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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ACME METALS INCORPORATED
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(Exact name of registrant as specified in its charter)
Delaware 36-2691236
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(State of incorporation of organization) (IRS Employer Identification No.)
13500 S. Perry Avenue, Riverdale, Illinois 60627-1182
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange of which
to be so registered each class is to be registered
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None Not applicable
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Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
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(Title of Class)
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DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On July 15, 1994, the Board of Directors of Acme Metals Incorporated
("Acme") declared a dividend of one preferred share purchase right ("Right")
for each share of Common Stock. The dividend will be paid on August 5, 1994 to
stockholders of record at the close of business on August 5, 1994 ("Record
Date") and will be delivered with each share of Common Stock issued after the
Record Date and prior to the earliest to occur of the Distribution Date (as
defined below), the redemption of the Rights and the expiration of the
Rights. Except as set forth below and subject to adjustment as provided in
the Rights Agreement (as defined below), each Right entitles the registered
holder to purchase from Acme Metals Incorporated ("Acme") one one-
hundredth of a share of Acme Metals' Incorporated ("Acme's") Series A
Preferred Stock, at an exercise price of $80.00 per share ("Purchase Price").
The terms of the Rights are set forth in a Rights Agreement dated as of July
15, 1994 ("Rights Agreement"), between Acme Metals Incorporated ("Acme") and
First Chicago Trust Company of New York, as Rights Agent.
The Rights will be evidenced by the certificates representing the shares of
Common Stock and not by separate certificates until the close of business on the
10th day after the earlier to occur of (i) the date on which public disclosure
is first made that a person, together with persons affiliated or associated with
it, is the beneficial owner of 15% or more of the outstanding Common Stock
(such a person being called an "Acquiring Person" and such date being called
the "Stock Acquisition Date") and (ii) commencement of or disclosure of an
intention to commence a tender or exchange offer by a person other than Acme
Metals Incorporated ("Acme") and certain related entities if, upon
consummation of the offer, such person, together with persons affiliated or
associated with it,
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could acquire beneficial ownership of 30% or more of the outstanding Common
Stock. Until the close of business on such 10th day ("Distribution Date"), the
transfer of a share of Common Stock will constitute transfer of the associated
Right. Following the Distribution Date, the Rights will be evidenced by
separate certificates.
The Rights are exercisable on and after the Distribution Date, unless
redeemed earlier, and will expire at the close of business on August 5, 2004
("Expiration Date"), unless redeemed earlier. Until a Right is exercised, the
holder has no rights as a stockholder of Acme Metals Incorporated ("Acme"),
including, without limitation, the right to vote or to receive dividends or
distributions.
The Purchase Price, the number of outstanding Rights, and the number of
shares of Series A Preferred Stock or other securities or amount of cash or
other property issuable upon exercise of the Rights are subject to adjustment
from time to time (i) to prevent dilution, (ii) upon the occurrence of a
Triggering Event (as defined below), and (iii) upon the occurrence of a Business
Combination (as defined below). Adjustment to prevent dilution will occur (A)
in the event of a stock dividend or distribution on, or a subdivision,
combination or reclassification of, the Series A Preferred Stock, (B) upon the
grant to holders of the Series A Preferred Stock at less than the current market
price of the Series A Preferred Stock of certain rights, options, warrants to
subscribe for Series A Preferred Stock, or securities convertible into Series A
Preferred Stock, or (C) upon the distribution to holders of the Series A
Preferred Stock of other securities, cash (excluding regular periodic cash
dividends at an annual rate not in excess of 125% of the annualized rate of cash
dividends paid during the preceding fiscal year), evidences of
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indebtedness, or assets. In addition, the number of outstanding Rights, the
number of one one-hundredths of a share of Series A Preferred Stock issuable
upon exercise of each Right, and the Purchase Price are subject to adjustment in
the event of a stock split of the Common Stock or subdivision, consolidation or
combination of the Common Stock occurring, in any such case, prior to the
Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Holders will have no right to receive fractional shares of
Series A Preferred Stock (other than fractions which are integral multiples of
one one-hundredths of a share of the Series A Preferred Stock) or any other
securities of Acme Metals Incorporated ("Acme") upon the exercise of Rights.
In lieu of such fractional shares, an adjustment in cash may be made based on
the market price of the Series A Preferred Stock or other securities on the
last trading date prior to the date of exercise, or Acme Metals Incorporated
("Acme") may issue scrip, warrants or depository receipts.
A Triggering Event is deemed to occur if (i) a person becomes an Acquiring
Person, (ii) Acme Metals Incorporated ("Acme") is the surviving corporation in
a merger with an Acquiring Person and the Common Stock remains outstanding and
unchanged, or (iii) an Acquiring Person engages in a "self-dealing"
transaction specified in the Rights Agreement. Upon the occurrence of a
Triggering Event, the Rights will "flip-in" and each holder of a Right will be
entitled, in lieu of a number of one one-hundredths of a share of Series A
Preferred Stock, to purchase that number of shares of Common Stock that equals
the result obtained by (x) multiplying the then current Purchase Price
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by the number of one one-hundredth shares of Series A Preferred Stock for which
a Right was then exercisable (without giving effect to the Triggering Event) and
(y) dividing that product by 50% of the average daily closing price for the
Common Stock for the 30 consecutive trading days immediately prior to the date
of the Triggering Event.
A Business Combination is deemed to occur if, following a Stock
Acquisition Date, Acme Metals Incorporated ("Acme") is acquired in a merger or
other business combination in which the Common Stock does not remain
outstanding or is changed or 50% or more of its consolidated assets or earning
power is sold, leased, exchanged, mortgaged, pledged or otherwise transferred
or disposed of (in one transaction or a series of transactions). Upon the
occurrence of a Business Combination, the Rights that theretofore had not been
exercised will "flip-over" and each holder of a Right will be entitled, in
lieu of a number of one one-hundredths of a share of Series A Preferred Stock,
to purchase that number of shares of common stock of the other party to the
Business Combination (or, in certain circumstances, one of its affiliates)
("Principal Party") that equals the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredth shares of
Series A Preferred Stock for which a Right was then exercisable (without
giving effect to the Business Combination) and (y) dividing that product by
50% of the average daily closing price for the common stock of the Principal
Party for the 30 consecutive trading days immediately prior to the
consummation of the Business Combination or transfer.
Any Rights beneficially owned at any time on or after the earlier of the
Distribution Date and the Stock Acquisition Date by an Acquiring Person or an
affiliate or associate of an
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Acquiring Person will become null and void upon the occurrence of a Triggering
Event and no holder of such Rights will have any right to exercise such Rights.
At any time prior to the earlier of (i) 20 days after the date on which
the Board of Directors of Acme Metals Incorporated ("Acme") becomes aware than
an Acquiring Person has become such and (ii) the Expiration Date, Acme Metals
Incorporated ("Acme"), at its option, may redeem the Rights in whole, but not
in part, at a price of $.01 per Right. Immediately upon action of Acme
Metals' Incorporated ("Acme's") Board of Directors electing to redeem the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights thereafter will be to receive the redemption price.
At any time prior to the time that Acme Metals' Incorporated ("Acme's")
Board of Directors becomes aware that an Acquiring Person has become such,
Acme Metals Incorporated ("Acme") may, without the approval of any holder of
the Rights, supplement or amend any provision of the Rights Agreement
(including to effect a change in the date on which the Distribution Date will
occur), except to effect a change in the Purchase Price, the number of shares
of Series A Preferred Stock, other securities, cash of other property for
which a Right is then exercisable or the redemption price or to provide an
earlier Expiration Date. Thereafter, the Rights Agreement may be amended only
to cure ambiguities, to correct inconsistent provisions, and in ways that do
not adversely affect the interests of the holders of the Rights.
The Rights have certain anti-takeover effects. Because of the substantial
dilution the Rights would cause to a person or group that attempts to acquire
Acme Metals Incorporated ("Acme") on terms not
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approved by Acme Metals' Incorporated ("Acme's") Board of Directors (except
pursuant to an offer conditioned upon acquisition of a substantial number of
Rights), the Rights may discourage a tender or exchange offer for Acme Metals'
Incorporated ("Acme's") Common Stock or reduce the amount offered in such
transaction. The Rights should not interfere with any tender or exchange
offer or merger or other business combination approved by the Board of
Directors prior to 20 days after the Board of Directors becomes aware that a
person has become an Acquiring Person, because, until such time, the Rights
may be redeemed by Acme Metals Incorporated ("Acme") at $.01 per Right.
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EXHIBITS
1. Rights Agreement dated as of July 15, 1994 between Acme Metals Incorporated
and First Chicago Trust Company of New York as Rights Agent, which includes
as Exhibit A the Certificate of Designations of Junior Participating
Preferred Stock, Series A setting forth the terms of the Preferred Stock;
as Exhibit B the form of Rights Certificate; and as Exhibit C the form of
Summary of Rights. Pursuant to the Rights Agreement, Rights Certificates
will not be mailed until as soon as practicable after the earlier of the
tenth day after public announcement that a person or group has acquired
beneficial ownership of 15% or more of the Common Stock or the tenth day
after a person commences, or announces an intention to commence, a tender
or exchange offer the consummation of which could result in a person
beneficially owning 30% or more of the Common Stock.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
ACME METALS INCORPORATED
Date: August 5, 1994 By: /s/ Edward P. Weber, Jr.
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Name: Edward P. Weber, Jr.
Title: Vice-President, General Counsel
and Secretary
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EXHIBIT I
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ACME METALS INCORPORATED
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
RIGHTS AGREEMENT
Dated as of July 15, 1994
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TABLE OF CONTENTS
PAGE
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . 6
3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . 6
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . 8
5. Execution, Countersignature and Registration . . . . . . . . . . . . . 9
6. Transfer, Division, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates . . . . . . . 9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . 10
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . 12
9. Reservation and Availability of Preferred Stock . . . . . . . . . . . 12
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . 14
11. Antidilution Adjustments . . . . . . . . . . . . . . . . . . . . . . . 14
12. Certification of Adjustments . . . . . . . . . . . . . . . . . . . . . 21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . 21
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . 24
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16. Agreement of Rights Holders Concerning Transfer and Ownership of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17. Rights Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . 26
18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . . . . . . 26
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . 27
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 27
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 29
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . 30
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . 30
24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . 31
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . 32
27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
28. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . 33
29. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
30. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
31. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
32. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A: Form of Certificate of Designation Preferences and Rights
Exhibit B: Forms of Rights Certificates
Exhibit C: Summary of Rights
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RIGHTS AGREEMENT
Rights Agreement dated as of July 15, 1994, between Acme Metals
Incorporated , a Delaware corporation (the "COMPANY"), and First Chicago Trust
Company of New York (the "RIGHTS AGENT").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (the "RIGHT") for each
share of Common Stock (as defined in Section 1) outstanding on the Record Date
(as defined in Section 1) and has authorized the issuance of one Right for each
share of such Common Stock issued between the Record Date and the Distribution
Date (as defined in Section 1), each Right initially representing the right to
purchase one one-hundredth of a share of the Company's Preferred Stock (as
defined in Section 1) upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, 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 Common Stock then outstanding (determined without taking
into account any securities exercisable or exchangeable for, or convertible
into, Common Stock, other than any such securities beneficially owned by the
Acquiring Person and Affiliates and Associates of such Person). "Acquiring
Person" shall not include any Exempt Person.
No Person shall become an "Acquiring Person" solely as the result of
an acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Stock of the Company then
outstanding as determined above; PROVIDED, HOWEVER, that if a Person becomes the
Beneficial Owner of 15% or more of the Common Stock of the Company then
outstanding (as determined above) solely by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock by any means
whatsoever, then such Person shall be deemed to be an "Acquiring Person."
(b) "AFFILIATE" shall have the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement.
(c) "ASSOCIATE" of a Person shall mean (i) any corporation or other
organization of which such Person is an officer, director, partner or beneficial
owner of 10% of any class of equity securities; (ii) any trust or other estate
in which such Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity; and (iii) any
relative or spouse of such Person, or any relative of such spouse.
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(d) Except as provided below, a Person shall be deemed the
"BENEFICIAL OWNER" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any Affiliate or Associate of such
Person beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right (whether or not then
exercisable) to acquire pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any Affiliate or Associate of any such
Person until such tendered securities are accepted for purchase or
exchange;
(iii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right (whether or not then
exercisable) to vote 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 pursuant to this subparagraph (iii) if the
agreement, arrangement or understanding to vote such security (A)
arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and applicable rules and regulations
thereunder and (B) is not also then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iv) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate or Associate of such other Person
with whom such Person or any Affiliate or Associate of such Person 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 subparagraph (iii) of
this paragraph (c)) or disposing of any securities of the Company.
Nothing in this Section 1(d) shall cause a Person engaged in business
as an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.
(e) "BUSINESS COMBINATION" shall have the meaning set forth in
Section 13.
(f) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Illinois are authorized
or obligated by law or executive order to close.
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(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Chicago time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 p.m., Chicago time, on the next succeeding
Business Day.
(h) "COMMON STOCK" when used in any context applicable to the Company
prior to a Business Combination shall mean the Common Stock, par value $1.00 per
share, of the Company (as the same may be changed by reason of any combination,
subdivision or reclassification of the Common Stock). "Common Stock" when used
with reference to any Person (other than the Company prior to a Business
Combination) shall mean shares of capital stock of such Person (if the Person is
a corporation) of any class or series, or units of equity interests in such
Person (if the Person is not a corporation) of any class or series, the terms of
which shares or units do not limit the amount of dividends or income payable or
distributable on the shares or units or the amount of assets distributable on
the shares or units upon any liquidation, dissolution or winding up of such
Person and do not provide that the shares or units are subject to redemption at
the option of such Person, or any shares of capital stock or units of equity
interests into which the foregoing shall be reclassified or changed; PROVIDED,
HOWEVER, that if at any time there shall be more than one class or series of
capital stock of or equity interests in such Person, "Common Stock" of the
Person shall include all substantially similar classes and series of shares or
other units of equity of such Person outstanding at such time.
(i) "CONTINUING DIRECTOR" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board of
Directors of the Company, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative, designee or nominee of an
Acquiring Person or of any such Affiliate or Associate, and who was a member of
the Board of Directors of the Company on or prior to the date of this Agreement,
or (ii) any Person who becomes a member of the Board of Directors of the Company
after the date of this Agreement, while such Person is a member of the Board of
Directors of the Company, who is not an Acquiring Person, or an Affiliate of
Associate of an Acquiring Person, or a representative or designee of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board of Directors of the Company is
recommended or approved by a majority of the Continuing Directors.
(j) "CURRENT MARKET PRICE" per share of Common Stock, Preferred Stock
or Equivalent Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock, Preferred Stock or Equivalent
Shares for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event that the
Current Market Price per share of Common Stock, Preferred Stock or Equivalent
Shares is determined during a period
(i) following the announcement by the issuer of the Common
Stock, Preferred Stock or Equivalent Shares of (A) a dividend or
distribution on the Common Stock, Preferred Stock or Equivalent Shares
payable in shares of the Common Stock, Preferred Stock or Equivalent
Shares or securities convertible into, exercisable or exchangeable for
shares of such Common Stock, Preferred Stock or Equivalent Shares, or
(B) any subdivision, combination or
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reclassification of the Common Stock, Preferred Stock or Equivalent Shares,
and
(ii) prior to the expiration of 30 Trading Days after the
"ex-dividend" date for such dividend or distribution or the record
date for such subdivision, combination or reclassification,
then, and in each such case, the Current Market Price shall be appropriately
adjusted to take into account such dividend, distribution, subdivision,
combination or reclassification.
The closing price for each day shall be the last reported sale price,
regular way, or, in case no 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 the Common
Stock, Preferred Stock or Equivalent Shares, or other system then in use which
reports sales of those securities. If the Common Stock, Preferred Stock or
Equivalent Shares are not publicly held or not so listed or traded, "CURRENT
MARKET PRICE" per share shall mean the fair market value per share as determined
in good faith by the Continuing Directors (or, if no Continuing Directors are
then in office, 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.
(k) "DISTRIBUTION DATE" shall mean the Close of Business on the tenth
day after the earlier of (i) the Stock Acquisition Date and (ii) the first date
(including, without limitation, any such date which is on or after the date of
this Agreement and prior to the issuance of the Rights) of the commencement of,
or first public disclosure of the intent to commence, by any Person (other than
an Exempt Person) a tender or exchange offer for securities of the Company if,
upon consummation thereof, such Person could be the Beneficial Owner of 30% or
more of the Common Stock then outstanding, determined without taking into
account any securities exercisable or exchangeable for, or convertible into,
Common Stock.
(l) "EQUIVALENT SHARES" shall mean any class or series of capital
stock of the Company, other than the Preferred Stock, which is entitled to
participate on a proportional basis with the Preferred Stock in dividends and
other distributions, including distributions upon the liquidation, dissolution
or winding up of the Company. In calculating the number of any class or series
of Equivalent Shares for purposes of Section 11, the number of shares, or
fractions of Equivalent Shares that are entitled to the same dividend or
distribution as a whole share of Preferred Stock shall be deemed to be one
share.
(m) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute.
(n) "EXEMPT PERSON" shall mean the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of the
Company, or any Person holding Common Stock for or pursuant to the terms of any
such plan.
(o) "EXPIRATION DATE" shall mean the Close of Business on August 5,
2004.
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(p) "PERSON" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity, and shall include any "GROUP" as that term is used in Rule
13d-5(b) under the Exchange Act.
(q) "PREFERRED STOCK" shall mean the Company's Junior Participating
Preferred Stock, Series A, par value $1.00 per share, having the rights and
preferences set forth in the Form of Certificate of Designation Preferences and
Rights attached hereto as EXHIBIT A.
(r) "PRINCIPAL PARTY" shall mean, in the case of any Business
Combination described in clauses (i), (ii) or (iii) 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, or for which they are exchanged,
in the Business Combination or, if no securities are issued, the Person that is
the other party to the Business Combination, and, in the case of any Business
Combination described in clause (iv) of the first sentence in Section 13(a), the
Person that receives the greatest portion of the assets or earning power
transferred pursuant to such Business Combination; PROVIDED, HOWEVER, that in
any case, if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act and the Person is a direct or indirect subsidiary of one or
more other Persons, then (i) "Principal Party" shall refer to whichever of the
Persons has Common Stock that is and has been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act; (ii) if the
Common Stocks of two or more of such other Persons are and have been so
registered, "Principal Party" shall refer to whichever of such other Persons is
the issuer of the Common Stock having the greatest aggregate market value; or
(iii) if none of the Common Stock(s) of such other Persons have been so
registered, "Principal Party" shall refer to whichever of such other Persons
(other than an individual) is the Person having the greatest aggregate market
value.
(s) "PURCHASE PRICE" with respect to each Right shall initially be
$80.00 per one one-hundredth of a share of Preferred Stock, shall be subject to
adjustment from time to time as provided in Sections 11 and 13, and shall be
payable in lawful money of the United States of America in cash or by certified
check or bank draft payable to the order of the Company.
(t) "RECORD DATE" shall mean August 5, 1994.
(u) "REDEMPTION DATE" shall mean the time at which the Rights are
ordered to be redeemed as provided in Section 23.
(v) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and any successor statute.
(w) "STOCK ACQUISITION DATE" shall mean the first date (including,
without limitation, any such date which is on or after the date of this
Agreement and prior to the issuance of the Rights) of public disclosure by the
Company, an Acquiring Person or otherwise that a Person has become an Acquiring
Person.
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(x) "SUBSIDIARY" shall have the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement.
(y) "SUMMARY OF RIGHTS" shall mean a summary of the Rights, in
substantially the form attached hereto as Exhibit C.
(z) "TRIGGERING EVENT" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of Rights 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. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date: (i) the Rights shall be issued in
respect of and shall be evidenced by the certificates representing the shares of
Common Stock issued and outstanding on the Record Date and the shares of Common
Stock issued after the Record Date and prior to the earliest of the Distribution
Date, the Redemption Date, or the Expiration Date (which certificates for Common
Stock shall be deemed to also be certificates evidencing the Rights), and not by
separate certificates; (ii) the registered holders of shares of Common Stock
shall also be the registered holders of the Rights associated with the shares;
and (iii) the Rights shall be transferable only in connection with the transfer
of shares of Common Stock, and the surrender for transfer of any certificate for
shares of Common Stock shall also constitute the surrender for transfer of the
Rights associated with the shares.
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Rights Agent shall mail,
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, as shown by
the records of the Company, at the address of the holder shown on such records,
one or more certificates evidencing the Rights ("RIGHTS CERTIFICATES"),
evidencing one Right (as adjusted from time to time prior to the Distribution
Date, pursuant to this Agreement) for each share of Common Stock so held. From
and after the Distribution Date, the Rights will be evidenced solely by Rights
Certificates.
(c) As soon as practicable after the Record Date, the Company will
send a copy of the Summary of Rights by first-class, postage prepaid mail, to
each record holder of Common Stock as of the Close of Business on the Record
Date, as shown by the records of the Company, at the address of such holder
shown on such records.
(d) Rights shall be issued in respect of all shares of Common Stock
which are issued after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date and the Expiration Date. Certificates
issued after the Record Date representing shares of Common Stock outstanding on
the Record Date or shares of Common
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Stock issued after the Record Date but prior to the earliest of the Distribution
Date, the Redemption Date and the Expiration Date shall have impressed, printed,
or written on, or otherwise affixed to them a legend substantially in the
following form:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Acme Metals
Incorporated and First Chicago Trust Company of New York as Rights
Agent dated as of July 15, 1994 (the "RIGHTS AGREEMENT"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of Acme Metals
Incorporated. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Acme Metals Incorporated will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons or their Associates or
Affiliates (as those terms are defined in the Rights Agreement) may
become null and void and the holder of the Rights (including any
subsequent holder) shall not have any right to exercise the Rights.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the form of election to purchase
shares and form of assignment) shall be in substantially the form of 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 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 this Agreement, the Rights Certificates, whenever issued,
shall be dated as of the Distribution Date, and on their face shall entitle the
holders thereof to purchase the number of shares of Preferred Stock which shall
be set forth therein at the Purchase Price set forth therein, subject to
adjustment as provided in this Agreement.
(b) Notwithstanding any other provision of this Agreement, (i) any
Rights Certificate that represents Rights beneficially owned or formerly
beneficially owned, on or after the earlier of the Distribution Date and the
Stock Acquisition Date, by a Person known to be: (A) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person; (B) a direct or indirect
transferee of an Acquiring Person (or of an Associate or Affiliate of such
Acquiring Person) who becomes a direct or indirect transferee after the
Acquiring Person becomes such; or (C) a direct or indirect transferee of an
Acquiring Person (or of an Associate or Affiliate of such Acquiring Person) who
becomes a direct or indirect transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (x) a
direct or indirect transfer (whether or not for consideration) from the
Acquiring Person (or from an Associate or Affiliate of such Acquiring Person) to
holders of equity interests in such Acquiring Person (or to holders of equity
interests in an Associate or Affiliate of such Acquiring Person) or to any
Person with whom such Acquiring Person (or
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an Associate or Affiliate of such Acquiring Person) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (y)
a direct or indirect transfer which a majority of the Continuing Directors (or,
if no Continuing Directors are then in office, the Board of Directors of the
Company) has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of Section 7(e) of this
Agreement, and (ii) any Rights Certificate issued pursuant to this Agreement
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate beneficially owned by a Person referred to in subsection (i) above,
shall contain (to the extent feasible) 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 the Rights
Agreement.
Section 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION.
(a) Each Rights Certificate shall be executed on behalf of the
Company by the Chairman of its Board of Directors, 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. Each Rights Certificate shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed a Rights Certificate
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificate
nevertheless may be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the Person who signed such Rights
Certificate had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept, at its stock transfer or principal corporate trust office,
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 by each Rights Certificate,
and the certificate number and the date of issuance of each Rights Certificate.
Section 6. TRANSFER, DIVISION, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 14, at any time after the
Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of
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the Redemption Date and the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, divided, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock (or other securities, cash
or other property, following a Triggering Event or Business Combination, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
divide, combine or exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, divided, combined or
exchanged at the stock transfer or principal corporate trust office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. As a condition to such transfer, division, combination
or exchange, the Company may require payment by the surrendering holder of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection therewith. 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 duly
completed and executed 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 such former or proposed Beneficial Owner) thereof or
such Beneficial Owner's Affiliates or Associates as the Company shall reasonably
request.
(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 make and deliver a new Rights Certificate of like
tenor to the Rights Agent for 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) Each Right shall entitle (except as otherwise provided in this
Agreement) the registered holder thereof, upon the exercise thereof as provided
in this Agreement, to purchase, for the Purchase Price, at any time after the
Distribution Date and prior to the earlier of the Expiration Date and the
Redemption Date, one one-hundredth of a share of Preferred Stock, subject to
adjustment from time to time as provided in Sections 11 and 13.
(b) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided in this Agreement) in
whole or in part at any time on or after the Distribution Date and prior to the
earlier of the Expiration Date and the Redemption Date, by surrendering the
Rights Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the stock transfer or principal
corporate trust office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are
exercised.
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(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for each one one-hundredth of a share of Preferred
Stock (or other securities, cash or other assets, as the case may be) to be
purchased and an amount in cash, certified bank check or money order payable to
the order of the Company equal to any applicable transfer tax required to be
paid by the surrendering holder pursuant to Section 9(d), the Rights Agent
shall, subject to the provisions of this Agreement, thereupon promptly (i)(A)
requisition from any transfer agent for the Preferred Stock of the Company (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of one one-hundredth shares of Preferred 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 Preferred Stock issuable upon exercise of
the Rights with a depositary agent, requisition from the depositary agent,
depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company shall direct the depositary
agent to comply with such request; (ii) 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
as may be designated by such holder; and (iii) if appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 of this Agreement and, promptly after
receipt thereof, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate. In the event that the Company is
obligated to issue other securities (including shares of Common Stock) of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were formerly beneficially owned on or after the earlier of
the Distribution Date or the Stock Acquisition Date by (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a direct or indirect
transferee of an Acquiring Person (or of an Associate or Affiliate of such
Acquiring Person) who becomes a direct or indirect transferee after the
Acquiring Person becomes such, or (iii) a direct or indirect transferee of an
Acquiring Person (or of an Associate or Affiliate of such Acquiring Person) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a direct or indirect
transfer (whether or not for consideration) from the Acquiring Person (or from
an Associate of such Acquiring Person) to holders of equity interests in such
Acquiring Person (or to holders of equity interests in any Associate or
Affiliate of such Acquiring Person) or to any Person with whom the Acquiring
Person (or an Associate or Affiliate of such Acquiring Person) has any
continuing agreement,
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arrangement or understanding regarding the transferred Rights or (B) a direct or
indirect transfer which a majority of the Continuing Directors (or, if no
Continuing Directors are then in office, the Board of Directors of the Company)
determines is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall, immediately
upon the occurrence of a Triggering Event and without any further action, be
null and void and no holder of such Rights shall have any rights whatsoever with
respect to such Rights whether under this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) are complied with, but shall have no liability to any
holder of a Rights Certificate or to any other Person as a result of the failure
by it (including the Continuing Directors and the Board of Directors of the
Company) 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 the registered holder of a Rights Certificate 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 or proposed
Beneficial Owner) thereof or the Affiliates or Associates of such Beneficial
Owner (or former or proposed Beneficial Owner) as the Company shall reasonably
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
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 PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred Stock
held in its treasury (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 of Common Stock and/or other securities
held in its treasury) free from preemptive rights or any right of first refusal,
sufficient numbers of shares of Preferred Stock (and, following the occurrence
of a Triggering Event, shares of Common Stock and/or other securities) to permit
the exercise in full of all Rights from time to time outstanding.
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(b) The Company further covenants and agrees, so long as the
Preferred Stock (and, following the occurrence of a Triggering Event, shares of
Common Stock and/or other securities) issuable upon the exercise of Rights may
be listed on any national securities exchange, to use its best efforts to cause,
from and after the time that the Rights become exercisable, all such shares
and/or other securities reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) delivered upon the exercise of Rights shall, at the
time of delivery of the certificates for such shares and/or other securities
(subject to payment of the Purchase Price), be duly and validly authorized and
issued, fully paid, nonassessable, freely tradeable, not subject to liens or
encumbrances, and free of preemptive rights, rights of first refusal or any
other restrictions or limitations on the transfer or ownership thereof, of any
kind or nature whatsoever.
(d) 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 original issuance or delivery of the Rights
Certificates or of any shares of Preferred 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 (i) pay any transfer tax which may be payable in
respect of any transfer involved in the issuance or delivery of Rights
Certificates or the issuance or delivery of certificates for Preferred Stock (or
Common Stock and/or other securities as the case may be) to a Person other than,
or in a name other than that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or (ii) transfer or deliver any
Rights Certificate or issue or deliver any certificates for shares of Preferred
Stock (or Common Stock and/or other securities as the case may be) upon the
exercise of any Rights until any 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.
(e) The Company shall use its best efforts to (i) prepare and file,
as soon as practicable following a Triggering 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) of this Agreement, or as soon as is
required by law following the Distribution Date, as the case may be, a
registration statement on an appropriate form under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (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 Securities Act)
until the earlier of (A) the date as of which Rights are no longer exercisable
for such securities and (B) the Expiration Date. The Company shall also take
such action as may be necessary under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercise of the Rights. The Company may temporarily suspend, for a period of
time not to exceed 90 days after the date set forth in clause (i) of the first
sentence of this paragraph of Section 9, 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 make a public
announcement
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stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement has been declared effective.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate for shares of Preferred 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 the Preferred
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 any applicable transfer taxes) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the
Preferred 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 on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
open.
Section 11. ANTIDILUTION ADJUSTMENTS. The Purchase Price, the number
and kind of securities, cash and other property obtainable upon exercise of each
Right and the number of Rights outstanding shall be subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time on or after the
date of this Agreement (A) declare a dividend or make a distribution on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide (by a stock
split or otherwise) the outstanding Preferred Stock into a larger number of
shares, (C) combine (by a reverse stock split or otherwise) the outstanding
Preferred Stock into a smaller number of shares, or (D) issue any cash,
securities or other property in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving corporation), then in each such
event the Purchase Price in effect at the time of the record date for such
dividend or distribution, or of the effective date of such subdivision,
combination or reclassification and the number of shares of Preferred Stock or
other securities, cash or other property issuable upon exercise of a Right on
such date shall be proportionately adjusted so that the holder of any Right
(except as provided in Section 7(e)) exercised on or after such date shall be
entitled to receive, upon payment of the Purchase Price in effect immediately
prior to such date, the aggregate number of shares of Preferred Stock, other
securities, cash or other property which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, he would have owned upon such exercise and would
have been entitled to receive by virtue of such dividend, distribution,
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),
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).
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(ii) A "Triggering Event" shall be deemed to occur in the event that:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time on or after the date of this Agreement, directly
or indirectly, shall (1) merge with and into the Company or any of its
subsidiaries or otherwise combine with the Company or any of its subsidiaries
and the Company or such subsidiary shall be the continuing or surviving
corporation in such merger or combination and the Common Stock of the Company
shall remain outstanding, (2) in one or a series of related transactions,
directly or indirectly, transfer any assets to the Company or any of its
subsidiaries in exchange (in whole or in part) for shares of Common Stock or for
securities exercisable or exchangeable for, or convertible into, shares of
Common Stock or otherwise obtain from the Company or any of its subsidiaries,
with or without consideration, any additional Common Stock or other securities
of the Company or securities of any of its subsidiaries or securities
exercisable or exchangeable for, or convertible into, shares of Common Stock or
other securities of the Company or securities of any of its subsidiaries (other
than an issuance upon conversion of convertible securities of the Company or any
such subsidiary that were not acquired from the Company or any such subsidiary),
(3) other than pursuant to a Business Combination, sell, purchase, lease,
exchange, mortgage, pledge, otherwise transfer or dispose or acquire, from, to,
with or of, the Company or any of its subsidiaries, assets (including
securities) on terms and conditions less favorable to the Company or such
subsidiary than the Company or such subsidiary would be able to obtain in an
arm's-length transaction with an unrelated third party, (4) sell, purchase,
lease, exchange, mortgage, pledge, otherwise transfer or acquire or dispose, in
one transaction or a series of related transactions, from, to, with or of, the
Company or any of its subsidiaries, other than pursuant to a Business
Combination or in the ordinary course of business, assets (including securities)
having an aggregate fair market value of more than $2,500,000 (including any
such transaction pursuant to a distribution, pro rata or otherwise, or offer to
all holders of Common Stock, but excluding any regular periodic cash dividend),
(5) receive any compensation from the Company or any of its subsidiaries other
than compensation for full-time employment as a regular employee, at rates in
accordance with past practices of the Company and its subsidiaries, or (6)
receive the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided by or for the
benefit of the Company or any of its subsidiaries, or
(B) any Person (other than an Exempt Person), alone or together
with its Affiliates and Associates, shall become the Beneficial Owner of 15% or
more of the Common Stock then outstanding (determined without taking into
account any securities exercisable or exchangeable for, or convertible into,
Common Stock), or
(C) during the time when there is an Acquiring Person, there
occurs any reclassification of securities of the Company (including any reverse
stock split), any recapitalization of the Company, any merger or consolidation
of the Company with any of its subsidiaries, or any other transaction or series
of related transactions involving the Company (whether or not involving an
Acquiring Person or any Affiliate or Associate thereof) which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its
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subsidiaries which is directly or indirectly beneficially owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring Person, or
(D) during the time when there is an Acquiring Person, (1) there
shall be any reduction in the annual rate of dividends paid on the Common Stock
(except as necessary or appropriate, in the opinion of the Continuing Directors,
for valid business reasons, to reflect any subdivision of the Common Stock or as
required under the laws of the jurisdiction of incorporation of the Company) or
(2) there shall be a failure to increase the annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, combination, reorganization or any similar transaction which
has the effect of reducing the number of shares of outstanding Common Stock
(except as necessary or appropriate, in the opinion of the Continuing Directors,
for valid business reasons or to the extent such increase in the rate of
dividends would be prohibited under the laws of the jurisdiction of
incorporation of the Company).
Upon the occurrence of a Triggering Event, proper provision shall be
made so that each holder of a Right, except as otherwise provided in this
Agreement, 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-hundredths of a share of Preferred Stock, such
number of shares of Common Stock as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the number of one one-hundredth
shares of Preferred Stock for which a Right was then exercisable (without giving
effect to such Triggering Event) and (y) dividing that product by 50% of the
Current Market Price per share of Common Stock immediately after the first
occurrence of a Triggering Event; PROVIDED, HOWEVER, that if the transaction or
event that would otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 of this Agreement, then only the provisions of
Section 13 of this Agreement shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
(iii) In the event the Company shall not have sufficient treasury
shares or authorized but unissued shares of Common Stock to permit the exercise
in full of the Rights as adjusted in accordance with Section 11(a)(ii), the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exercise of the Rights; PROVIDED,
HOWEVER, that if the Company is unable to cause the authorization of additional
shares of Common Stock within 60 days after the occurrence of a Triggering
Event, then the Company, to the extent necessary and permitted by applicable law
and any agreements or instruments in effect on the date of this Agreement to
which it is a party, shall upon exercise of a Right and receipt of the Purchase
Price, pay in cash an amount equal to the aggregate Current Market Price of the
shares of Common Stock which otherwise would have been issuable upon exercise of
such Right as adjusted pursuant to Section 11(a)(ii) in lieu of issuing such
shares, or may, in the discretion of the Continuing Directors, issue other
equity securities or distribute a combination of Common Stock, cash and/or other
equity securities, having a value equal to the aggregate Current Market Price of
the shares of Common Stock which otherwise would have been issuable upon
exercise of such Right as adjusted pursuant to Section 11(a)(ii), in lieu of
issuing such shares, which value, in the case of consideration not consisting
solely of Common Stock and cash (in lieu of Common Stock
15
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as determined above), shall be determined by a nationally recognized investment
banking firm selected by a majority of the Continuing Directors.
(b) If the Company shall at any time on or after the date of this
Agreement fix a record date for the issuance of rights, options or warrants to
holders of Preferred Stock entitling them to subscribe for or purchase Preferred
Stock or Equivalent Shares (or securities convertible into Preferred Stock or
Equivalent Shares) at a price per share of Preferred Stock or Equivalent Shares
(or, in the case of a convertible security, having a conversion price per share
of Preferred Stock or Equivalent Shares) less than the Current Market Price per
share of Preferred Stock on such record date, the Purchase Price to be in effect
after the record date shall be determined by multiplying the Purchase Price in
effect immediately prior to the record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock and Equivalent Shares (if
any) outstanding on the record date, plus the number of shares of Preferred
Stock or Equivalent Shares which the aggregate exercise and/or conversion price
for the total number of shares of Preferred Stock or Equivalent Shares, as the
case may be, which are obtainable upon exercise and/or conversion of such
rights, options, warrants or convertible securities would purchase at such
Current Market Price, and the denominator of which shall be the number of shares
of Preferred Stock and Equivalent Shares (if any) outstanding on the record
date, plus the number of additional shares of Preferred Stock or Equivalent
Shares, which may be obtained upon exercise and/or conversion of all rights,
options, warrants or convertible securities. If the subscription price may be
paid in a consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by a
majority of the Continuing Directors (or, if no Continuing Directors are then in
office, 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. Preferred Stock and Equivalent Shares owned by or held for the
account of the Company or any subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Any required adjustment
shall be made successively whenever a record date is fixed; and in the event
that rights, options or warrants are not issued following an adjustment, the
Purchase Price shall be readjusted to be the Purchase Price which would have
been in effect if the record date had not been fixed.
(c) In case the Company shall at any time after the date of this
Agreement fix a record date for the making of a distribution to holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving corporation) of
securities (other than Preferred Stock and rights, options or warrants referred
to in Section 11(b)), cash (other than a regular periodic cash dividend at an
annual rate not in excess of 125% of the annual rate of the cash dividend paid
on the Preferred Stock during the immediately preceding fiscal year), property,
evidences of indebtedness, or assets, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by a majority of
the Continuing Directors (or if no Continuing Directors are then in office, by
the Board of Directors of the Company) whose determination shall be described in
a statement filed with the Rights Agent) of such securities, cash, property,
evidences of
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indebtedness or assets to be so distributed in respect of one share of Preferred
Stock, and the denominator of which shall be such Current Market Price per share
of Preferred Stock on such record date. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not made following such adjustment, the Purchase Price shall be
readjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) Except as provided below, no adjustment in the Purchase Price
shall be required, unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 11(d) 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, to the
nearest ten-thousandth of a share of Common Stock, or to the nearest one
one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(d), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires the adjustment or (ii) the
Expiration Date.
(e) If, as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) of this Agreement, the holder of any Right thereafter exercised
shall become entitled to receive any securities of the Company other than shares
of Preferred Stock, thereafter the number of such other securities so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Preferred Stock contained in this Section 11 and the
provisions of Sections 7, 9, 10, 12, 13 and 14 with respect to the shares of
Preferred Stock shall apply on like terms to any such other securities.
(f) 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 shares of Preferred
Stock or other securities, cash or other property purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided in this Agreement.
(g) Unless the Company shall have exercised its election as provided
in Section 11(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredth
shares of Preferred Stock (calculated to the nearest one one-millionth of a
share of Preferred Stock) obtained by (i) multiplying the number of one
one-hundredth shares of Preferred Stock covered by a Right immediately prior to
adjustment pursuant to this Section 11(g) by 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.
(h) 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 an adjustment in
the number of one one-hundredth shares of Preferred Stock purchasable upon the
exercise of a Right. Each of
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the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred 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 such
adjustment by the Purchase Price in effect immediately after such adjustment.
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 10 days after 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(h) the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date a new Rights Certificate
evidencing, subject to Section 14, 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 to be so
distributed shall be issued, executed and countersigned in the manner provided
for in this Agreement (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.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number or kind of shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-hundredth share of Stock and the number of shares
of Preferred Stock which were expressed in the initial Rights Certificates
issued hereunder.
(j) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
such Preferred Stock at such adjusted Purchase Price.
(k) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the shares of Preferred
Stock and other securities, cash or property of the Company, if any, issuable
upon such exercise over and above the shares of Preferred Stock and other
securities, cash or property 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 or other securities, cash or property upon the occurrence of the event
requiring such adjustment.
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<PAGE>
(l) 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 the Company in its sole discretion shall determine to be
advisable in order that any (i) combination or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable or
exercisable for Preferred 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 Preferred Stock, shall not be taxable to such common
stockholders.
(m) The Company covenants and agrees that it shall not (i)
consolidate with, (ii) merge with or into, or (iii) directly or indirectly sell,
lease, or otherwise transfer or dispose of (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 if (A) at the time of or immediately after the consolidation,
merger, sale, lease, transfer or disposition there are any rights, warrants,
securities or other instruments outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (B) prior to, simultaneously with or immediately after
the consolidation, merger, sale, lease, transfer or disposition, the
shareholders (or equity holders) of the Person who constitutes, or would
constitute, the Principal Party in the transaction shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
or Associates.
(n) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or 26 of this
Agreement, take any action if at the time such action is taken it is reasonably
foreseeable that such action will, directly or indirectly, diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time prior to the Distribution Date (i)
declare a dividend or distribution 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 of 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. CERTIFICATION OF ADJUSTMENTS. Whenever an adjustment is
made as provided in Sections 11 and 13, 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 Preferred Stock a
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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.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) A "Business Combination" shall be deemed to occur in the event
that, following the Stock Acquisition Date, (i) the Company shall, directly or
indirectly, consolidate with, or merge with and into, any other Person (other
than a subsidiary of the Company in a transaction that complies with Section
11(m) and Section 11(n) of this Agreement), (ii) any Person (other than a
subsidiary of the Company in a transaction that complies with Section 11(m) and
Section 11(n) of this Agreement) shall, directly or indirectly, consolidate with
the Company, or shall merge with and into the Company, in a transaction in which
the Company is the continuing or surviving corporation and, in connection with
the merger or consolidation, all or part of the Common Stock shall be changed
into (including, without limitation, any conversion into or exchange for)
securities of the Company or of any other Person, cash or any other property
(iii) the Company shall, directly or indirectly, effect a share exchange in
which all or part of Common Stock shall be changed (including, without
limitation, any conversion into or exchange for securities of any other Person,
cash or any other property) or (iv) the Company shall, directly or indirectly,
sell, lease, exchange, mortgage, pledge or otherwise transfer or dispose of (or
one or more of its subsidiaries shall, directly or indirectly, sell, lease,
exchange, mortgage, pledge or otherwise transfer or dispose of), 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 (other than the Company or
any of its subsidiaries in one or more transactions each and all of which comply
with Section 11(m) and Section 11(n) of this Agreement).
In the event of a Business Combination, proper provision shall be made
so that each holder of a Right (except as otherwise provided in this Agreement)
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, that
number of shares of Common Stock of the Principal Party as shall be equal to the
result obtained by (x) multiplying the then-current Purchase Price by the number
of one one-hundredth shares of Preferred Stock for which a Right was exercisable
immediately prior to the occurrence of the Business Combination (without giving
effect to the consummation of the Business Combination) and (y) dividing that
product by 50% of the Current Market Price per share of the Common Stock of the
Principal Party immediately prior to the consummation of such Business
Combination. All Common Stock of any Person for which any Right may be
exercised after consummation of a Business Combination as provided in this
Section 13(a) shall, when issued upon exercise thereof in accordance with this
Agreement, be duly and validly authorized and issued, fully paid, nonassessable,
freely tradeable, not subject to liens or encumbrances, and free of preemptive
rights, rights of first refusal or any other restrictions or limitations on the
transfer or ownership thereof of any kind or nature whatsoever.
20
<PAGE>
(b) After consummation of any Business Combination, (i) the Principal
Party shall be liable for, and shall assume, by virtue of such Business
Combination and without the necessity of any further act, all the obligations
and duties of the Company pursuant to this Agreement, (ii) the term "Company" as
used in this Agreement shall thereafter be deemed to refer to such Principal
Party, and (iii) such Principal Party shall take all steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
in accordance with Section 9) in connection with such Business Combination as
necessary to ensure that the provisions of this Agreement shall be applicable,
as nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(c) The Company shall not consummate any Business Combination unless
prior thereto (i) the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance (other than shares reserved for issuance pursuant to this Agreement to
the holders of Rights) to permit the exercise in full of the Rights in
accordance with this Section 13, (ii) the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the fulfillment of the Principal Party's obligations and the terms
as set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable on or after the date of such Business Combination,
the Principal Party, at its own expense, shall (A) prepare and file a
registration statement on an appropriate form under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights, (B) use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date, (C) 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, (D) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate, and (E) use its best
efforts to list the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange, (iii) the Company and the Principal
Party shall have furnished to the Rights Agent an opinion of independent counsel
stating that such supplemental agreement is a legal, valid and binding agreement
of the Principal Party enforceable against the Principal Party in accordance
with its terms, and (iv) the Company and the Principal Party shall have filed
with the Rights Agent a certificate of a nationally recognized firm of
independent accountants setting forth the number of shares of Common Stock of
such issuer which may be purchased upon the exercise of each Right after the
consummation of such Business Combination.
(d) The provisions of this Section 13 shall similarly apply to
successive Business Combinations. In the event a Business Combination shall be
consummated at any time after the occurrence of a Triggering Event, the Rights
which have not theretofore been exercised shall thereafter be exercisable for
the consideration and in the manner described in Section 13(a). Following a
Business Combination, the provisions of Section 11(a)(ii) of this Agreement
shall be of no effect.
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(e) Notwithstanding any other provision of this Agreement, no
adjustment to the number of shares of Preferred Stock (or fractions of a share)
or other securities, cash or other property for which a Right is exercisable or
the number of Rights outstanding or associated with each share of Common Stock
or any similar or other adjustment shall be made or be effective if such
adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including, without
limitation, the benefits under Sections 11 and 13, unless the terms of this
Agreement are amended so as to preserve such benefits.
(f) The Company covenants and agrees that it shall not effect any
Business Combination if at the time of, or immediately after, such Business
Combination, there are any rights, options, warrants or other instruments
outstanding which would diminish or otherwise eliminate the benefits intended to
be afforded by the Rights.
(g) Without limiting the generality of this Section 13, in the event
the nature of the organization of any Principal Party shall preclude or limit
the acquisition of Common Stock of such Principal Party upon exercise of the
Rights as required by Section 13(a) as a result of a Business Combination, it
shall be a condition to such Business Combination that such Principal Party
shall take such steps (including, but not limited to, a reorganization) as may
be necessary to ensure that the benefits intended to be derived under this
Section 13 upon the exercise of the Rights are assured to the holders thereof.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractional Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company may at its option pay to the registered
holders of the Rights Certificates with respect to which such fractional Rights
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of a Right
for the Trading Day immediately prior to the date on which such fractional
Rights otherwise would have been issuable. The closing price for any day 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 Inc. or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, Inc. 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 sale 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 system, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by a majority of the Continuing Directors (or if no Continuing
Directors are then in office, the Board of Directors of the Company). If on any
such Trading Day no such market maker is making a market in the Rights, the
current market value of the Rights on such
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<PAGE>
Trading Day shall be determined in good faith by a majority of the Continuing
Directors (or if no Continuing Directors are then in office, the Board of
Directors of the Company).
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). Fractions of shares of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock. In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-hundredth
of a share of Preferred Stock, the Company may at its option (i) issue scrip or
warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which shall
entitle the holder to receive a full one one-hundredth of a share of Preferred
Stock upon the surrender of such scrip or warrants aggregating a full one
one-hundredth of a share of Preferred Stock, or (ii) pay to the registered
holders of Rights Certificates, at the time such Rights Certificates are
exercised as provided in this Agreement, an amount in cash equal to the same
fraction of the current market value of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of a share of Preferred
Stock shall be the closing price of a share of Preferred Stock (as determined
pursuant to the second sentence of Section 1(j)) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by his acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as otherwise provided in this Agreement).
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
associated Common Stock); and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, any share of associated Common Stock),
without the consent of the Rights Agent or of the holder of any other Right,
may, on his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his rights pursuant to this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights will not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS CONCERNING TRANSFER AND
OWNERSHIP OF RIGHTS. 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;
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<PAGE>
(b) after the Distribution Date, the Rights Certificates will be
transferable on the registry books of the Rights Agent only if surrendered at
the stock transfer or principal corporate trust office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the 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 Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; 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 shall use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHTS HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Rights Certificate shall be entitled to vote or to receive
dividends or distributions or shall be deemed for any purpose the holder of
Preferred Stock or any other securities, cash or other property which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained in this Agreement 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, including, without limitation, any right (i) to
vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, (ii) to give or withhold consent to any corporate
action, (iii) to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), (iv) to receive dividends,
distributions or subscription rights, (v) to institute, as a holder of Preferred
Stock or other securities issuable on exercise of the Rights represented by any
Rights Certificate, any derivative action on behalf of the Company, or
otherwise, until and only to the extent that the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions of this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent 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
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<PAGE>
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or 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 reasonably believed by it to be genuine and to be signed,
executed and, when necessary, verified or acknowledged, by the proper Person or
Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificate 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 Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the 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.
25
<PAGE>
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate of an Acquiring Person) 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 specifically prescribed in this
Agreement) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board of Directors of the Company, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution and delivery of this Agreement 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 change or
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23 or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after actual
notice of any change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock, Common Stock or
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock, Common Stock or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performance by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board of Directors of the Company, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
26
<PAGE>
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
Securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though the Rights Agent were not
serving as such under this Agreement. Nothing in this Agreement shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock or Preferred 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 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 or Preferred 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 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by any holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the 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, (a) shall be a corporation
organized and doing business under the laws of the United States or of the State
of Illinois (or of any other state of the United States so long as such
corporation is authorized to conduct a corporate trust or banking business in
the State of Illinois) in good standing, having a stock transfer or principal
corporate trust office in the State of Illinois, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) is an affiliate of a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally
27
<PAGE>
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 such 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 or Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Continuing Directors
(or if no Continuing Directors are then in office, by the Board of Directors of
the Company) to reflect any adjustment or change in the Purchase Price per share
and the number or kind or class of securities, cash or other property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement.
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 time the Board of Directors of the Company
becomes aware that an Acquiring Person has become such; PROVIDED, HOWEVER, that
the Board of Directors of the Company may extend that time for up to an
additional twenty days, and (ii) the Expiration Date, redeem all but not less
than all the then-outstanding Rights at a redemption price of $.01 per Right
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement).
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, without any further action and
without any further 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. As soon as practicable after the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and to the holders of
the then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner provided in this
Agreement 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. In any case, failure to give such notice by
mail, or any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner, other than that specifically set
forth in this Section 23, and other than in
28
<PAGE>
connection with the purchase of shares of associated Common Stock prior to the
Distribution Date.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose to (a) pay any dividend payable in stock of any class to the holders of
its Preferred Stock or to make any other distribution to the holders of its
Preferred Stock (other than a regular periodic cash dividend at an annual rate
not in excess of 125% of the annualized rate of the cash dividend paid on the
Preferred Stock during the immediately preceding fiscal year), or (b) offer to
the holders of its Preferred Stock rights, options, or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or shares of stock of
any class or any other securities, rights or options, or (c) effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock, a change in the
par value of such Preferred Stock or a change from par value to no par value),
or (d) directly or indirectly effect any consolidation or merger into or with,
or effect any sale, lease, exchange, or other transfer or disposition (or to
permit one or more of its subsidiaries to effect any sale, lease, exchange or
other transfer or disposition), 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 (e) effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 25,
a notice of such proposed action, which shall specify any record date for the
purposes of such stock dividend or distribution of rights, or the date on which
such reclassification, consolidation, merger, sale, lease, exchange, transfer,
disposition, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of Common Stock and/or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (a) or (b) above at least 20 days prior to
the record date for determining holders of the Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Preferred Stock, whichever shall be the earlier. The
failure to give notice as required by this Section 24 or any defect therein
shall not affect the legality or validity of the action taken by the Company or
the vote upon any such action.
In case any Triggering Event shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 25, a notice of the occurrence of such
Triggering Event, which shall specify the Triggering Event and a description of
the consequences of such Triggering Event to holder of Rights under Section
11(a)(ii).
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:
29
<PAGE>
Acme Metals Incorporated
13500 S. Perry Avenue
Riverdale, Illinois 60627-1182
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders and Exchanges Administration
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 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.
(a) At any time prior to the time the Board of Directors of the
Company becomes aware that an Acquiring Person has become such, the Company may,
except as otherwise provided in Section 26(c), and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holder of the Rights.
(b) After the time the Board of Directors of the Company becomes
aware that an Acquiring Person has become such, the Company may, except as
provided in Section 26(c), and the Rights Agent shall if the Company so directs,
amend this Agreement without the approval of any holders of Rights Certificates
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
in this Agreement which may be defective or inconsistent with any other
provision of this Agreement, or (iii) 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).
(c) No supplement or amendment to this Agreement shall be made which
changes the Purchase Price, the number of shares of Preferred Stock, other
securities, cash or other property for which a Right is then exercisable or the
redemption price or provides for an earlier Expiration Date.
(d) Upon the delivery of a certificate from an appropriate officer of
the Company which states that a proposed supplement or amendment to this
Agreement is in
30
<PAGE>
compliance with the provisions of this Section 26, the Rights Agent shall
execute such supplement or amendment.
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. BENEFITS OF THIS AGREEMENT.
(a) Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
Rights any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights.
(b) Any action required under this Agreement to be approved by a
majority of the Continuing Directors shall also be required to be approved by a
majority of the Board of Directors of the Company. The Board of Directors of
the Company (except when approval of the Continuing Directors is specifically
provided for in this Agreement) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
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 this 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
of Directors of the Company (subject, where specifically provided for in this
Agreement, to the approval of the Continuing Directors) in good faith, shall (x)
be final, conclusive and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties and (y) not subject the Board of Directors
of the Company or the Continuing Directors to any liability to the holders of
the Rights.
Section 29. SEVERABILITY.
(a) 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.
(b) If legal counsel to the Company delivers to the Company a written
opinion to the effect that, as a result of changes in federal law or Delaware
law, any term, provision, covenant or restriction of this Agreement may be
invalid, void, or unenforceable, then, notwithstanding any other provision of
this Agreement, the Company and the Rights Agent may amend this Agreement to
modify, revise or delete such term, provision, covenant or restriction to the
extent necessary to comply with such law as so changed.
31
<PAGE>
Section 30. GOVERNING LAW. This Agreement 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 internal laws of such state applicable to
contracts to be made and performed entirely within such State.
Section 31. 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 32. 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 of
this Agreement.
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.
ACME METALS INCORPORATED
By: /s/ Edward P. Weber, Jr.
--------------------------
Its: Vice President
ATTEST:
By: /s/ Roberta A. Glab
--------------------------
Assistant Secretary
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Joanne Gorostiola
-----------------------------
Joanne Gorostiola
Assistant Vice President
ATTEST:
By: /s/ Ralph Persico
- - ------------------------------
Customer Service Officer
32
<PAGE>
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF JUNIOR PARTICIPATING PREFERRED STOCK, SERIES A
of
ACME METALS INCORPORATED
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Brian W.H. Marsden, Chairman and Chief Executive Officer, and
Edward P. Weber, Jr., Secretary, of Acme Metals Incorporated, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 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 __________, 1994, adopted the following resolution
creating a series of ________ shares of Preferred Stock designated as Junior
Participating Preferred Stock, Series A:
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 Preferred 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 "Junior Participating Preferred Stock, Series A" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
________.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of
common stock, $1.00 par value per share, of the Corporation (the "Common
Stock") and of any other junior 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 fifteenth day
of March, June, September and December in each year (each such date being
referred to
A - 1
<PAGE>
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 Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $25.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time on or after August 5, 1994 declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision of combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which holders
of shares of Series A Preferred 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 Preferred Stock as provided in paragraph (A) of this Section
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
$25.00 per share on the Series A Preferred 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 Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred
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 Preferred 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 Preferred 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
A - 2
<PAGE>
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time on or after
August 5, 1994 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred 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 Preferred 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) Except as set forth herein, holders of Series A Preferred 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 Preferred 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 Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
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
Preferred Stock, except dividends
A - 3
<PAGE>
paid ratably on the Series A Preferred 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 junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior 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 Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred 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 Preferred 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
preferred stock and may be reissued as part of a new series of preferred 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. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled
A - 4
<PAGE>
upon such liquidation, dissolution or winding up. In the event the Corporation
shall at any time on or after August 5, 1994 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) 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.
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 Preferred Stock then outstanding 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 100 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 on or after August 5,
1994 declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, 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 Preferred 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 Preferred Stock
shall not be redeemable.
A - 5
<PAGE>
Section 9. AMENDMENT. The Restated Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of the outstanding shares of Series A Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of this
____ day of __________, 1994.
----------------------------------------------
Brian W.H. Marsden
Chairman and Chief Executive Officer
ATTEST:
- - -------------------------------
Edward P. Weber, Jr., Secretary
A - 6
<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER AUGUST 5, 2004 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
[THE RIGHTS REPRESENTED BY THIS 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 BECAME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]
RIGHTS CERTIFICATE
ACME METALS INCORPORATED
This certifies that or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of July 15, 1994 (the "RIGHTS
AGREEMENT") between Acme Metals Incorporated, a Delaware corporation (the
"COMPANY"), and First Chicago Trust Company of New York (the "RIGHTS AGENT"),
unless notice of redemption shall have been previously given by the Company, to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Chicago, Illinois
time) on August 5, 2004 (the "EXPIRATION DATE"), at the stock transfer or
principal corporate trust office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid nonassessable share
of the Junior Participating Preferred Stock, Series A, par value $1.00 per
share, of the Company, at a purchase price of $80.00 per one one-hundredth share
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase duly executed. The Purchase Price may be paid in cash or
by certified bank check or money order payable to the order of the Company.
The number of Rights evidenced by this Rights Certificate (and the
number of shares of Preferred Stock which may be purchased upon exercise
thereof) and the Purchase Price set forth above have been determined as of
August 5, 1994, based on the Common
B - 1
<PAGE>
Stock of the Company as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of shares of Preferred Stock or
other securities, cash or other property 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.
If the Rights evidenced by this Rights Certificate are or were
formerly beneficially owned, on or after the earlier of the Distribution Date
and the Stock Acquisition Date, by an Acquiring Person or an Affiliate,
Associate or direct or indirect transferee of an Acquiring Person, such Rights
may become null and void and the holder of any such Right (including any
subsequent holder) shall not have any right with respect to such Right.
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.
Capitalized terms used in this Certificate have the same meanings as such terms
are defined in the Rights Agreement. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned office
of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the stock transfer or principal corporate trust office of the
Rights Agent, 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 shares of Preferred Stock or other property
as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
time the Board of Directors of the Company becomes aware that an Acquiring
Person has become such (with the possibility of an extension for an additional
twenty (20) days) and (ii) the Expiration Date.
No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depository receipts) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
but in lieu thereof the Company may elect to (i) issue scrip or warrants in
registered form (either represented by a certificate or uncertificated) or in
bearer form (represented by a certificate) which shall entitle the holder to
receive a full share upon the surrender of such scrip or warrants aggregating a
full share or (ii) make a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or to receive dividends or shall be deemed for any purpose the holder of
Preferred Stock or of any
B - 2
<PAGE>
other securities, cash or property which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or this
Certificate be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company, including, without limitation, 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 to institute, as a holder of Preferred
Stock or other securities issuable on the exercise of the Rights represented by
this Certificate, any derivative action, or otherwise, until and only to the
extent 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 __________, 19__.
ACME METALS INCORPORATED
By:
---------------------------------------
Title:
ATTEST:
- - ---------------------------
Secretary
Countersigned:
- - ----------------------------
By:
--------------------------
Authorized Signature
B - 3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificates.)
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers unto ____________________________ (Please print name and
address of transferee) this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: , 19
------------------- --
-------------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
B - 4
<PAGE>
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 or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: , 19 Signature
----------------- -- -----------------------------
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Rights
Certificate issued in exchange for this Rights Certificate.
B - 5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented
by this Rights Certificate)
To: Acme Metals Incorporated
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented and by this Rights Certificate to purchase
the shares of Preferred Stock or other securities, cash or other property
issuable upon the exercise of such Rights and requests that certificates for
such shares or other securities be issued in the name of, and such cash or other
property be paid to:
Please insert social security
or other identifying number
- - --------------------------------------------------------------------------------
(Please print name and address)
- - --------------------------------------------------------------------------------
B - 6
<PAGE>
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining 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 must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
B - 7
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is 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 or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: , 19 Signature
----------------- -- ----------------------------------
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
NOTICE
The signature on the foregoing Form of 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.
In the event the certification set forth above in the Form of Election
is not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
B - 8
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of Acme Metals Incorporated, a Delaware corporation
(the "COMPANY"), declared a dividend of one preferred share purchase right (a
"RIGHT") for each share of Common Stock, $1.00 par value, of the Company (the
"COMMON STOCK"). The dividend is payable on August 5, 1994 to stockholders of
record at the close of business on August 5, 1994 (the "RECORD DATE"), and with
respect to all shares of Common Stock that become outstanding after the Record
Date and prior to the earliest of the Distribution Date (as defined below), the
redemption of the Rights and the expiration of the Rights. Except as set forth
below and subject to adjustment as provided in the Rights Agreement (as defined
below), each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of the Company's Junior Participating Preferred
Stock, Series A, $1.00 par value per share (the "PREFERRED STOCK"), at an
exercise price of $80.00 per share (the "PURCHASE PRICE"). The description and
terms of the Rights are set forth in a Rights Agreement dated as of July 15,
1994 (the "RIGHTS AGREEMENT"), between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "RIGHTS AGENT").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (an "ACQUIRING PERSON"), has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding Common Stock
(the "STOCK ACQUISITION DATE") and (ii) 10 days following commencement or
disclosure of an intention to commence a tender offer or exchange offer by a
person other than the Company and certain related entities if, upon consummation
of the offer, such person or group, together with persons affiliated or
associated with it, could acquire beneficial ownership of 30% or more of the
outstanding Common Stock (the earlier of such dates being called "DISTRIBUTION
DATE"). Until the Distribution Date (or earlier redemption or expiration of the
Rights), the transfer of Common Stock will also constitute transfer of the
associated Rights. Following the Distribution Date, separate certificates will
evidence the Rights.
The Rights will first become exercisable on the Distribution Date (unless
sooner redeemed). The Rights will expire at the close of business on August 5,
2004 (the "EXPIRATION DATE"), unless earlier redeemed by the Company as
described below.
The Purchase Price and the number of shares of Preferred Stock or other
securities, cash or other 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 or distribution on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights, options, warrants to subscribe for Preferred
Stock or securities convertible into Preferred Stock at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of other securities, cash (excluding regular periodic
cash dividends at an annual rate not in excess of
C - 1
<PAGE>
125% of the annualized rate of cash dividends paid during the preceding fiscal
year), property, evidences of indebtedness, or assets.
In the event that, following the Distribution Date, the Company is acquired
in a merger or other business combination in which the Common Stock does not
remain outstanding or is changed or 50% or more of its consolidated assets or
earning power is sold, leased, exchanged, mortgaged, pledged or otherwise
transferred or disposed of (in one transaction or a series of transactions) the
Rights will "FLIP-OVER" and entitle each holder of a Right to purchase, upon the
exercise of the Right at the then-current Purchase Price, that number of shares
of common stock of the acquiring company (or, in certain circumstances, one of
its affiliates) which at the time of such transaction would have a market value
of two times the Purchase Price.
If (i) a person acquires beneficial ownership of 15% or more of the Common
Stock, (ii) the Company is the surviving corporation in a merger with an
Acquiring Person and the Common Stock remains outstanding and unchanged, or
(iii) an Acquiring Person engages in a "SELF-DEALING" transaction specified in
the Rights Agreement, the Rights will "FLIP-IN" and entitle each holder of a
Right, except as provided below, to purchase, upon exercise at the then-current
Purchase Price, that number of shares of Common Stock having a market value of
two times the Purchase Price. Any of these events is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the earlier of the
Distribution Date and the Stock Acquisition Date by an Acquiring Person or an
affiliate or associate of an Acquiring Person (whether or not such ownership is
subsequently transferred) will become null and void upon the occurrence of a
Triggering Event, and any holder of such Rights will have no right to exercise
such Rights.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Holders will have no right to receive fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock) upon the exercise of Rights. In lieu
of such fractional shares, an adjustment in cash may be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise, or the Company may issue scrip, warrants or depositary receipts.
The number of outstanding Rights and the number of one one-hundredths of a
share of Preferred Stock issuable upon exercise of each Right and the Purchase
Price are also subject to adjustment in the event of a stock split of the Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
At any time prior to the earlier of (i) the time that the Board of
Directors of the Company becomes aware that Acquiring Person has become such
(with the possibility for the Board of Directors to extend this time for an
additional 20 days) and (ii) the Expiration Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right. Immediately
upon the action of the Company's Board of Directors electing to redeem the
C - 2
<PAGE>
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights thereafter will be to receive the applicable redemption
price.
Until a Right is exercised, the holder has no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
At any time prior to the time that the Company's Board of Directors becomes
aware that an Acquiring Person has become such, the Company may, without the
approval of any holder of the Rights, supplement or amend any provision of the
Rights Agreement (including the date on which the Distribution Date will occur),
except the Purchase Price, the number of shares of Preferred Stock, other
securities, cash or other property obtainable upon exercise of a Right, the
redemption price or the Expiration Date. Thereafter, the Rights Agreement may
be amended only to cure ambiguities, to correct inconsistent provisions, or in
ways that do not adversely affect the Rights holders.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $25.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of Common
Stock if it is greater. In the event of liquidation, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100.00 per share, but will be entitled to an aggregate payment of 100 times
the payment made per share of Common Stock if it is greater. In the event of
any merger or other business combination in which Common Stock is exchanged,
each share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-hundredth of a share of Preferred Stock
purchasable upon exercise of each Right is intended to approximate the value of
one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned upon a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors prior to the time a person or group has
acquired beneficial ownership of 15% or more of the Common Stock, because, until
such time, the Rights may be redeemed by the Company at $.01 per Right.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission and 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 hereby
incorporated herein by reference.
C - 3
