SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
________________
A. Schulman, Inc.
(Exact name of registrant as specified in its charter)
Delaware 34-0514850
(State of incorporation (I.R.S. employer
or organization) identification no.)
3550 West Market Street
Akron, Ohio
(Address of principal executive offices)
44333
(zip code)
________________
Securities to be registered pursuant to Section 12(b) of the Act:
None.
Securities to be registered pursuant to Section 12(g) of the Act:
Special Stock Purchase Rights
(title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On January 11, 1996, the Board of Directors of A.
Schulman, Inc. (the "Company") adopted a Stockholder Rights
Plan, providing that one Right shall be attached to each
share of common stock, par value $1.00 per share, of the
Company (the "Common Stock"), as set forth below. The
Rights will be issued on January 25, 1996 to stockholders of
record on such date and will entitle the registered holder
to purchase from the Company a unit (a "Unit") consisting of
one one-thousandth of a share of Series A Junior Participat-
ing Special Stock, no par value (the "Special Stock"), at a
purchase price of $85.00 per Unit (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of January 12, 1996, between the
Company and Society National Bank, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all
Common Stock certificates representing shares of Common
Stock then outstanding, and no separate Rights certificate
will be distributed. The Rights will separate from the
Common Stock upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has ac-
quired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Com-
mon Stock (the "Stock Acquisition Date") or (ii) 10 busi-
ness days following the commencement of a tender offer or
exchange offer that would result in a person or group of
affiliated or associated persons beneficially owning 15%
or more of such outstanding shares of Common Stock (the
earlier of (i) and (ii), the "Distribution Date"). Until
the Distribution Date, (i) the Rights will be evidenced by
the Common Stock certificates and will only be transferra-
ble with such Common Stock certificates, (ii) new Common
Stock certificates will contain a legend incorporating the
Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights will not be exercisable prior to the
Distribution Date and will expire at the close of business
on January 25, 2006 unless earlier redeemed by the Company
as described below. At no time will the Rights have any
voting power.
As soon as practicable after the Distribution
Date, separate Rights certificates will be mailed to
holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the
separate Rights certificates alone will represent the
Rights. Except as otherwise may be determined by the
Board of Directors, Rights will only attach to shares of
Common Stock issued and outstanding prior to the Distribu-
tion Date.
In the event that an Acquiring Person becomes
the beneficial owner of 15% or more of the then outstand-
ing shares of Common Stock, each holder of a Right will
thereafter have the right to receive, upon exercise, Com-
mon 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. The Exercise
Price is the Purchase Price times the number of shares of
Common Stock associated with each Right (initially, one).
Notwithstanding any of the foregoing, following the occur-
rence of any of the events set forth in this paragraph
(the "Flip-in Events"), all Rights that are, or (under
certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be
null and void. However, Rights are not exercisable fol-
lowing the occurrence of any of the Flip-in 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 following the Stock Acquisi-
tion Date, (i) the Company engages in a merger or business
combination transaction in which the Company is not the
surviving corporation, (ii) the Company engages in a
merger or business combination transaction in which the
Company is the surviving corporation and the Common Stock
of the Company is changed or exchanged, or (iii) 50% or
more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
have previously been voided as set forth above) shall
thereafter have the right to receive, upon exercise of the
Right, common stock of the acquiring company having a
value equal to two times the Exercise Price of the Right.
The Purchase Price payable, and the number of
Units of Special Stock or other securities or property
issuable upon exercise of the Rights are subject to ad-
justment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combina-
tion or reclassification of, the Special Stock, (ii) if
holders of the Special Stock are granted certain rights or
warrants to subscribe for Special Stock or convertible
securities at less than the current market price of the
Special Stock, or (iii) upon the distribution to holders
of the Special Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustments in the
Purchase Price will be required until cumulative adjust-
ments amount to at least 1% of the Purchase Price. No
fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price
of the Special Stock on the last trading date prior to the
date of exercise.
At any time until 10 days following the Stock
Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right.
Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will termi-
nate and the only right of a holder of a Right will be to
receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof,
in such capacity, will have no rights as a stockholder of
the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstanc-
es, recognize taxable income in the event that the Rights
become exercisable for Common Stock of the Company (or
other consideration) as set forth above.
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 Distribution
Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to
cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the
interest of any Acquiring Person), or to shorten or
lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time
period governing redemption shall be made at such time as
the Rights are not redeemable.
The Rights have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company in certain
circumstances. Accordingly, the existence of the Rights
may deter certain acquirors from making takeover proposals
or tender offers. However, the Rights are not intended to
prevent a takeover, but rather are designed to enhance the
ability of the Board of Directors to negotiate with a
potential acquiror on behalf of all of the stockholders.
The Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights, which
includes as Exhibit B the Form of Rights Certificate, is
attached hereto as Exhibit 1 and is incorporated herein by
reference. The foregoing description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS
Certain of the provisions of the Restated Cer-
tificate of Incorporation and By-Laws of the Company, each
as amended to date, may have the effect of delaying or
deferring a change in control of the Company. These
provisions operate with respect to extraordinary corporate
transactions such as a merger, reorganization, tender
offer, sale or transfer of substantially all of the
Company's assets, and liquidation, and certain of the
provisions operate with respect to other transactions, as
well. These provisions include (i) a classified board,
(ii) restrictions on the rights of stockholders to remove
directors, (iii) prohibitions against stockholders calling
a special meeting of stockholders or acting by unanimous
written consent in lieu of a meeting, (iv) a "fair price"
provision for business combinations, (v) requirements for
advance notice of stockholder nominations to the Board of
Directors and business to be conducted at annual meetings
and (vi) restrictions on the ability to amend certain
provisions of the Restated Certificate of Incorporation
and By-Laws.
CLASSIFIED BOARD The Restated Certificate of Incorpo-
ration calls for three classes of directors, each class
serving three-year terms and being of as equal size as
possible. Only one class of directors is to be elected
each year.
REMOVAL OF DIRECTORS/VACANCIES The Restated Certificate
of Incorporation provides that a director may be removed
from office only for cause, and only upon the vote of the
holders of at least 80% of the voting power of the out-
standing shares of Common Stock of the Company entitled to
vote generally in the election of directors. Vacancies in
the Board of Directors and newly created directorships may
be filled only by a majority of directors then in office
or by a sole remaining director.
"FAIR PRICE" PROVISION The Restated Certificate of Incor-
poration requires certain Business Combinations (as de-
fined therein) with Related Persons (as defined below) or
affiliates thereof be approved by the affirmative vote of
the holders of at least 80% of the voting power of the
then outstanding capital stock of the Company entitled to
vote generally in the election of directors (the "Voting
Stock"), voting together as a single class. Such approv-
al is not required if either (i) the Business Combination
has been approved by a majority of the Continuing Direc-
tors (as defined below) or (ii) certain price requirements
designed to ensure that the Company's stockholders receive
a "fair price" for their Common Stock are satisfied. A
"Related Person" is any person who or which, together with
its affiliates and associates, is the beneficial owner of
20% or more of the outstanding Voting Stock and any affil-
iate or associate of such person. A "Continuing Direc-
tor" means any member of the Board of Directors who was a
member of the Board of Directors prior to the time that
the Related Person became a Related Person, and any suc-
cessor of a Continuing Director who is recommended to
succeed a Continuing Director by a majority of Continuing
Directors then on the Board of Directors.
LIMITATIONS ON STOCKHOLDER MEETINGS The Restated Certifi-
cate of Incorporation also provides that any action re-
quired or permitted to be taken by the stockholders of the
Company may be effected only at an annual or special
meeting of stockholders, and prohibits stockholders'
action by written consent in lieu of a meeting. The
Restated Certificate of Incorporation and the Company's
By-Laws provide that special meetings of stockholders may
be called only by the president of the Company or at the
direction of the Board of Directors pursuant to a resolu-
tion adopted by a majority of the directors then in of-
fice.
ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS AND
DIRECTOR NOMINATIONS The By-Laws establish an advance
notice procedure for the nomination, other than by or at
the direction of the Board of Directors, of candidates for
election as directors as well as for other stockholder
proposals to be considered at annual meetings of stock-
holders. In general, notice of intent to nominate a
director or raise business at such meetings must be re-
ceived by the Company not less than 60 nor more than 90
days prior to the anniversary of the previous year's
annual meeting, and must contain certain specified infor-
mation concerning the person to be nominated or the mat-
ters to be brought before the meeting and concerning the
stockholder submitting the proposal.
AMENDMENTS The Company's Restated Certificate of Incor-
poration and By-Laws require the approval of the holders
of at least 80% of the Common Stock to amend certain
provisions thereof, unless approved by a vote of two-
thirds of the directors, then in office. Such provisions
include those discussed above, other than those relating
to advance notice for stockholder business and nominations
to the Board. These requirements will prevent a stock-
holder with less than the specified number of shares of
Common Stock from avoiding the requirements of the provi-
sions discussed above by simply repealing such provisions.
The foregoing description does not purport to be
complete and is qualified in its entirety by reference to
the Company's Restated Certificate of Incorporation and
By-Laws, each as amended to date, incorporated herein by
reference as Exhibits 2 and 3, respectively.
ITEM 2. EXHIBITS.
1 Rights Agreement, dated as of January 12,
1996, between the Company and the Rights Agent, which in-
cludes as Exhibit B thereto the Form of Rights Certifi-
cate.
2(a) Restated Certificate of Incorporation
dated April 6, 1984 (incorporated by reference to Exhibit
3(a) of the Company's Form 10-K for fiscal year ended
August 31, 1990).
2(b) Certificate of Amendment of Certificate of
Incorporation dated December 12, 1985.
2(c) Certificate of Amendment of Certificate of
Incorporation dated January 9, 1987 (incorporated by
reference to Exhibit 3(b) of the Company's Form 10-K for
fiscal year ended August 31, 1994).
2(d) Certificate of Amendment of Certificate of
Incorporation dated December 10, 1987 (incorporated by
reference to Exhibit 3(c) of the Company's Form 10-K for
fiscal year ended August 31, 1991).
2(e) Certificate of Amendment of Certificate of
Incorporation dated December 6, 1990 (incorporated by
reference to Exhibit 3(d) of the Company's Form 10-K for
fiscal year ended August 31, 1991).
2(f) Certificate of Amendment of Certificate of
Incorporation dated December 9, 1993.
3(a) By-Laws dated December 8, 1983 (incorpo-
rated by reference to Exhibit 3(c) of the Company's Form
10-K for fiscal year ended August 31, 1990).
3(b) Amendment to the By-Laws dated October 20,
1986 (incorporated by reference to Exhibit 3(f) of the
Company's Form 10-K for fiscal year ended August 31, 1991).
3(c) Amendment to the By-Laws dated January 11,
1996 (incorporated by reference to Exhibit 3.3 of the
Company's Current Report on Form 8-K dated January 15,
1996).
SIGNATURE
Pursuant to the requirements of Section 12 of
the Securities Exchange Act of 1934, the registrant has
duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
A. SCHULMAN, INC.
By: /s/ ROBERT A. STEFANKO
Name: Robert A. Stefanko
Title: Chairman of the Board and
Chief Financial Officer
Date: January 15, 1996
EXHIBIT INDEX
Exhibit Description Page
1 Rights Agreement, dated as of Jan-
uary 12, 1996, between the Company
and the Rights Agent, which in-
cludes as Exhibit B thereto the
Form of Rights Certificate.
2(a) Restated Certificate of Incorpora-
tion dated April 6, 1984 (incorpo-
rated by reference to Exhibit 3(a)
of the Company's Form 10-K for
fiscal year ended August 31,
1990).
2(b) Certificate of Amendment of Cer-
tificate of Incorporation dated
December 12, 1985.
2(c) Certificate of Amendment of Cer-
tificate of Incorporation dated
January 9, 1987 (incorporated by
reference to Exhibit 3(b) of the
Company's Form 10-K for fiscal
year ended August 31, 1994).
2(d) Certificate of Amendment of Cer-
tificate of Incorporation dated
December 10, 1987 (incorporated by
reference to Exhibit 3(c) of the
Company's Form 10-K for fiscal
year ended August 31, 1991).
2(e) Certificate of Amendment of Cer-
tificate of Incorporation dated
December 6, 1990 (incorporated by
reference to Exhibit 3(d) of the
Company's Form 10-K for fiscal
year ended August 31, 1991).
2(f) Certificate of Amendment of Cer-
tificate of Incorporation dated
December 9, 1993.
3(a) By-Laws dated December 8, 1983
(incorporated by reference to Ex-
hibit 3(c) of the Company's Form
10-K for fiscal year ended August
31, 1990).
3(b) Amendment to the By-Laws dated
October 20, 1986 (incorporated by
reference to Exhibit 3(f) of the
Company's Form 10-K for fiscal
year ended August 31, 1991).
3(c) Amendment to the By-Laws dated
January 11, 1996 (incorporated by
reference to Exhibit 3.3 of the
Company's Current Report on Form
8-K dated January 15, 1996).
EXHIBIT 1
A. SCHULMAN, INC.
and
SOCIETY NATIONAL BANK
Rights Agent
Rights Agreement
Dated as of January 12, 1996
____________________________________________________________
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . .
2. Appointment of Rights Agent . . . . . . .
3. Issue of Rights Certificates . . . . . . . .
4. Form of Rights Certificates . . . . . . .
5. Countersignature and Registration . . . .
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . .
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . .
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . .
9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . .
10. Special Stock Record Date . . . . . . . .
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . .
12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . .
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power . . . . . . . .
14. Fractional Rights and Fractional Shares .
15. Rights of Action . . . . . . . . . . . . .
16. Agreement of Rights Holders . . . . . . .
17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . .
18. Concerning the Rights Agent . . . . . . .
19. Merger or Consolidation or Change of Name
of Rights Agent . . . . . . . . . . . . .
20. Duties of Rights Agent . . . . . . . . . .
21. Change of Rights Agent . . . . . . . . . .
22. Issuance of New Rights Certificates . . .
23. Redemption and Termination . . . . . . . .
24. Notice of Certain Events . . . . . . . . .
25. Notices . . . . . . . . . . . . . . . . .
26. Supplements and Amendments . . . . . . . .
27. Successors . . . . . . . . . . . . . . . .
28. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . .
29. Benefits of this Agreement . . . . . . . .
30. Severability . . . . . . . . . . . . . . .
31. Governing Law . . . . . . . . . . . . . .
32. Counterparts . . . . . . . . . . . . . . .
33. Descriptive Headings . . . . . . . . . . .
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 12, 1996
(the "Agreement"), between A. Schulman, Inc., a Delaware
corporation (the "Company"), and Society National Bank, a
national banking association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on January 11, 1996 (the "Rights
Dividend Declaration Date"), the Board of Directors of
the Company (the "Board of Directors" or the "Board")
authorized and declared a dividend distribution of one
Right for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the close of
business on January 25, 1996 (the "Record Date"), and has
authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of
the Company issued between the Record Date (whether
originally issued or delivered from the Company's
treasury) and the Distribution Date each Right initially
representing the right to purchase one one-thousandth of
a share of Series A Junior Participating Special Stock of
the Company having the rights, powers and preferences set
forth in the form of Certificate of Designation,
Preferences and Rights attached hereto as Exhibit A, upon
the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the
parties hereby agree as follows:
Section 1. Certain Definitions. For purposes
of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any
Person 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 (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any Subsidiary of the Company,
(iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms
of any such plan or (v) any such Person who has reported
or is required to report such ownership (but less than
20%) on Schedule 13G under the Securities Exchange Act of
1934, as amended and in effect on the date of this
Agreement (the "Exchange Act") (or any comparable or
successor report) or, if such Person is of a type listed
in Rule 13d-1(b)(1)(ii) under the Exchange Act, on
Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence
the management or policies of the Company or engage in
any of the actions specified in Item 4 of such Schedule
(other than the disposition of the Common Stock) and,
within 10 Business Days of being requested by the Company
to advise it regarding the same, certifies to the Company
that such Person acquired shares of Common Stock in
excess of 14.9% inadvertently or without knowledge of the
terms of the Rights and who, together with all Affiliates
and Associates, thereafter does not acquire additional
shares of Common Stock while the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding;
provided, however, that if the Person requested to so
certify fails to do so within 10 Business Days, then such
Person shall become an Acquiring Person immediately after
such 10 Business Day Period.
(b) "Affiliate" and "Associate" shall
have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
(c) A Person shall be deemed the
"Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) which such Person or any of
such Person's Affiliates or Associates,
directly or indirectly, has the right to
acquire (whether such right is exercisable
immediately or only after the passage of time)
pursuant to any agreement, arrangement or
understanding (whether or not in writing) or
upon the exercise of conversion rights,
exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's
Affiliates or Associates until such tendered
securities are accepted for purchase or
exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights
from and after the occurrence of a Triggering
Event which Rights were acquired by such Person
or any of such Person's Affiliates or
Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of
such Person's Affiliates or Associates,
directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the
Exchange Act), including pursuant to any
agreement, arrangement or understanding,
whether or not in writing; provided, however,
that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii)
as a result of an agreement, arrangement or
understanding to vote such security if such
agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable provisions of
the General Rules and Regulations under the
Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement
or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii)
of this paragraph (c)) or disposing of any
voting securities of the Company; provided,
however, that nothing in this paragraph (c)
shall cause a person engaged in business as an
underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any
securities acquired through such person's
participation in good faith in a firm
commitment underwriting until the expiration of
40 days after the date of such acquisition.
(d) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date
shall mean 5:00 P.M., New York City time, on such date;
provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the
next succeeding Business Day.
(f) "Common Stock" shall mean the common
stock, par value $1.00 per share, of the Company, except
that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or
the equity securities or other equity interest having
power to control or direct the management, of such
Person.
(g) "Person" shall mean any individual,
firm, corporation, partnership or other entity.
(h) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii) hereof.
(i) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(j) "Special Stock" shall mean shares of
Series A Junior Participating Special Stock, no par
value, of the Company, and, to the extent that there are
not a sufficient number of shares of Series A Junior
Participating Special Stock authorized to permit the full
exercise of the Rights, any other series of special
stock, no par value, of the Company designated for such
purpose containing terms substantially similar to the
terms of the Series A Junior Participating Special Stock.
(k) "Stock Acquisition Date" shall mean
the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(l) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(m) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition
Date occurs before the Record Date, the close of business
on the Record Date), or (ii) the close of business on the
tenth business day (or such later date as the Board shall
determine) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding (the earlier of
(i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer
to the Company). As soon as practicable after receiving
written notice from the Company of the occurrence of the
Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of
business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more
right certificates, in substantially the form of Exhibit
B hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following
the Record Date, the Company will send a copy of a
Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for
the Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in
respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between A.
Schulman, Inc. (the "Company") and Society
National Bank (the "Rights Agent") dated as of
January 12, 1996 (the "Rights Agreement"), the
terms of which are hereby incorporated herein
by reference and a copy of which is on file at
the principal offices of A. Schulman, Inc.
Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be
evidenced by separate certificates and will no
longer be evidenced by this certificate. A.
Schulman, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without
charge promptly after receipt of a written
request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was
or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently
held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such
certificates shall be evidenced by such certificates
alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and
the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the
forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation
and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof
to purchase such number of one one-thousandths of a share
of Special Stock as shall be set forth therein at the
price set forth therein (such exercise price per one
one-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued
pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of
the Company has, in its full discretion, determined is
part of a plan, arrangement or understanding which has as
a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the
extent reasonably practicable) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President or any
Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature and shall not
be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by
any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates. (a) Subject to the
provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number
of one one-thousandths of a share of Special Stock (or,
following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment
of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor and
date to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e)
hereof, the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number
of one one-thousandths of a share of Special Stock (or
other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the close
of business on January 25, 2006, (the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one
one-thousandth of a share of Special Stock pursuant to
the exercise of a Right shall initially be $85.00 and
shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-thousandth
of a share of Special Stock (or other shares, securities,
cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Special Stock (or
make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one
one-thousandths of a share of Special Stock to be
purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the
total number of shares of Special Stock issuable upon
exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a
share of Special Stock as are to be purchased (in which
case certificates for the shares of Special Stock
represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such
name or names and denominations as may be designated by
such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the order
of the Company. In the event that the Company is
obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other
securities, cash and/or other property are available for
distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised
so that only whole shares of Special Stock would be
issued.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has,
in its full discretion, determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and
no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use
all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed
and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any Rights
Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of
Capital Stock. (a) The Company covenants and agrees
that it will cause to be reserved and kept available out
of its authorized and unissued shares of Special Stock
(and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares
of Special Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Special
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed
on any national securities exchange or on the National
Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), as the case may be, the
Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such
exchange or on NASDAQ, as the case may be, upon official
notice of issuance upon such exercise.
(c) The Company shall use its best
efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Securities Act
of 1933 (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for
such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as
may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time
as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration
statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement
has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not
have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to
ensure that all one one-thousandths of a share of Special
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) delivered
upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and
agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number
of one one-thousandths of a share of Special Stock (or
Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or
delivery of a number of one one-thousandths of a share of
Special Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one
one-thousandths of a share of Special Stock (or Common
Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that
no such tax is due.
Section 10. Special Stock Record Date. Each
person in whose name any certificate for a number of one
one-thousandths of a share of Special Stock (or Common
Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such
fractional shares of Special Stock (or Common Stock
and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment
is a date upon which the Special Stock (or Common Stock
and/or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the
Special Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company
shall at any time after the date of this
Agreement (A) declare a dividend on the Special
Stock payable in shares of Special Stock, (B)
subdivide the outstanding Special Stock, (C)
combine the outstanding Special Stock into a
smaller number of shares, or (D) issue any
shares of its capital stock in a
reclassification of the Special Stock
(including any such reclassification in
connection with a consolidation or merger in
which the Company is the continuing or
surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the
time of the record date for such dividend or of
the effective date of such subdivision,
combination or reclassification, and the number
and kind of shares of Special Stock or capital
stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that
the holder of any Right exercised after such
time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the
aggregate number and kind of shares of Special
Stock or capital stock, as the case may be,
which, if such Right had been exercised
immediately prior to such date and at a time
when the Special Stock transfer books of the
Company were open, he or she would have owned
upon such exercise and been entitled to receive
by virtue of such dividend, subdivision,
combination or reclassification. If an event
occurs which would require an adjustment under
both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that any Person
(other than the Company, any Subsidiary of the
Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or
established by the Company for or pursuant to
the terms of any such plan), alone or together
with its Affiliates and Associates, shall, at
any time after the Rights Dividend Declaration
Date, become the Beneficial Owner of 15% or
more of the shares of Common Stock then
outstanding, unless the event causing the 15%
threshold to be crossed is a transaction set
forth in Section 13(a) hereof, then, promptly
following the occurrence of any such event,
proper provision shall be made so that each
holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have
the right to receive, upon exercise thereof at
the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of
Special Stock, such number of shares of Common
Stock of the Company as shall equal the result
obtained by (x) multiplying the then current
Purchase Price by the then number of one
one-thousandths of a share of Special Stock for
which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which,
following such first occurrence, shall
thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of
this Agreement) by 50% of the current market
price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date
of such first occurrence (such number of
shares, the "Adjustment Shares").
(iii) In the event that the number
of shares of Common Stock which are authorized
by the Company's Restated Certificate of
Incorporation, as amended, but not outstanding
or reserved for issuance for purposes other
than upon exercise of the Rights are not
sufficient to permit the exercise in full of
the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the
Company 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 7(e)
hereof), make adequate provision to substitute
for the Adjustment Shares, upon the exercise of
a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other
equity securities of the Company (including,
without limitation, shares, or units of shares,
of special stock, such as the Special Stock,
which the Board has deemed to have essentially
the same value or economic rights as shares of
Common Stock (such shares of special stock
being referred to as "Common Stock
Equivalents")), (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
Purchase Price), where such aggregate value has
been determined by the Board based upon the
advice of a nationally recognized investment
banking firm selected by the Board; provided,
however, that if the Company shall not have
made adequate provision to deliver value
pursuant to clause (B) above within thirty (30)
days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of
redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a
Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate
value equal to the Spread. For purposes of the
preceding sentence, the term "Spread" shall
mean the excess of (i) the Current Value over
(ii) the Purchase Price. If the Board
determines in good faith that it is likely that
sufficient additional shares of Common Stock
could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day
period set forth above may be extended to the
extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder
approval for the authorization of such
additional shares (such thirty (30) day period,
as it may be extended, is herein called the
"Substitution Period"). To the extent that
action is to be taken pursuant to the first
and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) 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
stockholder approval for such authorization of
additional shares and/or to decide the
appropriate form of distribution to be made
pursuant to such first sentence and to
determine the value thereof. In the event of
any such suspension, the Company shall issue a
public announcement stating that the
exercisability of the Rights has been
temporarily suspended, as well as a public
announcement at such time as the suspension is
no longer in effect. For purposes of this
Section 11(a)(iii), the value of each
Adjustment Share shall be the Current Market
Price per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the per
share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on
such date.
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Special Stock entitling them
to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record
date) Special Stock (or shares having the same rights,
privileges and preferences as the shares of Special Stock
("equivalent special stock")) or securities convertible
into Special Stock or equivalent special stock at a price
per share of Special Stock or per share of equivalent
special stock (or having a conversion price per share, if
a security convertible into Special Stock or equivalent
special stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of
Special Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of
which shall be the number of shares of Special Stock
outstanding on such record date, plus the number of
shares of Special Stock which the aggregate offering
price of the total number of shares of Special Stock
and/or equivalent special stock so to be offered (and/or
the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such
current market price, and the denominator of which shall
be the number of shares of Special Stock outstanding on
such record date, plus the number of additional shares of
Special Stock and/or equivalent special stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be
paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Special Stock owned by
or held for the account of the Company shall not be
deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of Special
Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is
the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets
(other than a dividend payable in Special Stock, but
including any dividend payable in stock other than
Special Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d)
hereof) per share of Special Stock on such record date,
less the fair market value (as determined in good faith
by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a
share of Special Stock and the denominator of which shall
be such current market price (as determined pursuant to
Section 11(d) hereof) per share of Special Stock. Such
adjustments shall be made successively whenever such a
record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.
(d) (i) For the purpose of any
computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per share of
Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that
in the event that the Current Market Price per share of
the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, then,
and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock are listed
or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or
such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board. If
on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board shall be
used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares
of Common Stock are not listed or admitted to trading on
any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the
fair value per share as determined in good faith by the
Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Special
Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section
11(d) (other than the last sentence thereof). If the
Current Market Price per share of Special Stock cannot be
determined in the manner provided above or if the Special
Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Special Stock shall be
conclusively deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price
per share of the Common Stock. If neither the Common
Stock nor the Special Stock is publicly held or so listed
or traded, Current Market Price per share of the Special
Stock shall mean the fair value per share as determined
in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes
of this Agreement, the Current Market Price of a Unit
shall be equal to the Current Market Price of one share
of Special Stock divided by 1,000.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or
other share or one-ten millionth of a share of Special
Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a) hereof,
the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other
than Special Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect
to the Special Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Special Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one
one-thousandths of a share of Special Stock purchasable
from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall, without any further action on the part
of the Board, thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one
one-thousandths of a share of Special Stock (calculated
to the nearest one-ten millionth) obtained by (i)
multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Special Stock
purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one
one-thousandths of a share of Special Stock for which a
Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in
substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or
change in the Purchase Price or the number of one one-
thousandth of a share of Special Stock issuable upon the
exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express
the Purchase Price per one one-thousandth of a share and
the number of one one-thousandth of a share which were
expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then stated value, if any, of the number of one
one-thousandths of a share of Special Stock issuable upon
exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
such number of one one-thousandth of a share of Special
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11
shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right
exercised after such record date the number of one
one-thousandths of a share of Special Stock and other
capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of
one one-thousandths of a share of Special Stock and other
capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares
(fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith
judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i)
consolidation or subdivision of the Special Stock, (ii)
issuance wholly for cash of any shares of Special Stock
at less than the current market price, (iii) issuance
wholly for cash of shares of Special Stock or securities
which by their terms are convertible into or exchangeable
for shares of Special Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders
of its Special Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that
it shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger
or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates
and Associates.
(o) The Company covenants and agrees
that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date,
shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common
Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the
total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is
made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the
Special Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property, or (z) the Company shall sell 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 in one or more transactions
each of which complies with Section 11(o) hereof), then,
and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number
of one one-thousandths of a share of Special Stock for
which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number
of such one one-thousandths of a share for which a Right
was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and
dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes
of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per
share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as practicably may be, in relation
to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any
transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person
that is the issuer of any securities into which
shares of Common Stock of the Company are
converted in such merger or consolidation, and
if no securities are so issued, the Person that
is the other party to such merger or
consolidation; and
(ii) in the case of any
transaction described in clause (z) of the
first sentence of Section 13(a), the Person
that is the party receiving the greatest
portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the
Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will
(i) prepare and file a
registration statement under the Act, with
respect to the Rights and the securities
purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts
to cause such registration statement to (A)
become effective as soon as practicable after
such filing and (B) remain effective (with a
prospectus at all times meeting the
requirements of the Act) until the Expiration
Date; and
(ii) will deliver to holders of
the Rights historical financial statements for
the Principal Party and each of its Affiliates
which comply in all respects with the
requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
Section 14. Fractional Rights and Fractional
Shares.
(a) The Company shall not be required to
issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of
a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the
closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker
is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to
issue fractions of shares of Special Stock (other than
fractions which are integral multiples of one
one-thousandth of a share of Special Stock) upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Special Stock (other than
fractions which are integral multiples of one
one-thousandth of a share of Special Stock). In lieu of
fractional shares of Special Stock that are not integral
multiples of one one-thousandth of a share of Special
Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same
fraction of the current market value of one
one-thousandth of a share of Special Stock. For purposes
of this Section 14(b), the current market value of one
one-thousandth of a share of Special Stock shall be one
one-thousandth of the closing price of a share of Special
Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a
Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market
value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share
of Common Stock shall be the closing price of one share
of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives his or her
right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder
of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his or her own behalf and for his
or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his
or her right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations
of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of
one one-thousandths of a share of Special Stock or any
other securities of the Company which may at any time be
issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected
and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged,
by the proper Person or Persons.
Section 19. Merger or Consolidation or Change
of Name of Rights Agent.
(a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any
further act on the part of any of the parties hereto;
provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person and the determination of "current market
price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or
in any Rights Certificate; nor shall it be responsible
for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or Special Stock to be issued
pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock or Special Stock
will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized
and directed to accept written instructions with respect
to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company, and to apply to
such officers for advice or instructions in connection
with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds
or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the
exercise of its rights if (i) there shall be reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability
is not reasonably assured to it or (ii) the Rights Agent
shall have requested from the Company the necessary funds
to pay in full amounts payable with respect thereto.
(k) If, with respect to any Right
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise of transfer without
first consulting with the Company, except that no
consultation shall be necessary with respect to any such
irregularity that is of a routine nature and that is
cured by the party surrendering to the Rights Agent the
Rights Certificate as a consequence of receipt from the
Rights Agent of instructions as to how to cure such
irregularity.
Section 21. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon
thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock
and Special Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of
the Common Stock and Special Stock, by registered or
certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has
been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection
by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation
organized and doing business under the laws of the United
States or of the State of New York or Ohio (or of any
other state of the United States so long as such
corporation is authorized to do business as a banking
institution in the State of New York or Ohio), in good
standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or
examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock
and the Special Stock, and mail a notice thereof in
writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights 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 Purchase Price and the number or kind or class of
shares or other securities or property purchasable under
the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of
Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would
create a significant risk of material adverse tax
consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(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 tenth day following the
Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the close
of business on the tenth day following the Record Date),
or (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred
to as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market
Price, as defined in Section 11(d)(i) hereof, 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, evidence 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 Distribution
Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of
redemption will state the method by which the payment of
the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of
Special Stock or to make any other distribution to the
holders of Special Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Special
Stock rights or warrants to subscribe for or to purchase
any additional shares of Special Stock or shares of stock
of any class or any other securities, rights or options,
or (iii) to effect any reclassification of its Special
Stock (other than a reclassification involving only the
subdivision of outstanding shares of Special Stock), or
(iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of
related transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants,
or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of
Special Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20)
days prior to the record date for determining holders of
the shares of Special Stock for purposes of such action,
and in the case of any such other action, at least twenty
(20) days prior to the date of the taking of such
proposed action or the date of participation therein by
the holders of the shares of Special Stock whichever
shall be the earlier.
(b) In case any of the events set forth
in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in the preceding paragraph to Special
Stock shall be deemed thereafter to refer to Common Stock
and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the
Rights Agent) as follows:
A. Schulman, Inc.
3550 West Market Street
Akron, Ohio 44333
Attention: Robert A. Stefanko
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate
to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with
the Company) as follows:
Society National Bank
127 Public Square, 15th Floor
Cleveland, Ohio 44114
Attention: Carolyn Byrne
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the
Company.
Section 26. Supplements and Amendments. Prior
to the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the
approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein
which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring 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.
Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one one-thousandths of a share of
Special Stock for which a Right is exercisable. Prior to
the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of
the holders of Common Stock.
Section 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
Section 28. Determinations and Actions by the
Board of Directors, etc. For all purposes of this
Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time,
including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the
administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a
determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board 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 to
any liability to the holders of the Rights.
Section 29. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable
and the Board of Directors of the Company determines in
its good faith judgment that severing the invalid
language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of
business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement,
each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of
such State applicable to contracts made and to be
performed entirely within such State, except that the
rights, duties and obligations of the Rights Agent shall
be governed and construed in accordance with the laws of
the State of Ohio.
Section 32. Counterparts. This Agreement may
be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or
affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: A. SCHULMAN, INC.
By B.R. Colbow By R.A. Stefanko
Name: B.R. Colbow Name: R.A. Stefanko
Title: Treasurer Title: Executive Vice
President
Attest: SOCIETY NATIONAL BANK
By B. William Bedy By Caroline Lukez-Byrne
Name: B. William Bedy Name: Caroline Lukez-Byrne
Title: Vice President Title: Assistant Vice
President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING SPECIAL STOCK
of
A. SCHULMAN, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officers of A. Schulman, Inc.,
a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance
with the provisions of Section 103 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon
the Board of Directors by the Restated Certificate of
Incorporation of the said Corporation, the said Board of
Directors on January 11, 1996 adopted the following
resolution creating a series of 100,000 shares of Special
Stock designated as Series A Junior Participating Special
Stock:
RESOLVED, that pursuant to the authority vested
in the Board of Directors of this Corporation in
accordance with the provisions of its Restated
Certificate of Incorporation, a series of Special Stock
of the Corporation be and it hereby is created, and that
the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and
other special rights of the shares of such series, and
the qualifications, limitations or restrictions thereof
are as follows:
Section 1. Designation and Amount. The shares
of such series shall be designated as "Series A Junior
Participating Special Stock" and the number of shares
constituting such series shall be 100,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Junior
Participating Special Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June,
September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating
Special Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $0.01 or (b)
subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all
cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value
$1.00 per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior
Participating Special Stock. In the event the
Corporation shall at any time after January 11, 1996 (the
"Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of Series A Junior Participating
Special Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend
or distribution on the Series A Junior Participating
Special Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $0.01 per share on
the Series A Junior Participating Special Stock shall
nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior
Participating Special Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such
shares of Series A Junior Participating Special Stock,
unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the
determination of holders of shares of Series A Junior
Participating Special Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Special Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of
holders of shares of Series A Junior Participating
Special Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of
shares of Series A Junior Participating Special Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Special Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to
which holders of shares of Series A Junior Participating
Special Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by
law, the holders of shares of Series A Junior
Participating Special Stock and the holders of shares of
Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the
Corporation.
(C) (i) If at any time dividends on any
Series A Junior Participating Special Stock shall be in
arrears in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark
the beginning of a period (herein called a "default
period") which shall extend until such time when all
accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend
period on all shares of Series A Junior Participating
Special Stock then outstanding shall have been declared
and paid or set apart for payment. During each default
period, all holders of Special Stock (including holders
of the Series A Junior Participating Special Stock) with
dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two
(2) Directors.
(ii) During any default period, such
voting right of the holders of Series A Junior
Participating Special Stock may be exercised
initially at a special meeting called pursuant
to subparagraph (iii) of this Section 3(C) or
at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders,
provided that such voting right shall not be
exercised unless the holders of ten percent
(10%) in number of shares of Special Stock
outstanding shall be present in person or by
proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise
by the holders of Special Stock of such voting
right. At any meeting at which the holders of
Special Stock shall exercise such voting right
initially during an existing default period,
they shall have the right, voting as a class,
to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then
exist up to two (2) Directors or, if such right
is exercised at an annual meeting, to elect two
(2) Directors. If the number which may be so
elected at any special meeting does not amount
to the required number, the holders of the
Special Stock shall have the right to make such
increase in the number of Directors as shall be
necessary to permit the election by them of the
required number. After the holders of the
Special Stock shall have exercised their right
to elect Directors in any default period and
during the continuance of such period, the
number of Directors shall not be increased or
decreased except by vote of the holders of
Special Stock as herein provided or pursuant to
the rights of any equity securities ranking
senior to or pari passu with the Series A
Junior Participating Special Stock.
(iii) Unless the holders of Special
Stock shall, during an existing default period,
have previously exercised their right to elect
Directors, the Board of Directors may order, or
any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of
the total number of shares of Special Stock
outstanding, irrespective of series, may
request, the calling of special meeting of the
holders of Special Stock, which meeting shall
thereupon be called by the President, a
Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any
annual meeting at which holders of Special
Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each
holder of record of Special Stock by mailing a
copy of such notice to him or her at his or her
last address as the same appears on the books
of the Corporation. Such meeting shall be
called for a time not earlier than 20 days and
not later than 60 days after such order or
request or in default of the calling of such
meeting within 60 days after such order or
request, such meeting may be called on similar
notice by any stockholder or stockholders
owning in the aggregate not less than ten
percent (10%) of the total number of shares of
Special Stock outstanding. Notwithstanding the
provisions of this Paragraph (C)(iii), no such
special meeting shall be called during the
period within 60 days immediately preceding the
date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the
holders of Common Stock, and other classes of
stock of the Corporation if applicable, shall
continue to be entitled to elect the whole
number of Directors until the holders of
Special Stock shall have exercised their right
to elect two (2) Directors voting as a class,
after the exercise of which right (x) the
Directors so elected by the holders of Special
Stock shall continue in office until their
successors shall have been elected by such
holders or until the expiration of the default
period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of
a majority of the remaining Directors
theretofore elected by the holders of the class
of stock which elected the Director whose
office shall have become vacant. References in
this Paragraph (C) to Directors elected by the
holders of a particular class of stock shall
include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration
of a default period, (x) the right of the
holders of Special Stock as a class to elect
Directors shall cease, (y) the term of any
Directors elected by the holders of Special
Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may
be provided for in the certificate of
incorporation or by-laws irrespective of any
increase made pursuant to the provisions of
Paragraph (C)(ii) of this Section 3 (such
number being subject, however, to change
thereafter in any manner provided by law or in
the certificate of incorporation or by-laws).
Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and
(z) in the preceding sentence may be filled by
a majority of the remaining Directors.
(D) Except as set forth herein, holders of
Series A Junior Participating Special Stock shall have no
special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Junior
Participating Special Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on
shares of Series A Junior Participating Special Stock
outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends
on, make any other distributions on, or redeem
or purchase or otherwise acquire for
consideration any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to the
Series A Junior Participating Special Stock;
(ii) declare or pay dividends
on or make any other distributions on any
shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution
or winding up) with the Series A Junior
Participating Special Stock, except dividends
paid ratably on the Series A Junior
Participating Special Stock and all such parity
stock on which dividends are payable or in
arrears in proportion to the total amounts to
which the holders of all such shares are then
entitled;
(iii) redeem or purchase or
otherwise acquire for consideration shares of
any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the Series A Junior
Participating Special Stock, provided that the
Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity
stock in exchange for shares of any stock of
the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or
winding up) to the Series A Junior
Participating Special Stock; or
(iv) purchase or otherwise
acquire for consideration any shares of Series
A Junior Participating Special Stock, or any
shares of stock ranking on a parity with the
Series A Junior Participating Special Stock,
except in accordance with a purchase offer made
in writing or by publication (as determined by
the Board of Directors) to all holders of such
shares upon such terms as the Board of
Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or
classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Paragraph
(A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series A Junior Participating Special Stock purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares
of Special Stock and may be reissued as part of a new
series of Special Stock to be created by resolution or
resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding
Up. (A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A
Junior Participating Special Stock unless, prior thereto,
the holders of shares of Series A Junior Participating
Special Stock shall have received an amount equal to
1,000 times the Exercise Price, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to
the holders of shares of Series A Junior Participating
Special Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such
events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior
Participating Special Stock and Common Stock,
respectively, holders of Series A Junior Participating
Special Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Special Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of
the Series A Liquidation Preference and the liquidation
preferences of all other series of special stock, if any,
which rank on a parity with the Series A Junior
Participating Special Stock, then such remaining assets
shall be distributed ratably to the holders of such
parity shares in proportion to their respective
liquidation preferences. In the event, however, that
there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In
case the Corporation shall enter into any consolidation,
merger, combination 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 shares of Series A
Junior Participating Special 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 1,000 times the aggregate amount of
stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of
shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Special
Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of
Series A Junior Participating Special Stock shall not be
redeemable.
Section 9. Amendment. The Restated
Certificate of Incorporation of the Corporation shall not
be further amended in any manner which would materially
alter or change the powers, preferences or special rights
of the Series A Junior Participating Special Stock so as
to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding
shares of Series A Junior Participating Special Stock,
voting separately as a class.
Section 10. Fractional Shares. Series A
Junior Participating Special Stock may be issued in
fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise
voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights
of holders of Series A Junior Participating Special
Stock.
IN WITNESS WHEREOF, we have executed and
subscribed this Certificate and do affirm the foregoing
as true under the penalties of perjury this ___ day of
, 1996.
A. SCHULMAN, INC.
Name:
Title:
Attest:
Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JANUARY 25, 2006 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.](1)
(1) The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
Rights Certificate
A. SCHULMAN, INC.
This certifies that , or
registered assigns, is the registered owner of the number
of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of January
12, 1996 (the "Rights Agreement"), between A. Schulman,
Inc., a Delaware corporation (the "Company"), and Society
National Bank, a national banking association (the
"Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (New York City time) on January 25,
2006 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights
Agent, one one-thousandth of a fully paid, non-assessable
share of Series A Junior Participating Special Stock (the
"Special Stock") of the Company, at a purchase price of
$85.00 per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of January
25, 1996 based on the Special Stock as constituted at
such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement) that a number of
Rights be exercised so that only whole shares of Special
Stock will be issued.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement),
if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares of
Special Stock or other securities, which may be purchased
upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment
upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include
the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent
and are also available upon written request to the Rights
Agent.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of one one-thousandths of a share of Special Stock
as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may
be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier
of the close of business on (i) the tenth day following
the Stock Acquisition Date (as such time period may be
extended pursuant to the Rights Agreement), and (ii) the
Final Expiration Date. In addition, the Rights may be
exchanged, in whole or in part, for shares of the Common
Stock, or shares of special stock of the Company having
essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of
Directors of the Company authorizing any such exchange,
and without any further action or any notice, the Rights
(other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such
exchange.
No fractional shares of Special Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples
of one one-thousandth of a share of Special Stock, which
may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be
entitled to vote or receive dividends or be deemed for
any purpose the holder of shares of Special Stock or of
any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced
by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of ,
ATTEST: A. SCHULMAN, INC.
____________________ By_______________________
Secretary Title:
Countersigned:
SOCIETY NATIONAL BANK
By______________________
Authorized Signature
[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 transfer unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint _________________ Attorney, to
transfer the within Rights Certificate on the books of
the within-named Company, with full power of
substitution.
Dated: ___________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is
not being sold, assigned and transferred by or on behalf
of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________________, 19__ ______________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon
the face of this Rights Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: A. SCHULMAN, INC.:
The undersigned hereby irrevocably elects to
exercise __________ Rights represented by this Rights
Certificate to purchase the shares of Special Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________, 19__
______________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on
behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: ___________, 19__ ___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any
change whatsoever.
Exhibit C
DETAILED SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING SPECIAL STOCK
On January 11, 1996, the Board of Directors of
A. Schulman, Inc. (the "Company") adopted a Shareholder
Rights Plan, providing that one Right shall be attached
to each share of Common Stock of the Company. Each Right
entitles the registered holder to purchase from the
Company a unit (a "Unit") consisting of one one-
thousandth of a share of Series A Junior Participating
Special Stock, no par value (the "Special Stock"), at a
Purchase Price of $85.00 per Unit (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of January 12, 1996, between the
Company and Society National Bank, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificate will be
distributed. The Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier
of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date") or (ii) 10 business days following the commencement
of a tender offer or exchange offer that would result in a
person or group beneficially owning 15% or more of such
outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common
Stock certificates will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender
for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by
such certificate.
The Rights are not exercisable until the
Distribution Date and will expire at the close of business
on January 25, 2006 unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only
shares of Common Stock prior to the Distribution Date will
be issued with Rights.
In the event that an Acquiring Person becomes
the beneficial owner of 15% or more of the then
outstanding shares of Common Stock, 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. The
Exercise Price is the Purchase Price times the number of
shares of Common Stock associated with each Right
(initially, one). Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in
this paragraph (the "Flip-In Events"), all Rights that
are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights
are not exercisable following the occurrence of any of the
Flip-In 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 following the Stock
Acquisition Date, (i) the Company engages in a merger or
business combination transaction in which the Company is
not the surviving corporation; (ii) the Company engages in
a merger or business combination transaction in which the
Company is the surviving corporation and the Common Stock
of the Company is changed or exchanged; or (iii) 50% or
more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
have previously been voided as set forth above) shall
thereafter have the right to receive, upon exercise of the
Right, Common Stock of the acquiring company having a
value equal to two times the Exercise Price of the Right.
The Purchase Price payable, and the number of
Units of Special Stock or other securities or property
issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Special Stock,
(ii) if holders of the Special Stock are granted certain
rights or warrants to subscribe for Special Stock or
convertible securities at less than the current market
price of the Special Stock, or (iii) upon the distribution
to holders of the Special Stock of evidences of
indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustments in the
Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price.
No fractional Units will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market
price of the Special Stock on the last trading date prior
to the date of exercise.
At any time until 10 days following the Stock
Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right.
Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other
consideration) of the Company as set forth above.
Other than those provisions relating to the
principal economic terms of the Rights, any of the
provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes
which do not adversely affect the interests of holders of
Rights (excluding the interest of any Acquiring Person),
or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust
the time period governing redemption shall be made at such
time as the Rights are not redeemable.
A copy of the Rights Agreement is being filed
with the Securities and Exchange Commission as an Exhibit
to a Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the
Company. This Summary Description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated
herein by reference.
EXHIBIT 2(b)
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
A. Schulman, Inc., a corporation organized and
existing under and by virtue of the General Corporation
Law of the State of Delaware;
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors
of A. Schulman, Inc., resolutions were duly adopted
setting forth a proposed amendment of the Certificate of
Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the
stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that the Board of Directors believes it is
advisable to (i) adopt an amendment, as indicated below,
to the first paragraph of Article FOURTH of the Company's
Certificate of Incorporation to increase from 8,000,000
to 15,000,000 the authorized number of shares of Common
Stock and (ii) submit the proposed amendment to the
Stockholders for their consideration at the Annual
Meeting of Stockholders on December 12, 1985. As
amended, the first paragraph of Article FOURTH would read
as follows:
FOURTH: The total number of shares of stock which
the Corporation shall have authority to issue is
16,010,707 shares, consisting of 1,000,000 shares of
special stock without par value, 10,707 shares of
preferred stock of the par value of $100.00 per share and
15,000,000 shares of common stock of the par value of
$1.00 per share.
SECOND: That thereafter, pursuant to resolution of
its Board of Directors, the Annual Meeting of the
Stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware, at
which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in
accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall
not be reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said A. Schulman, Inc., has
caused its corporate seal to be hereunto affixed and this
certificate to be signed by William C. Zekan, its
President, and James H. Berick, Secretary, this 12th day
of December, 1985.
By /s/ William C. Zekan
William C. Zekan, President
/s/ James H. Berick
James H. Berick, Secretary
EXHIBIT 2(f)
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
A. Schulman, Inc., a corporation organized and
existing under and by virtue of the General Corporation
Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors
of A. Schulman, Inc., resolutions were duly adopted
setting forth a proposed amendment of the Restated
Certificate of Incorporation of said corporation,
declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Board of Directors believes it is
advisable to (i) adopt an amendment, as indicated below,
to the first paragraph of Article FOURTH of the Company's
Restated Certificate of Incorporation to increase from
50,000,000 to 75,000,000 the authorized number of shares
of Common Stock and (ii) submit the proposed amendment to
the Stockholders for their consideration at the Annual
Meeting of Stockholders on December 9, 1993. As amended,
the first paragraph of Article FOURTH would read as
follows:
FOURTH: The total number of shares of stock which
the Corporation shall have authority to issue is
76,010,707 shares, consisting of 1,000,000 shares of
special stock without par value, 10,707 shares of
preferred stock of the par value of $100.00 per share and
75,000,000 shares of common stock of the par value of
$1.00 per share.
SECOND: That thereafter, pursuant to resolution of
its Board of Directors, the Annual Meeting of the
Stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware, at
which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in
accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall
not be reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said A. Schulman, Inc., has
caused its corporate seal to be hereunto affixed and this
certificate to be signed by Terry L. Haines, its
President, and James H. Berick, Secretary, this 9th day
of December, 1993.
A. SCHULMAN, INC.
By: /s/ Terry L. Haines
Terry L. Haines, President
ATTEST:
By: /s/ James H. Berick
James H. Berick, Secretary
