating
<PAGE>
more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsid-
iary of the Company in one or more transactions each of
which complies with Section 3.1(e)).
(p) "Market Price" per share of any securities on any date
of determination shall mean the average of the daily
closing prices per share of such securities (determined
as described below) on each of the 20 consecutive Trading
Days through and including the Trading Day immediately
preceding such date; provided, however, that if an event
of a type analogous to any of the events described in
Section 2.4 hereof shall have caused the closing prices
used to determine the Market Price on any Trading Days
during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such
closing price so used shall be appropriately adjusted in
order to make it fully comparable with the closing price
on such date. The closing price per share of any securi-
ties on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is
quoted on such date, the average of the closing bid and
<PAGE>
asked prices, regular way, for each share of such securities, in either
in either case as reported in the prinicipal consolidated
transactions reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange, Inc. or, if the securities are not listed
or admitted to trading on the New York Stock Exchange,
Inc., as reported in the principal consolidated transac-
tion reporting system with respect to securities listed
on the principal national securities exchange on which
the securities are listed or admitted to trading or, if
the securities are not listed or admitted to trading on
any national securities exchange, as reported by the
Nasdaq Stock Market or such other system then in use, or,
if on any such date the securities are not listed or
admitted to trading on any national securities exchange
or 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 securi-
ties selected by the Board of Directors of the Company;
provided, however, that if on any such date the securities are
not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter
market, the closing price per share of such securities on
such date shall mean the fair value per share of such
<PAGE>
securities on such date as determined in good faith by
the Board of Directors of the Company, after consultation
with a nationally recognized investment banking firm, and
set forth in a certificate delivered to the Rights Agent.
(q) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5
under the Securities Exchange Act of 1934, as such Rule
is in effect on the date of this Agreement), corporation
or other entity.
(r) "Preferred Stock" shall mean the series of Preferred
Stock, without par value, of the Company created by a
Statement with respect to Preferred Stock in substan-
tially the form set forth in Exhibit C hereto appropri-
ately completed.
(s) "Redemption Date" shall mean the date selected by the
Board of Directors to redeem the Rights pursuant to
Section 5.1 hereof.
(t) "Redemption Price" shall mean $.005 per Right (as adjusted
from the original Redemption Price of $.01 per
Right to reflect the Company's two-for-one stock split on
May 17, 1994), appropriately adjusted to reflect any
further stock split, stock dividend or similar trans-
action.
<PAGE>
(u) "Separation Date" shall mean the close of business on
the earliest of (i) the Flip-in Date, (ii) the 10th
Business Day (or such later date as the Board of Directors shall
determine after the date of the commencement
of, or first public announcement of the intent of any
Person (other than the Company, any Subsidiary of the
Company or any employee stock ownership or other employee
benefit plan of the Company or any Subsidiary of the
Company) to commence, a tender or exchange offer which,
if consummated, would result in such Person acquiring
Beneficial Ownership (when added to any shares as to
which such Person is the Beneficial Owner immediately
prior to such tender or exchange offer) of 15% or more of
the outstanding shares of Common Stock and (iii) the 10th
Business Day after the Board of Directors determines,
pursuant to the criteria set forth in Section 3.1(a)(ii)
hereof, that a Person is an Adverse Person; provided that
if any of the foregoing results in the Separation Date
being prior to the Record Date, the Separation Date shall
be the Record Date.
(v) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this defini-
tion, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Securities Exchange
<PAGE>
Act of 1934) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(w) "Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the
voting power of the equity securities or a majority of
the equity interest is Beneficially Owned, directly or
indirectly, by such Person.
(x) "Trading Day", when used with respect to any securities,
shall mean a day on which the New York Stock Exchange,
Inc. is open for the transaction of business or, if such
securities are not listed or admitted to trading on the
New York Stock Exchange, Inc., a day on which the princi-
pal national securities exchange on which such securities
are listed or admitted to trading is open for the trans-
action of business or, if the securities are not listed
or admitted to trading on any national securities ex-
change, a Business Day.
(y) "Triggering Event" shall mean any Section 3.1(a) Event
(as such term is defined in Section 3.1(a)) or any Flip-over
Transaction or Event.
<PAGE>
Article II - The Rights
2.1 Summary of Rights. As soon as practicable after the
Record Date, the Company will mail a copy of a letter to
shareholders summarizing the terms of the Rights, in
substantially the form of Exhibit A hereto, to each
holder of record of Common Stock as of the close of
business on such Record Date, at such holder's address as
shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Common Stock cer-
tificates issued after the date of this Agreement but
prior to the close of business on the Separation Date
shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed
on, written on or otherwise affixed to them the following
legend:
Until the close of business on the Separation
Date (as defined in the Rights Agreement re-
ferred to below), this certificate also evi-
dences and entitles the holder hereof to cer-
tain Rights as set forth in a Rights Agreement,
dated as of December 4, 1989 (as such may be
amended from time to time, the "Rights Agree-
ment"), between The St. Paul Companies, Inc.
and First Chicago Trust Company of New York, as
Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal executive
offices of The St. Paul Companies, Inc. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed,
may be exchanged for shares of Common Stock or
other securities or assets of the Company or a
<PAGE>
Subsidiary of the Company, may expire, may
become void (if they are "Beneficially Owned"
by an "Acquiring Person" or "Adverse Person" or
an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or
by any transferee of any of the foregoing) or
may be evidenced by separate certificates and
may no longer be evidenced by this certificate.
The St. Paul Companies, Inc. will mail or ar-
range for the mailing of a copy of the Rights
Agreement to the holder of this certificate
without charge within five days after the re-
ceipt of a written request therefor.
Certificates representing shares of Common Stock that
were issued and outstanding at the Record Date shall
evidence one Right for each share of Common Stock evi-
denced thereby despite the absence of the foregoing
legend, and certificates representing shares of Common
Stock issued after the Record Date but prior to the date
hereof bearing the form of legend set forth in the Origi-
nal Rights Agreement shall evidence one Right for each
share of Common Stock on the terms set forth in this
Agreement. To the extent provided in Section 5.3, Rights
shall be issued with respect to shares of Common Stock
which are issued or sold after the Separation Date.
2.3 Separation and Exercise. (a) Subject to the terms
hereof (including Sections 3.1, 5.1 and 5.16) and subject
to adjustment as herein set forth, each Right will enti-
tle the holder thereof, after the Separation Date and
prior to the Expiration Date, to purchase, for the Exer-
<PAGE>
cise Price, one two-thousandth (1/2000) of a share of
Preferred Stock.
(b) Until the close of business on the Separation Date, (i)
no Right may be exercised, and (ii) each Right will be
evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates
issued prior to the Record Date, with the letter mailed
to the record holder thereof pursuant to Section 2.1) and
will be transferable only together with, and will be
transferred by a transfer (whether with or without such
letter) of, such associated share.
(c) Subject to the terms hereof (including Sections 3.1, 5.1
and 5.16), after the close of business on the Separation
Date and prior to the close of business on the Expiration
Date, the Rights (i) may be exercised and (ii) may be
transferred independently of shares of Common Stock.
Promptly following the Separation Date, the Rights Agent
will mail to each holder of record of Common Stock as of
the close of business on the Separation Date (other than
any Person whose Rights have become void pursuant to
Section 3.1(b)), at such holder's address as shown by the
records of the Company (the Company hereby agreeing to
furnish copies of such records to the Rights Agent for
<PAGE>
this purpose), (1) a certificate (a "Rights Certificate")
in substantially the form of Exhibit B hereto appropri-
ately completed, representing the number of Rights held
by such holder at the close of business on the Separation
Date and having such marks of identification or designa-
tion 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 law or with any
rule or regulation made pursuant thereto or with any rule
or regulation of any national securities exchange or
quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (2)
a disclosure statement describing the Rights.
(d) Subject to the terms hereof (including Sections 3.1, 5.1
and 5.16), Rights may be exercised on any Business Day
after the close of business on the Separation Date and
prior to the close of business on the Expiration Date by
submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an
"Election to Exercise") substantially in the form at-
tached to the Rights Certificate duly completed, accompa-
nied by payment in cash, or by certified check, bank
check or money order payable to the order of the Company,
<PAGE>
of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to
cover any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or deliv-
ery of certificates for shares or depositary receipts (or
both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election
to Exercise accompanied by payment as set forth in Sec-
tion 2.3(d) above, and subject to the terms hereof, the
Rights Agent will thereupon promptly (i) (A) requisition
from a transfer agent stock certificates evidencing such
number of shares of Preferred Stock, Common Stock or
other securities to be purchased (the Company hereby
irrevocably authorizing its transfer agents to comply
with all such requisitions) and, (B) if the Company
elects pursuant to Section 5.17 hereof not to issue
certificates representing fractional shares, requisition
from the depositary selected by the Company depositary
receipts representing the fractional shares to be pur-
chased or requisition from the Company the amount of cash
to be paid in lieu of fractional shares in accordance
with Section 5.17 hereof and, (ii) after receipt of such
<PAGE>
certificates, depositary receipts and/or cash, cause the
same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered (in
the case of certificates or depository receipts) in such
name or names as may be designated by such holder.
fIn case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights
Certificate, a new Rights Certificate evidencing the
Rights remaining unexercised will be issued by the Rights
Agent to such holder or to such holder's duly authorized
assigns.
(g) The Company covenants and agrees that it will (i) cause
to be reserved and kept available until the Expiration
Date out of its authorized and unissued or treasury
shares of capital stock a number of shares of Preferred
Stock that will be sufficient to permit the exercise in
full of all outstanding Rights; (ii) take all such action
as may be necessary to ensure that all shares of capital
stock delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered and
fully paid and nonassessable; (iii) take all such action
<PAGE>
as may be necessary to comply with any applicable re-
quirements of the Securities Act of 1933 or the Securi-
ties Exchange Act of 1934, and the rules and regulations
thereunder, and any other applicable law, rule or regula-
tion, in connection with the issuance of any shares of
capital stock upon exercise of the Rights; (iv) if and
for so long as any shares of Preferred Stock are listed
on any national securities exchange, use its best efforts
to cause all shares of Preferred Stock issued upon exercise of
Rights to be listed on such exchange upon issuance; and (v)
pay when due and payable any and all federal
al and state transfer taxes and charges which may be
payable in respect of the original issuance or delivery
of the Rights Certificates or of any shares of capital
stock issued upon the exercise of Rights; provided that
the Company shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certifi-
cates or the issuance or delivery of certificates for
shares in a name other than that of the holder of the
Rights being transferred or exercised.
2.4 Exercise Price, Number of Rights. (a) In the event the
Company shall at any time after the Record Date and prior
<PAGE>
to the close of business on the Separation Date (i) de-
clare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller
number of shares of Common Stock, then (A) (x) the Exer-
cise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common
Stock (the "Expansion Factor") that a holder of one share
of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a
result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the
Expansion Factor, and the adjusted number of Rights will
be deemed to be distributed among the shares of Common
Stock with respect to which the original Rights were
associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combi-
nation, so that each such share of Common Stock will have
exactly one Right associated with it and (B) the number
of shares of Preferred Stock for which a Right is exercisable
shall be adjusted by dividing the number of
shares of Preferred Stock for which a right is exercisable
<PAGE>
immediately prior to such adjustment by the Expan-
sion Factor. Each adjustment made pursuant to this para-
graph shall be made as of the payment or effective date
for the applicable dividend, subdivision or combination.
In the event the Company shall at any time
after the Record Date and prior to the close of business
on the Separation Date issue any shares of Common Stock
otherwise than in a transaction referred to in the pre-
ceding paragraph, each such share of Common Stock so
issued shall automatically have one new Right associated
with it, which Right shall be evidenced by the certifi-
cate representing such share. To the extent provided in
Section 5.3, Rights shall be issued with respect to
shares of Common Stock which are issued and sold after
the Separation Date.
(b) In the event the Company shall at any time after the
Record Date and prior to the close of business on the
Separation Date issue or distribute any securities or
assets in respect of, in lieu of or in exchange for
Common Stock (other than pursuant to a regular periodic
cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapital-
ization (including any such transaction involving a
merger, consolidation or binding share exchange), or
<PAGE>
otherwise, the Company shall make such adjustments, if
any, in the Exercise Price, number of Rights and/or
securities or other property purchasable upon exercise of
Rights as the Board of Directors of the Company, in its
sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests
of the holders of Rights generally, and the Company
and the Rights Agent shall amend this Agreement as necessary to
provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent.
Whenever an adjustment to the Exercise Price is made
pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjust-
ment and a brief statement of the facts accounting for
such adjustment, (ii) promptly file with the Rights Agent
and with each transfer agent for the Common Stock a copy
of such certificate and (iii) mail a brief summary there-
of to each holder of Rights.
(d) Irrespective of any adjustment or change in the secu-
rities purchasable upon exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the securities so purchasable which
<PAGE>
were expressed in the initial Rights Certificates issued
hereunder.
2.5 Date on Which Exercise Is Effective. Each Person in
whose name any certificate for shares of capital stock is
issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment
of the Exercise Price for such Rights (and any applicable
taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date
upon which the stock transfer books of the Company are
closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. The Rights Certificates shall be executed
on behalf of the Company by its Chairman of the Board,
its President or one of its Vice Presidents, under its
<PAGE>
corporate seal reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature
of any of these officers on the Rights Certificates may
be manual or facsimile.
Rights Certificates bearing the manual or
facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Compa-
ny, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the countersig-
nature and delivery of such Rights Certificates.
Promptly after the Separation Date, the Company
will notify the Rights Agent of such Separation Date and
will deliver Rights Certificates executed by the Company
to the Rights Agent for countersignature, and subject to
Section 3.1(b), the Rights Agent shall manually counter-
sign and deliver such Rights Certificates to the holders
of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until
manually countersigned by the Rights Agent.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Date, the Company will cause to
be kept a register (the "Rights Register") in which,
subject to such reasonable regulations as it may pre-
scribe, the Company will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed
<PAGE>
"Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights
and transfers of Rights after the Separation Date as
herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all
reasonable times after the Separation Date.
After the Separation Date and prior to the
close of business on the Expiration Date, upon surrender
for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Sections
2.7(c) and (d) and 5.1, the Company will execute, and the
Rights Agent will countersign and deliver, in the name of
the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or
more new Rights Certificates evidencing the same aggre-
gate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Sections 3.1(b) and 5.1,
all Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obli-
gations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights
<PAGE>
surrendered upon such registration of transfer or ex-
change.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accom-
panied by a written instrument of transfer in form satis-
factory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such
holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate
under this Section 2.7, the Company may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation
thereto.
(d) The Company shall not be required to register the trans-
fer of or exchange any Rights after such Rights have
become void under Section 3.1(b), been exchanged under
Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certifi-
cates. (a) If any mutilated Rights Certificate is
surrendered to the Rights Agent prior to the close of
business on the Expiration Date, then, subject to Sec-
tions 3.1(b) and 5.1, the Company shall execute and the
Rights Agent shall countersign and deliver in exchange
<PAGE>
therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surren-
dered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the close of business on the Expi-
ration Date (i) evidence to their satisfaction of the de-
struction, loss or theft of any Rights Certificate and
(ii) such security or indemnity as may be required by
them to save each of them and any of their agents harm-
less, then, subject to Sections 3.1(b) and 5.1 and in the
absence of notice to the Company or the Rights Agent that
such Rights Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its request
the Rights Agent shall countersign and deliver, in lieu
of any such destroyed, lost or stolen Rights Certificate,
a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost
or stolen.
(c) As a condition to the issuance of any new Rights Cer-
tificate under this Section 2.8, the Company may require
the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and
<PAGE>
expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen
Rights Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at
any time enforceable by anyone, and, subject to Section
3.1(b), shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the close of business on
the Separation Date, the associated Common Stock certifi-
cate) for registration of transfer, the Company, the
Rights Agent and any agent of the Company or the Rights
Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the close of business on
the Separation Date, such Common Stock certificate) is
registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever,
including the payment of the Redemption Price, and nei-
ther the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in this Agree-
<PAGE>
ment, unless the context otherwise requires, the term
"holder" of any Rights shall mean the registered holder
of such Rights (or, prior to the close of business on the
Separation Date, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surren-
dered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be
promptly cancelled by the Rights Agent. The Company may
at any time deliver to the Rights Agent for cancellation
any Rights Certificates previously countersigned and
delivered hereunder which the Company may have acquired
in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in
lieu of or in exchange for any Rights Certificates can-
celled as provided in this Section 2.10, except as ex-
pressly permitted by this Agreement. The Rights Agent
shall destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company
<PAGE>
and the Rights Agent and with every other holder of
Rights that:
(a) prior to the close of business on the Separation Date,
each Right will be transferable only together with, and
will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Date, the Rights Certificates will
be transferable only on the Rights Register as provided
herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the close of business on the Separation Date,
the associated Common Stock certificate) for registration
of transfer, the Company, the Rights Agent and any agent
of the Company or the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to
the close of business on the Separation Date, the asso-
ciated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced there-
by for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to
the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become
void; and
<PAGE>
(e) this Agreement may be supplemented or amended from time
to time pursuant to Section 2.4(b) or 5.4 hereof.
Article III - Certain Transactions
3.1 Flip-in. (a) In the event that prior to the close of
business on the Expiration Date (i) any Person shall
become an Acquiring Person, unless the event causing such
Person to become an Acquiring Person is a Flip-over
Transaction or Event or is an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority of
the members of the Board of Directors who are not offi-
cers of the Company and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Per-
son, after receiving advice from one or more investment-banking
firms, to be (A) at a price which is fair to
shareholders (taking into account all factors which such
members of the Board deem relevant, including, without
limitation, prices which could reasonably be achieved if
the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (B) otherwise in
the best interests of the Company and its shareholders,
<PAGE>
or (ii) the Board of Directors of the Company shall de-
clare any Person to be an Adverse Person upon a determi-
nation that such Person, alone or together with its
Affiliates and Associates, has, at any time after this
Agreement has been filed with the Securities and Exchange
Commission as an exhibit to a filing under the Securities
Exchange Act of 1934, become the Beneficial Owner of a
number of shares of Common Stock which the Board of
Directors of the Company determines to be substantial
(which number of shares shall in no event represent less
than 10% of the outstanding shares of Common Stock) and a
determination by the Board of Directors of the Company,
after reasonable inquiry and investigation, including
consultation with such persons as such directors shall
deem appropriate and consideration of such factors as are
permitted by applicable law, that (a) such Beneficial
Ownership by such Person is intended to cause the Company
to repurchase the shares of Common Stock beneficially
owned by such Person or to cause pressure on the Company
to take action or enter into a transaction or series of
transactions intended to provide such Person with short-
term financial gain under circumstances where the Board
of Directors determines that the best long-term interests
of the Company would not be served by taking such action
<PAGE>
or entering into such transaction or series of transac-
tions at that time or (b) such Beneficial Ownership is
causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on
the business or prospects of the Company, on the Company's
employees, customers, suppliers or creditors or on
the communities in which the Company operates or is
located, then, promptly following the occurrence of any
event described in this Section 3.1(a)(i) or (ii) (a
"Section 3.1(a) Event"), proper provision shall be made
so that each holder of a Right (except as provided in
Section 3.1(b)) shall thereafter have the right to re-
ceive, upon exercise thereof at the then-current Exercise
Price in accordance with the terms of this Agreement, in
lieu of a number of one two-thousandths of a share of
Preferred Stock (as from time to time adjusted), such
number of shares of Common Stock of the Company as shall
equal the result obtained by dividing (x) the then-cur-
rent Exercise Price by (y) 50% of the Market Price per
share of Common Stock on the date of the first occurrence
of a Section 3.1(a) Event (such number of shares, the
"Adjustment Shares"); provided that the Exercise Price
<PAGE>
and the number of Adjustment Shares shall be further
adjusted, as appropriate, in order to protect the inter-
ests of the holders of Rights generally in the event that
on or after the date of such first occurrence an event
analogous to any of the events described in Section
2.4(a) or (b) shall have occurred.
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition
Date by an Acquiring Person or an Adverse Person or an
Affiliate or Associate thereof or by any transferee,
direct or indirect, of any of the foregoing shall become
void, and any holder of such Rights (including trans-
ferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agree-
ment. If any Rights Certificate is presented for assign-
ment or exercise and the Person presenting the same will
not complete the certification set forth at the end of
the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of
the Beneficial Owner and its Affiliates and Associates
(or former Beneficial Owners and their Affiliates and
Associates) as the Company shall reasonably request, then
the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an
<PAGE>
Adverse Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will
deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Section 3.1(a) Event and prior
to the time that an Acquiring Person or Adverse Person
becomes the Beneficial Owner of more than 50% of the out-
standing shares of Common Stock, elect to exchange all
(but not less than all) of the then-outstanding Rights
(which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for Common
Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted in order to protect the
interests of holders of Rights generally in the event
that after the Separation Date an event of a type analo-
gous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Common Stock
(such exchange ratio, as adjusted from time to time,
being hereinafter referred to as the "Exchange Ratio").
The Board of Directors of the Company may not make an
election pursuant to this Section 3.1(c) if the number of
shares of Common Stock which is authorized by the Com-
pany's restated articles of incorporation but not out-
<PAGE>
standing or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit
the exchange of all Rights in accordance with this Section 3.1(c).
Immediately upon the action of the Board of
Directors of the Company electing to exchange the Rights,
without any further action and without any notice, the
right to exercise the Rights will terminate, and each
Right (other than Rights that have become void pursuant
to Section 3.1(b)) will thereafter represent only the
right to receive a number of shares of Common Stock equal
to the Exchange Ratio. Promptly after the action of the
Board of Directors electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps
to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the
Rights (other than Rights that have become void pursuant
to Section 3.1(b)) outstanding immediately prior thereto
by mailing such notice in accordance with Section 5.8.
Each Person in whose name any certificate for
shares is issued upon the exchange of Rights pursuant to
this Section 3.1(c) shall for all purposes be deemed to
have become the holder of record of the shares represent-
ed thereby on, and such certificate shall be dated the
<PAGE>
date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of any applicable
taxes and other governmental charges payable by the
holder was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books
of the Company are open.
(d) In the event that the number of shares of Common Stock
which is authorized by the Company's restated articles of
incorporation but not outstanding or reserved for issu-
ance for purposes other than upon exercise of the Rights
is not sufficient to permit the exercise in full of the
Rights in accordance with Section 3.1(a) (and the Company
has not elected to exchange securities for Rights pursuant to
Section 3.1(c)), the Company shall (A) determine
the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") and, (B) with
respect to each Right (subject to Section 3.1(b) hereof),
make adequate provision to substitute for the Adjustment
Shares, upon the exercise of such Right and payment of
the applicable Exercise Price, (1) cash, (2) a reduction
<PAGE>
in the Exercise Price, (3) Common Stock or other equity
securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock, such as
the Preferred Stock, which the Board of Directors of the
Company has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of
preferred stock being referred to as "Common Stock Equiv-
alents")), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value (less the
amount of any reduction in the Exercise Price), where
such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however,
that if the Company shall not have made adequate provi-
sion to deliver value pursuant to clause (B) above within
30 days following the later of (x) the first occurrence
of a Section 3.1(a) Event and (y) the date on which the
Company's right of redemption pursuant to Section 5.1
expires (the later of (x) and (y) being referred to
herein as the "Section 3.1(a) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender
<PAGE>
for exercise of a Right and without requiring payment of
the Exercise Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "Spread"
shall mean the excess of (i) the Current Value over (ii)
the Exercise Price. If the Board of Directors of the
Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the
Rights, the 30-day period set forth above may be extended
to the extent necessary, but not more than 90 days after
the Section 3.1(a) Trigger Date, in order that the Com-
pany may seek shareholder approval for the authorization
of such additional shares (such 30-day period, as it may
be extended, is herein called the "Substitution Period").
To the extent that the Company determines that some
action needs to be taken pursuant to the first and/or
third sentences of this Section 3.1(d), the Company (1)
shall provide, subject to Section 3.1(b) hereof, that
such action shall apply uniformly to all outstanding
Rights and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in
order to seek such shareholder approval for such authori-
<PAGE>
zation of additional shares and/or to decide the appro-
priate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 3.1(d),
the value of each Adjustment Share shall be the Market
Price per share of the Common Stock on the Section 3.1(a)
Trigger Date, and the per-share or per-unit value of any
Common Stock Equivalent shall be deemed to equal the Mar-
ket Price per share of the Common Stock on such date.
(e) The Company covenants and agrees that, after the
Separation Date, it will not, except as permitted by Section
5.1 or Section 5.4, take (or permit any Subsidiary to
take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
3.2 Flip-over. (a) Prior to the close of business on the
Expiration Date, the Company will not enter into any
agreement with respect to, consummate, permit to occur or
suffer to exist any Flip-over Transaction or Event unless
<PAGE>
the Company shall have taken such action as shall be
necessary to ensure and provide, and shall have entered
into a supplemental agreement with the Flip-over Entity,
for the benefit of the holders of the Rights, providing,
that upon consummation or occurrence of the Flip-over
Transaction or Event, (i) each holder of a Right, except
as provided in Section 3.1(b) hereof, shall thereafter
have the right to receive, upon the exercise thereof at
the then-current Exercise Price in accordance with the
terms of this Agreement, such number of validly autho-
rized and issued, fully paid, nonassessable and freely
tradable shares of Flip-over Stock, not subject to any
liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained
by dividing (1) the then-current Exercise Price by (2)
50% of the Market Price per share of the Flip-over Stock
on the date of consummation of such Flip-over Transaction
or Event (such right to be appropriately adjusted in
order to protect the interests of the holders of Rights
generally in the event that after such date of consumma-
tion or occurrence an event of a type analogous to any of
the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock), (ii) the
Flip-over Entity shall thereafter be liable for, and
<PAGE>
shall assume, by virtue of such Flip-over Transaction or
Event and such supplemental agreement, all the obliga-
tions and duties of the Company pursuant to this Agree-
ment; and (iii) the provisions of Section 3.1(a) shall be
of no effect following the first occurrence of any Flip-over
Transaction or Event. The provisions of this Sec-
tion 3.2 shall apply to successive Flip-over Transactions
or Events.
(b) Prior to the close of business on the Expiration Date,
unless the Rights will be redeemed pursuant to Section
5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or
permit to occur any Flip-over Transaction or Event if at
the time thereof there are any rights, warrants or secu-
rities outstanding or any other arrangements, agreements
or instruments which would eliminate or otherwise dimin-
ish in any material respect the benefits intended to be
afforded by this Rights Agreement to the holders of
Rights (other than an Acquiring Person or Adverse Person
or an Affiliate or Associate thereof) upon consummation
of such transaction.
(c) Notwithstanding anything in this Agreement to the con-
trary, Section 3.2 shall not be applicable to a trans-
action described in subparagraphs (i) and (ii) of the
<PAGE>
definition of Flip-over Transaction or Event if (i) such
transaction is consummated with a Person or Persons (or a
wholly owned subsidiary of any such Person or Persons)
who acquired shares of Common Stock pursuant to a tender
offer or exchange offer for all outstanding shares of
Common Stock which complies with the provisions of Sec-
tion 3.1(a)(i) relating to offers for all outstanding
shares, (ii) the price per share of Common Stock offered
in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender
offer or exchange offer and (iii) the form of consider-
ation being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as
the form of consideration paid pursuant to such tender
offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 3.2(c), all
Rights hereunder shall expire.
Article IV - The Rights Agent
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company agrees to
<PAGE>
pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this
Agreement, including the costs and expenses of defending
against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered
or omitted by it in connection with its administration of
this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the
Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed,
<PAGE>
executed and, where necessary, verified or acknowledged,
by the proper person or persons.
4.2 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 shareholder services 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 4.4 hereof. In case at the time such successor
Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor
<PAGE>
Rights Agent may countersign such Rights 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 Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so counter-
signed; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in
its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
<PAGE>
(a) The Rights Agent may consult with legal counsel (which
may be 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
deemed to be conclusively proved and established by a
certificate signed by a person believed by the Rights
Agent to be the Chairman of the Board, the President or
any Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary 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.
<PAGE>
(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 certificates for securities
purchasable upon exercise of Rights or the Rights Cer-
tificates (except its countersignature thereof) or be re-
quired 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 authorization,
execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or
Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Company
of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor will it be responsible
for any change in the exercisability of the Rights; nor
will it be responsible for any adjustment required under
the provisions of Section 2.4, 3.1 or 3.2 hereof or
<PAGE>
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 after receipt of the
certificate contemplated by Section 2.4 describing 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 securities purchas-
able upon exercise of any Rights or as to whether any
securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, ac-
knowledge 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 person believed by the
Rights Agent to be the Chairman of the Board, the Presi-
<PAGE>
dent or any Vice President or the Secretary or any Assis-
tant Secretary or the Treasurer or any Assistant Treasur-
er of the Company, and to apply to such persons for
advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered
by it in good faith in accordance with instructions of
any such person.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in
Common Stock, Rights, or other securities of the Company
or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent 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
<PAGE>
misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and
be discharged from its duties under this Agreement upon
90 days' notice (or such lesser notice as is acceptable
to the Company) in writing mailed to the Company and to
each transfer agent of Common Stock by registered or
certified mail, and to the holders of the Rights by
first-class mail (at the expense of the Company). The
Company may remove the Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent and to each transfer
agent of the Common Stock by registered or certified
mail, and to the holders of the Rights by first-class
mail. If the Rights Agent should resign or be removed or
otherwise become 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 days
after 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 any
Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company),
<PAGE>
then the holder of any Rights may apply to any
court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws
of the United States or any State, in good standing,
having an office in the State of New York or the State of
Minnesota, which is authorized under such laws to exercise
the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. 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 shall deliver
and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of
any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock, and mail a
notice thereof in writing to the holders of the Rights.
<PAGE>
Failure to give any notice provided for in this Section
4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Article V - Miscellaneous
5.1 Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of
(i) the close of business on the 10th day following the
Stock Acquisition Date and (ii) the Expiration Date,
redeem all but not less than all the then-outstanding
Rights at the Redemption Price; provided, however, if the
Board of Directors of the Company authorizes redemption
of the Rights in either of the circumstances set forth in
clauses (i) and (ii) below, then there must be Continuing
Directors then in office and such authorization shall
require the concurrence of a majority of such Continuing
Directors: (i) such authorization occurs on or after the
time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement
of such solicitation if any Person who is a participant
<PAGE>
in such solicitation has stated (or, if upon the com-
mencement of such solicitation, a majority of the Board
of Directors of the Company has determined in good faith)
that such Person (or any of its Affiliates or Associates)
intends to take, or may consider taking, any action which
would result in such Person becoming an Acquiring Person
or which would cause the occurrence of a Triggering Event
unless, concurrent with such solicitation, such Person
(or one or more of its Affiliates or Associates) is
making a cash tender offer pursuant to a Schedule 14D-1
(or any successor form) filed with the Securities and
Exchange Commission for all outstanding shares of Common
Stock not beneficially owned by such Person (or by its
Affiliates or Associates). The Board of Directors may
not redeem any Rights following a determination pursuant
to Section 3.1(a)(ii) that any Person is an Adverse Per-
son. Notwithstanding anything contained in this Agree-
ment to the contrary, the Rights shall not be exercisable
after the first occurrence of a Triggering Event until
such time as the Company's right of redemption set forth
in the first sentence of this Section 5.1(a) has expired.
The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on the Market
<PAGE>
Price of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evi-
dence of which shall have been filed with the Rights
Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate,
and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the
Rights Agent and the holders of the then-outstanding
Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation
Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemp-
tion will state the method by which the payment of the
Redemption Price will be made.
<PAGE>
5.2 Expiration. The Rights and this Agreement shall expire
on the close of business on the Expiration Date, and no
Person shall have any rights pursuant to this Agreement
or any Right after the close of business on the Expira-
tion Date, except, if the Rights are exchanged or re-
deemed, as provided in Section 3.1(c) or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue
new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the number or kind or class of
shares of stock purchasable upon exercise of Rights made
in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of
shares of Common Stock following the Separation Date and
prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock op-
tions or under any employee plan or arrangement, granted
or awarded as of the Separation Date, or upon the redemption,
exercise, conversion or exchange of the Company's
<PAGE>
Series B Convertible Preferred Stock or any other securi-
ties hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certifi-
cates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company
or the Person to whom such Rights Certificate would be
issued and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance
thereof.
5.4 Supplements and Amendments. Prior to the Separation
Date and subject to the penultimate sentence of this
Section 5.4, the Company may and the Rights Agent shall,
if the Company so directs, supplement or amend any provi-
sion of this Agreement without the approval of any hold-
ers of certificates representing shares of Common Stock.
From and after the Separation Date and subject to the
penultimate sentence of this Section 5.4, the Company may
and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval
<PAGE>
of any holders of Rights Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence
of an event set forth in clauses (i) and (ii) of the
first proviso to Section 5.1(a), shall be effective only
if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors)
or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the inter-
ests of the holders of Rights Certificates (other than an
Acquiring Person or Adverse Person or an Affiliate or
Associate of an Acquiring Person or Adverse Person);
provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than any Acquiring Person or
<PAGE>
Adverse Person and their Affiliates and Associates).
Notwithstanding anything in this Agreement to the con-
trary, no provision which provides for action by Continu-
ing Directors (including this sentence) may be amended
without the concurrence of a majority of Continuing
Directors after the first occurrence of an event set
forth in clauses (i) and (ii) of the first proviso of
Section 5.1(a). Upon the delivery of a certificate from
an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance
with the terms of this Section 5.4, the Rights Agent
shall execute such supplement or amendment. Notwith-
standing anything contained in this Agreement to the
contrary (except Section 2.4(b)), no supplement or amend-
ment shall be made which changes the Redemption Price,
the Expiration Date or the Exercise Price. Prior to the
Separation Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the
holders of Common Stock.
5.5 Rights of Action. Subject to the terms of this
Agreeement (including Section 3.1(b)), rights of action in re-
spect of this Agreement, other than rights of action
vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any
<PAGE>
Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit
of other holders of Rights, enforce, and may institute
and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and
in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is spe-
cifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of
any Person subject to this Agreement.
5.6 Holder of Rights Not Deemed a Shareholder. No holder,
as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of
shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall any-
thing contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights, as
such, any of the rights of a shareholder of the Company
<PAGE>
or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 5.7
hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised
or exchanged in accordance with the provisions hereof.
5.7 Notice of Proposed Actions. In case the Company shall
propose after the Separation Date and prior to the Expi-
ration Date (i) to effect or permit occurrence of any
Flip-over Transaction or Event, or (ii) to effect the
liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 5.8 hereof,
a notice of such proposed action, which shall specify the
date on which such Flip-over Transaction or Event, liqui-
dation, dissolution, or winding up is to take place, and
such notice shall be so given at least 20 Business Days
prior to the date of the taking of such proposed action.
5.8 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or
<PAGE>
by the holder of any Rights to or on the Company shall be
sufficiently given or made when delivered or when sent by
first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights
Agent) as follows:
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: Corporate Secretary
Notices or demands authorized or required by this Agree-
ment to be given or made by the Company or by the holder
of any Rights to or on the Rights Agent shall be suffi-
ciently given or made when delivered or when sent by
first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as
follows:
First Chicago Trust Company of New York
30 West Broadway
11th Floor
New York, New York 10007
Attention: Tenders and Exchanges
Administration
Notices or demands authorized or required by this Agree-
ment to be given or made by the Company or the Rights
Agent to or on the holder of any Rights shall be suffi-
ciently given or made when delivered or when sent by
first-class mail, postage prepaid, addressed to such
holder at the address of such holder as it appears upon
<PAGE>
the registry books of the Rights Agent or, prior to the
Separation Date, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given,
whether or not the holder receives the notice.
5.9 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are
purchasable upon exercise of Rights fails to fulfill any
of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees)
incurred by such holder in actions to enforce such
holder's rights pursuant to any Rights or this Agreement.
5.10 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
5.11 Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the
Company, the Rights Agent and the holders of the Rights
any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and
<PAGE>
exclusive benefit of the Company, the Rights Agent and
the holders of the Rights.
5.12 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
5.13 Governing Law. This Agreement and each Right issued
hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota and for all purposes shall
be governed by and construed in accordance with the laws
of such state applicable to contracts to be made and
performed entirely within such state, except for Article
IV hereof, which shall be governed by the laws of the
State of New York.
5.14 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one
and the same instrument.
5.15 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such
term or provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or
<PAGE>
unenforceability without invalidating or rendering unen-
forceable the remaining terms and provisions hereof or
the application of such term or provision to circumstanc-
es other than those as to which it is held invalid or
unenforceable.
5.16 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action need be
taken pursuant to this Agreement to comply with federal
or state securities laws, the Company may suspend the ex-
ercisability of the Rights for a period of up to 90 days
following the date of the occurrence of the Separation
Date in order to take such action or comply with such
laws. In the event of any such suspension, the Company
shall issue as promptly as practicable a public announcement
stating that the exercisability of the Rights has
been temporarily suspended. Notice thereof pursuant to
Section 5.8 shall not be required.
5.17 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise
or redemption of Rights, the Company shall, in lieu
thereof, in the sole discretion of the Board, either (a)
evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that
<PAGE>
such agreement shall provide that each holder of a depos-
itary receipt shall have all of the rights, privileges
and preferences to which he would be entitled as a bene-
ficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the same fraction of the
Market Price of one share of the stock issuable upon such
exercise on the date of exercise.
5.18 Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determin-
ing the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regula-
tions under the Securities Exchange Act of 1934. The
Board of Directors of the Company (with, where specifi-
cally provided for herein, the concurrence of the Contin-
uing Directors) shall have the exclusive power and au-
thority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board
(with, where specifically provided for herein, the con-
currence of the Continuing Directors) or to the Company,
<PAGE>
or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed neces-
sary or advisable for the administration of this Agree-
ment (including a determination to redeem or not redeem
the Rights or to amend this Agreement). All such ac-
tions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omis-
sions with respect to the foregoing) which are done or
made by the Board (with, where specifically provided for
herein, the concurrence of the Continuing Directors) in
good faith shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights
and all other parties and (y) not subject the Board or
the Continuing Directors to any liability to the holders
of the Rights.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date
first above written.
Attest: THE ST. PAUL COMPANIES, INC.
/s/ Bruce A. Backberg By /s/ Patrick A. Thiele
-------------------------- --------------------------
Name: Patrick A. Thiele
Title: Executive Vice President
and Chief Financial
Officer
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By /s/ Joanne Gorostiola
-------------------------- ---------------------------
Name: Joanne Gorostiola
Title: Assistant Vice President
<PAGE>
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of December 4, 1989
as amended as of March 9, 1990
and as amended and restated as of
August 1, 1995
between
THE ST. PAUL COMPANIES, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
<PAGE>
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. . . . . . . . 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights. . . . . . . . . 15
Section 2.2 Legend on Common Stock
Certificates . . . . . . . . . . 15
Section 2.3 Separation and Exercise. . . . . . 16
Section 2.4 Exercise Price, Number of Rights . 21
Section 2.5 Date on Which Exercise Is
Effective. . . . . . . . . . . . 24
Section 2.6 Execution, Authentication,
Delivery and Dating of Rights
Certificates . . . . . . . . . . 25
Section 2.7 Registration, Registration of
Transfer and Exchange. . . . . . 26
Section 2.8 Mutilated, Destroyed, Lost and
Stolen Rights Certificates . . . 28
Section 2.9 Persons Deemed Owners. . . . . . . 31
Section 2.10 Delivery and Cancellation of
Certificates . . . . . . . . . . 31
Section 2.11 Agreement of Rights Holders. . . . 31
Article III
CERTAIN TRANSACTIONS
Section 3.1 Flip-in. . . . . . . . . . . . . . 33
Section 3.2 Flip-over. . . . . . . . . . . . . 42
Article IV
THE RIGHTS AGENT
Section 4.1 General. . . . . . . . . . . . . . 45
Section 4.2 Merger or Consolidation or
Change of Name of Rights Agent . 47
Section 4.3 Duties of Rights Agent . . . . . . 48
Section 4.4 Change of Rights Agent . . . . . . 53
<PAGE>
Article V
MISCELLANEOUS Page
Section 5.1 Redemption . . . . . . . . . . . . 55
Section 5.2 Expiration . . . . . . . . . . . . 58
Section 5.3 Issuance of New Rights
Certificates . . . . . . . . . . 58
Section 5.4 Supplements and Amendments . . . . 59
Section 5.5 Rights of Action . . . . . . . . . 61
Section 5.6 Holder of Rights Not Deemed
a Shareholder. . . . . . . . . . 62
Section 5.7 Notice of Proposed Actions . . . . 63
Section 5.8 Notices. . . . . . . . . . . . . . 63
Section 5.9 Costs of Enforcement . . . . . . . 65
Section 5.10 Successors . . . . . . . . . . . . 65
Section 5.11 Benefits of This Agreement . . . . 65
Section 5.12 Descriptive Headings . . . . . . . 66
Section 5.13 Governing Law. . . . . . . . . . . 66
Section 5.14 Counterparts . . . . . . . . . . . 66
Section 5.15 Severability . . . . . . . . . . . 66
Section 5.16 Suspension of Exercisability . . . 67
Section 5.17 Fractional Shares. . . . . . . . . 67
Section 5.18 Determinations and Actions by the
Board of Directors, etc. . . . . 68
EXHIBITS
Exhibit A Letter to Shareholders and
Summary of Terms (Not Amended)
Exhibit B Form of Rights Certificate
Exhibit C Form of Statement with Respect
to Preferred Stock (Not Amended)
<PAGE>
EXHIBIT A
(Not Amended)
TO OUR SHAREHOLDERS:
On Dec. 4, your Board of Directors adopted a Shareholder Protection Rights
Plan. This letter briefly describes the Rights Plan and your Board's reasons
for adopting it. I have also enclosed additional, summary information.
The Rights Plan was adopted to enable your Board to protect your rights against
unsolicited and unfair or coercive attempts to acquire control of your
company. These might take the form of a partial or two-tier tender offer,
an offer for your shares at less than a full and fair price, a "market sweep"
or other takeover tactics which your Board believes are not in your best
interests.
This plan was not designed or adopted to deal with any specific known efforts
to gain control of your company. The plan will not interfere with any merger
or other business combination approved by your Board as being in the best
interest of shareholders and other stakeholders. The plan also does not weaken
your company's financial strength, interfere with our business plans or dilute
your investment. Also, the issuance of rights is not taxable to the company
or to you.
No rights certificates will be issued since they presently trade with your
common stock, and you need not take any action at this time with respect to
this rights distribution.
Over 1,000 other corporations have adopted shareholder rights plans. Your
Board of Directors believes you are entitled to similar protection.
A complete copy of the Rights Agreement may be obtained without charge by
writing to your company at 385 Washington St., St. Paul, MN 55102, Attention:
Corporate Secretary.
Sincerely,
Robert J. Haugh
Chairman
<PAGE> Exhibit A, cont'd
THE ST. PAUL COMPANIES, INC.
SUMMARY OF SHAREHOLDER PROTECTION RIGHTS PLAN
Distribution and
Transfer of Rights;
Right Certificates: The Board has declared a dividend of one
Right for each share of Common Stock
outstanding. Prior to the Separation
Date referred to below, the Rights would
be evidenced by and trade with the Com-
mon Stock and will not be exercisable.
After the Separation Date the Company
will mail Rights Certificates to share-
holders and the Rights would become
transferable apart from the Common
Stock.
Separation Date: Rights would separate from the Common
Stock and become exercisable following
the earlier of (i) the tenth day (or
such earlier or later date, not beyond
the thirtieth day, as the Board may de-
cide) after any person becomes the bene-
ficial owner (a broadly defined term) of
15% or more of the Common Stock (and
thereby becomes an "Acquiring Person"),
or (ii) the tenth day (or such later
date as the Board may decide) after any
person commences a tender or exchange
offer that would result in such person
becoming the beneficial owner of 15% or
more of the Common Stock.
Exercise of Rights: After the Separation Date, each Right
would entitle the holder to purchase,
for the Exercise Price, one
one-thousandth (1/1000) of a share of
Preferred Stock designed so that each
one one-thousandth of a share has eco-
nomic and voting terms similar to those
of one share of Common Stock (e.g., each
full share of Preferred Stock would have
1000 votes).
<PAGE>
"Flip-over" Trigger: After any person becomes an Acquiring
Person, the Company may not (i) consoli-
date or merge with the Acquiring Person,
(ii) sell 50% or more of its assets or
earning power to one or more persons in
one or a series of transactions within a
period of two years or (iii) engage in
certain specified self-dealing transac-
tions with the Acquiring Person, unless
proper provision is made so that each
Right would thereafter become a right to
buy, at the Exercise Price, that number
of shares of capital stock with the
greatest voting power of the Acquiring
Person having a market value of twice
the Exercise Price.
Redemption: The Rights may be redeemed by the Board
at any time until ten days (or such ear-
lier or later date, not beyond the 30th
day, as may be fixed by the Board) after
any person becomes the beneficial owner
of 15% or more of the Common Stock, at a
Redemption Price of $0.01 per Right;
provided, however, that if following the
expiration of this redemption period but
prior to the occurrence of any Flip-over
trigger such Acquiring Person's stake in
the Company is reduced below 10%, the
right of redemption is revived.
Power to Amend: The Board may amend the Plan in any re-
spect without the consent of the holders
of Rights until the Separation Date.
Thereafter, the Board may amend the Plan
in any respect not materially adverse to
Rights holders generally, except that
the Board may not reduce the Redemption
Price, accelerate the Final Expiration
Date or reduce the number of shares of
Preferred Stock issuable upon exercise
of a Right.
Expiration: The Rights will expire ten years from
the date of their issuance unless pre-
viously redeemed.
<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. W- Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY
EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR ADVERSE PERSONS OR
AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES
OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
THE ST. PAUL COMPANIES, INC.
This certifies that , or regis-
tered assigns, is the registered holder of the number of
Rights set forth above, each of which entitles the regis-
tered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement,
dated as of December 4, 1989 (as such may be amended from
time to time, the "Rights Agreement"), between The St. Paul
Companies, Inc., a Minnesota corporation (the "Company"),
and First Chicago Trust Company of New York, a New York
corporation, as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after
the Separation Date (as such term is defined in the Rights
Agreement) and prior to the close of business on Decem-
ber 19, 1999 (or, if the Separation Date occurs subsequent
<PAGE>
to December 19, 1996 but prior to December 19, 1999, the
third anniversary of the Separation Date), at the principal
office of the Rights Agent, one two-thousandth (1/2000) of a
fully paid share (adjusted from 1/1000 of a share for the
effect the Company's two-for-one stock split on May 17,
1994) of Preferred Stock, without par value (the "Preferred
Stock"), of the Company (subject to adjustment as provided
in the Rights Agreement), at the Exercise Price referred to
below, upon presentation and surrender of this Rights Cer-
tificate with the Form of Election to Exercise duly executed
at the principal office of the Rights Agent in New York.
The Exercise Price shall initially be $92.50 per Right (as
adjusted from the original Exercise Price of $185.00 to
reflect the Company's two-for-one stock split on May 17,
1994) and shall be subject to further adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights
Agreement, the Rights evidenced hereby may entitle the reg-
istered holder thereof to purchase securities of an entity
other than the Company or securities or assets of the Compa-
ny other than Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorpo-
rated herein by reference and made a part hereof and to
<PAGE>
which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obliga-
tions, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal
office of the Company and are available without cost upon
written request.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the office of the
Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of
like tenor evidencing an aggregate number of Rights equal to
the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the regis-
tered holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
each Right evidenced by this Certificate may be (a) redeemed
by the Company under certain circumstances at its option at
a redemption price of $.005 per Right (as adjusted from the
original redemption price of $.01 to reflect the Company's
two-for-one stock split on May 17, 1994) or (b) exchanged by
the Company under certain circumstances, at its option, for
one share of Common Stock per Right (or, in certain cases,
<PAGE>
other securities or assets of the Company), subject to
further adjustment in certain events as provided in the
Rights Agreement.
No holder of this Rights Certificate, as such,
shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of any securities which may at
any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be con-
strued to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or with-
hold consent to any corporate action, or to receive notice
of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive divi-
dends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exer-
cised or exchanged as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been counter-
signed by the Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
, 19 .
[SEAL]
ATTEST: THE ST. PAUL COMPANIES, INC.
By
-------------------------- --------------------------
Corporate Secretary Chairman and Chief
Executive Officer
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
---------------------------
Authorized Officer
Date:
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby
sells, assigns and transfers unto
(Please print name
and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 19
Signature Guaranteed: ------------------------
Signature
(Signature must correspond
to name as written upon the
face of this Rights Certifi-
cate in every particular,
without alteration or en-
largement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of
the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office
or correspondent in the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the
Rights evidenced by this Rights Certificate are not, and, to
the knowledge of the undersigned, have never been, Benefi-
<PAGE>
cially Owned by an Acquiring Person or an Adverse Person or
an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
Signature
NOTICE
In the event the certification set forth above is
not completed in connection with a purported assignment, the
Company will deem the Beneficial Owner of the Rights evi-
denced by the enclosed Rights Certificate to be an Acquiring
Person or an Adverse Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be
void and not transferable or exercisable.
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
The undersigned hereby irrevocably elects to
exercise whole Rights represented
by the attached Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights
and requests that certificates for such shares be issued in
the name of:
Address:
Social Security or Other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evi-
denced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the
name of and delivered to:
Address
Social Security or Other Taxpayer
Identification Number:
Dated: , 19
Signature Guaranteed: ---------------------------
Signature
(Signature must correspond
to name as written upon the
face of this Rights Certifi-
cate in every particular,
without alteration or en-
largement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of
the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office
or correspondent in the United States.
<PAGE>
(To be completed if true)
The undersigned hereby represents, for the benefit
of all holders of Rights and shares of Common Stock, that
the Rights evidenced by the attached Rights Certificate are
not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Ad-
verse Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).
Signature
NOTICE
In the event the certification set forth above is
not completed in connection with a purported exercise, the
Company will deem the Beneficial Owner of the Rights evi-
denced by the attached Rights Certificate to be an Acquiring
Person or an Adverse Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be
void and not transferable or exercisable.<PAGE>
<PAGE>
Exhibit C
(Not Amended)
STATEMENT OF THE ST. PAUL COMPANIES, INC.
WITH RESPECT TO
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Pursuant To Section 302A.401, Subd. 3(b)
of Minnesota Statutes
The undersigned officers of The St. Paul Compa-
nies, Inc. (the "Corporation"), being duly authorized by the
Board of Directors of the Corporation, do hereby certify
that the following resolution was duly adopted by the Board
of Directors of the Corporation on December 4, 1989 pursuant
to Minnesota Statutes, Section 302A.401, Subd. 3(a):
RESOLVED, that there is hereby established, out of
the five million undesignated shares of the Corporation,
none of which has previously been authorized for issuance by
the Board of Directors, a series of Preferred Stock of the
Corporation designated as stated below and having the rela-
tive rights and preferences that are set forth below (the
"Series"):
Section 1. Designation and Amount. The Series
shall be designated as "Series A Junior Participating Pre-
ferred Stock" (the "Series A Preferred Stock"). The number
of shares constituting the Series shall initially be fifty
thousand, which number may from time to time be increased or
<PAGE>
decreased (but not below the number then outstanding) by the
Board of Directors.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
series of undesignated shares hereinafter created ranking
prior and superior to the Series A Preferred Stock, the
holders of Series A Preferred Stock shall be entitled to re-
ceive, when, as and if declared by the Board of Directors,
dividends payable in cash or in kind (other than dividends
payable in shares of Common Stock, or a subdivision of the
outstanding shares of Common Stock, by reclassification or
otherwise) on the same day as each dividend is paid on the
Corporation's voting common stock (respectively, a "Dividend
Payment Date" and the "Common Stock"), commencing on the
first Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent), subject
to adjustment as provided herein from time to time, equal to
1000 times the aggregate per share amount of all dividends
payable in cash and 1000 times the aggregate per share
amount of all dividends payable in kind (other than divi-
dends payable in shares of Common Stock, or a subdivision of
the outstanding shares of Common Stock, by reclassification
or otherwise) or other distributions declared on the Common
Stock since the immediately preceding Dividend Payment Date,
or, with respect to the first Dividend Payment Date, since
<PAGE>
the first issuance of a share or fraction of a share of Se-
ries A Preferred Stock. In the event the Corporation shall
at any time (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the
amount to which holders of Series A Preferred Stock are
thereafter entitled under the preceding sentence shall be
adjusted by multiplying the amount immediately prior to such
event by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) above simultaneously with the declaration of
any dividend or distribution on the Common Stock (other than
a dividend payable in shares of Common Stock); provided
that, in the event regular dividends on the Common Stock are
suspended, dividends on the Series A Preferred Stock shall
likewise be suspended until dividends on the Common Stock
are resumed.
(C) The Board of Directors may fix a record date
for the determination of holders of Series A Preferred Stock
entitled to receive payment of a dividend or distribution
<PAGE>
declared thereon, which record date shall be the same day as
the record date fixed for the payment of the simultaneous
dividend or distribution on the Common Stock that, pursuant
to paragraph (A) above, requires the payment of the dividend
or distribution on the Series A Preferred Stock.
Section 3. Voting Rights. The holders of Series
A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment here-
inafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 1000 votes on all mat-
ters submitted to a vote of the shareholders of the Corpora-
tion. In the event the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes
per share to which holders of Series A Preferred Stock are
thereafter entitled shall be adjusted by multiplying the
number of votes per share immediately prior to such event 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) Except as otherwise provided by law, the
holders of Series A Preferred Stock and the holders of
<PAGE>
Common Stock shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
Section 4. Reacquired Shares. Any shares or
fractional shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatso-
ever shall be retired and cancelled promptly after the ac-
quisition thereof. All such shares shall upon their cancel-
lation become authorized but unissued undesignated shares
and may be reissued as part of a new series of shares to be
created by the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 5. Liquidation, Dissolution or Winding
Up. On any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the hold-
ers of Common Stock or other stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock unless, prior thereto, the
holders of Series A Preferred Stock shall have received,
subject to the restrictions set forth in Article III of the
Corporation's Restated Articles of Incorporation, an aggre-
gate amount per share equal to 1000 times the aggregate
amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dis-
tributions made ratably on the Series A Preferred Stock and
<PAGE>
all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) com-
bine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders
of Series A Preferred Stock are entitled under the proviso
in clause (1) of the preceding sentence shall be adjusted by
multiplying the amount in effect immediately after such
event 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.
Section 6. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination, exchange or other transaction in which the
shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property,
then in any such case the outstanding Series A Preferred
Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other
<PAGE>
property (payable in kind), as the case may be, into which
or for which, and in the same proportion as, each share of
Common Stock is changed or exchanged. In the event the Cor-
poration shall at any time (i) declare any dividend on Com-
mon Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstand-
ing Common Stock into a smaller number of shares, then in
each such case the amount to which the holders of Series A
Preferred Stock are thereafter entitled as set forth in the
preceding sentence, shall be adjusted by multiplying the
amount in effect immediately prior to such event by a frac-
tion 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.
Section 7. No Redemption. The Series A Preferred
Stock shall not be redeemable.
Section 8. Ranking. The Series A Preferred Stock
shall rank junior to all other series of the Corporation's
undesignated shares hereinafter created as to the payment of
dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 9. Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's frac-
tional shares, to exercise voting rights, receive dividends,
<PAGE>
participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have signed this Statement
this day of , 19 .
President
Corporate Secretary
