SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 18, 1999
AMERICAN LOCKER GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 0-439 16-0338330
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number Identification No.)
incorporation)
608 ALLEN STREET, JAMESTOWN, NEW YORK 14701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 716-664-9600
(Former name or former address, if changed since last report.)
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Item 5. Other Events
On November 18, 1999, the Board of Directors of American Locker Group
Incorporated (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $1.00
(the "Common Shares"), of the Company. The dividend is payable to stockholders
of record at the close of business on November 29, 1999 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock (the
"Preferred Shares") of the Company at a price of $40.00 per one one-hundredth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person"), has acquired
beneficial ownership of 20% or more of the outstanding Common Shares or (ii) 10
business days (or such later date as may be determined by the Board) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding Common Shares
(the earlier of such dates being the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of the Summary
of Rights attached thereto. The Rights Plan includes certain exceptions from the
definitions of Acquiring Person and beneficial ownership to take into account
the existing ownership of Common Shares by members of the Ruttenberg family.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until after the Distribution Date. The
Rights will expire on the close of business on November 18, 2009 (the "Final
Expiration Date"), unless the final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.
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The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidence of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $.40 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $40 per share but will be entitled
to an aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that any person becomes an Acquiring Person, each holder of a
Right (other than Rights owned by Acquiring Person) will have the right to
receive, upon exercise of the Right, such number of Common Shares determined by
(A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a right is now exercisable and
dividing that product by (B) 50% of the current market price of the Common
Shares.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of
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the Right. In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-hundredth of a Preferred Share, per Right.
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. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the time when Person becomes an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis with such conditions
as the Board of Directors of the Company in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person or group of affiliated or associated persons
becomes an Acquiring Person, no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights Agreement, dated as of November 18, 1999, between the Company
and ChaseMellon Shareholder Services, L.L.C. as Rights Agent, specifying the
terms of the Rights and including the form of Certificate of Designations,
Preferences and Rights setting forth the terms of the Preferred Shares is filed
as an exhibit hereto and is incorporated herein by reference. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibit.
Item 7. Exhibits
1. Rights Agreement, dated as of November 18, 1999, between American
Locker Group Incorporated and ChaseMellon Shareholder Services, L.L.C.
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Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized
American Locker Group Incorporated
NOVEMBER 18, 1998
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(Date) /s/EDWARD F. RUTTENBERG
---------------------------------------------
Edward F. Ruttenberg
Chairman and Chief Executive Officer
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INDEX
Exhibit Prior Filing or
Sequential Page
No. Herein:
1. Rights Agreement dated as of
November 18, 1999 between American
Locker Group Incorporated and
ChaseMellon Shareholder Services, L.L.C.
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AMERICAN LOCKER GROUP INCORPORATED
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
RIGHTS AGENT
--------------------
RIGHTS AGREEMENT
--------------------
DATED AS OF NOVEMBER 18, 1999
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TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS...................................................... 1
Section 2. APPOINTMENT OF RIGHTS AGENT...................................... 6
Section 3. ISSUE OF RIGHT CERTIFICATES...................................... 7
Section 4. FORM OF RIGHT CERTIFICATES....................................... 9
Section 5. COUNTERSIGNATURE AND REGISTRATION................................ 10
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES..................................... 11
Section 7. EXERCISE OF RIGHTS: PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.... 12
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES............... 14
Section 9. AVAILABILITY OF PREFERRED SHARES................................. 14
Section 10. PREFERRED SHARES RECORD DATE.................................... 15
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS................................................ 16
Section 12. CERTIFICATE OF ADJUSTMENTS...................................... 26
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER ........................................ 26
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................ 28
Section 15. RIGHTS OF ACTION................................................ 30
Section 16. AGREEMENT OF RIGHT HOLDERS...................................... 30
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER............... 31
Section 18. CONCERNING THE RIGHTS AGENT..................................... 31
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT....... 33
Section 20. DUTIES OF RIGHTS AGENT.......................................... 34
Section 21. CHANGE OF RIGHTS AGENT.......................................... 38
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.............................. 39
Section 23. REDEMPTION..................................................... 39
Section 24. EXCHANGE........................................................ 40
Section 25. NOTICE OF CERTAIN EVENTS........................................ 43
Section 26. NOTICES......................................................... 44
Section 27. SUPPLEMENTS AND AMENDMENTS...................................... 45
Section 28. SUCCESSORS...................................................... 45
Section 29. BENEFITS OF THIS RIGHTS AGREEMENT............................... 45
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Section 30. SEVERABILITY.................................................... 46
Section 31. GOVERNING LAW................................................... 46
Section 32. COUNTERPARTS.................................................... 46
Section 33. DESCRIPTIVE HEADINGS............................................ 47
Signatures ................................................................ 45
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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Agreement, dated as of November 18, 1999, between AMERICAN LOCKER
GROUP INCORPORATED , a Delaware corporation (the "Company"), and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability company (the
"Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
of the Company outstanding on November 29, 1999 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred Share upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. DEFINITIONS. For purposes of this Rights 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 20% or more of the Common Shares of the Company then outstanding, but shall
not include the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares of the Company by the Company which, by reducing
the number
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of shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares, then such Person shall be
deemed to be an "Acquiring Person." Notwithstanding the foregoing, if the Board
of Directors of the Company determines in its sole discretion and good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this Section 1(a), has become such inadvertently
and with or without knowledge of the existence of this Agreement, and such
Person divests as promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this Rights
Agreement. In addition, notwithstanding the foregoing definition, the Estate of
Harold J. Ruttenberg and its executors, and the beneficiaries and distributees
under the terms of the Last Will and Testament of Harold J. Ruttenberg or
trust(s) created thereunder, shall not be deemed to be Acquiring Persons as a
result of beneficial ownership of Common Shares beneficially owned by or
distributed by such Estate.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any Securities:
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(i) that such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) that such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of Securities), upon the exercise of conversion rights, exchange
rights, rights (other than these 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 of
such Person's Affiliates or Associates until such tendered Securities are
accepted for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
Security if the agreement, arrangement or understanding to vote such
Security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between
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underwriters and selling group members with respect to a bona fide public
offering of Securities) for the purpose of holding, acquiring, voting
(except to the extent contemplated by the provisos to Section l(c)(ii)) or
disposing of any Securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, (i) the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of Securities of the Company, shall mean the
number of such Securities then issued and outstanding together with the number
of such Securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder; and (ii) Katherine M. Ruttenberg
shall not be deemed to be the beneficial owner of any Common Stock owned by her
descendents.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the Commonwealth of Pennsylvania or
the State of New York or the city in which the office of the Rights Agent is
located are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $1.00 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or
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equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person that ultimately
controls such first-mentioned Person.
(g) "Company" shall have the meaning set forth in the preamble hereof.
(h) "Current per share market price" shall have the meaning set forth
in Section 11(d).
(i) "Distribution Date" shall have the meaning set forth in Section 3.
(j) "Equivalent preferred shares" shall have the meaning set forth in
Section 11(b).
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Exchange Ratio" shall have the meaning set forth in Section
24(a).
(m) "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
(n) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(o) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company having
the rights and preferences set forth in the form of Certificate of Designations
attached to this Rights Agreement as Exhibit A.
(p) "Purchase Price" shall have the meaning set forth in Section 4.
(q) "Record Date" shall have the meaning set forth in the second
paragraph hereof.
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(r) "Redemption Date" shall have the meaning set forth in Section
7(a).
(s) "Redemption Price" shall have the meaning set forth in Section
23(a).
(t) "Right" shall have the meaning set forth in the second paragraph
hereof.
(u) "Right Certificate" shall have the meaning set forth in Section
3(a).
(v) "Rights Agent" shall have the meaning set forth in the preamble
hereof.
(w) "Security" shall have the meaning set forth in Section 3(a)(10) of
the Exchange Act.
(x) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(y) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(z) "Summary of Rights" shall have the meaning set forth in Section
3(b).
(aa) "Trading Day" shall have the meaning set forth in Section 11(d).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
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Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the Shares Acquisition Date or (ii) the tenth business day (or such later date
as may be determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person). after the date of the commencement or
the announcement of an intention to commence by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner
of Common Shares of the Company aggregating 20% or more of the then outstanding
Common Shares (including any such date which is after the date of this Rights
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b)) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date at the address of such holder shown on the records of the
Company a Right Certificate, in substantially the form of Exhibit B hereto,
evidencing one Right for each Common Share so held (a "Right Certificate"). As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
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(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this Section 3(c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between American
Locker Group Incorporated and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, dated as of November 18, 1999, as amended
from time to time (as so amended, the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of American Locker
Group 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.
American Locker Group Incorporated will mail to the holder of this
certificate a copy of the Rights
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Agreement without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) may become null and void and will no
longer be transferable.
With respect to the certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with Common Shares that are no
longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as 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, which do
not affect the duties or responsibilities of the Rights Agent and as are not
inconsistent with the provisions of this Rights Agreement or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Rights may from time to time be listed or to
conform to usage. Subject to the provisions of Section 22, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred
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Share set forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates nevertheless may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this Rights Agreement any such
person was not such an officer.
Following the Distribution Date and receipt by the Rights Agent of all
necessary information, the Rights Agent will keep or cause to be kept, at its
office, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
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Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. 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 the
Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become
void pursuant to Section 11(a)(ii) or that have been exchanged pursuant to
Section 24) may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such taxes and/or charges have
been paid.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto
and upon surrender to the Rights Agent and cancellation of the Right Certificate
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if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS: PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly and properly executed, to the Rights Agent at the office of the Rights
Agent, together with payment of the Purchase Price for each one one-hundredth of
a Preferred Share as to which Rights are being exercised, at or prior to the
earliest of (i) the Close of Business on November 18, 2009 (the "Final
Expiration Date"), (ii) the time at which the Rights are to be redeemed as
provided in Section 23 (the "Redemption Date"), or (iii) the time at which such
Rights are to be exchanged as provided in Section 24.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $40.00, shall
be subject to adjustment from time to time as provided in Section 11 or 13, and
shall be payable in lawful money of the United States of America in accordance
with Section 7 (c).
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly and properly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable tax or charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 by certified
check, cashier's check or money order payable to the order of the Company, the
Rights
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Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby authorizes such transfer agent to comply with
all such requests or (B) requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14, (iii) promptly 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 Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to
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purchase set forth on the reverse side of the Rights Certificate surrendered for
such transfer or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the
Company or the Rights Agent shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
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 Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company or shall, at the written request
of the Company, destroy such cancelled Right Certificates and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
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The Company further covenants and agrees that it will pay when due and
payable any and all transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of any Preferred Shares
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or charge which may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or any issuance or delivery of
certificates or depositary receipts for Preferred Shares in a name other than
that of, the registered holder of the Right Certificate evidencing the Rights
surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of any Rights until
any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax or charge is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares is issued upon an exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable taxes or charges) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Share 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 Share transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of the Preferred Shares for which such Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other
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distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF Rights. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the date
of this Rights Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification and the number and kind of
shares of capital stock issuable on such date shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Share transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
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(ii) Subject to Section 24, in the event that any Person becomes
an Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Rights
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (A) multiplying the then-current
Purchase Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and dividing that product by (B) 50% of the
current per share market price of the Common Shares (determined pursuant to
Section 11(d)) on the date of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be null and void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Rights Agreement. No Right Certificate shall be issued
pursuant to Section 3 to represent Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof whose Rights have become null and
void pursuant to the preceding sentence; no Right Certificate shall be issued at
any time for the transfer of any Rights to an Acquiring Person or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate as such Rights would be null and void pursuant to the preceding
sentence; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person shall be canceled.
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(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be issuable upon exercise
of a Right, a number of Preferred Shares or fraction thereof such that the
product of the current per share market price of one Preferred Share multiplied
by such number or fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred Shares or fraction
thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or Securities convertible into or exchangeable for Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion or exchange price per share, if a
Security convertible into or exchangeable for Preferred Shares or equivalent
preferred shares) less than the then-current per share market price of the
Preferred Shares on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares
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outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion or exchange price of the convertible or exchangeable Securities so to
be offered) would purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into or for which the
convertible or exchangeable Securities so to be offered are initially
convertible or exchangeable); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such 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 the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for making a
distribution to all holders of the Preferred Shares (including any such
distribution to be made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of assets or evidences
of indebtedness (other than a regular quarterly cash dividend or a dividend
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payable in Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b)), 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 then-current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share, and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any Security on any date shall be deemed to be the
average of the daily closing prices per share or other unit of such Security for
the 30 consecutive Trading Days immediately prior to but not including such
date; provided, however, that in the event that the current per share market
price of a Security is to be determined for any date during a period that
follows the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares or other units of such Security
or Securities convertible into or exchangeable for such shares or other units of
such Security, or (B) any subdivision, combination
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or reclassification of such Security and does not end prior to the expiration of
30 Trading Days after but not including the ex-dividend date for such dividend
or distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect such dividend, distribution,
subdivision, combination or reclassification. The closing price of a Security
for any Trading Day shall be the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if on any
such Trading Day such Security is not reported by any such system, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such Security selected by the Board of Directors of the
Company. The term "Trading Day" for any Security shall mean a Business Day.
(ii) For the purpose of any computation hereunder, the current
per share market price of the Preferred Shares shall be determined in accordance
with the method set forth in Section 11(d)(i) if possible. If the Preferred
Shares are not publicly traded, the current per share market price of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i) multiplied
by one hundred (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof). If neither the
Common Shares nor the Preferred Shares are publicly held or listed or traded,
current per share market price shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
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determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) 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(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other Security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares, then the
number of such other shares 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 Preferred Shares
contained in Section 11(a) through (c) inclusive, and the provisions of Sections
7, 9, 10 and 13 with respect to the Preferred Shares shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised the option provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of any
calculation made pursuant to Section 11(b) or (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-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (A) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment by (B) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made with prompt notice thereof to the
Rights Agent. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if Right Certificates
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have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates 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
Right Certificates held by such holders prior to the date of adjustment and,
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares 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 Preferred Shares at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer, with prompt notice thereof to
the Rights Agent, until the occurrence of such event, issuing to the holder of
any Right exercised after such record date the Preferred Shares and other
Securities of the Company, if any, issuable upon such exercise over and above
the Preferred Shares and other Securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares or Securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares or issuance
wholly for cash of Preferred Shares or Securities which by their terms are
convertible into or exchangeable for Preferred Shares, of dividends on Preferred
Shares payable in Preferred Shares or of rights, options or warrants referred to
in Section 11(b) hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Rights
Agreement and prior to the Distribution Date, the Company shall (i) pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
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Shares) into a greater or lesser number of Common Shares, then in any such case
(A) the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is paid or such a subdivision, combination or
consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTMENTS. Whenever an adjustment is made
as provided in Section 11 or 13, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts and
computations accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Shares or the Preferred Shares a copy of
such certificate, and (c) mail such certificate or a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING Power. In the event that, directly or indirectly, at any time after a
Person has become an
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Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall consolidate with the Company or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such transaction,
all or part of the Common Shares shall be changed into or exchanged for stock or
other Securities of any other Person (or the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any Person other than
the Company or one or more of its wholly owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon exercise thereof at a price equal to the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Rights
Agreement and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as the successor or surviving corporation)
as shall equal the result obtained by (A) multiplying the then-current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a Right
is then exercisable and dividing that product by (B) 50% of the current per
share market price of the Common Shares of such other Person (determined
pursuant to Section 11(d)) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter
be liable for and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such
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steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon exercise of the Rights. The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers, consolidations, sales
and other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to any registered holder of a Right Certificate with
regard to which a fractional Right would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights on the Trading Day immediately prior to
the date on which fractional Rights would otherwise have been issuable
(determined in accordance with Section 11(d)(i)). If for any such date no
closing price of the Rights can be determined, the current market value of a
whole Right
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shall be its fair value on such date as determined in good faith by the Board of
Directors of the Company.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement 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 Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to any registered holder of a Right Certificate at the time
Rights represented thereby are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred Share.
For purposes of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share on the Trading Day
immediately prior to the date of such exercise (determined in accordance with
Section 11(d)(i)).
(c) The holder of a Right by the acceptance of such Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
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Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement, excepting the rights of action given to the Rights Agent under
this Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of Common Shares), may, in his own behalf and for his own
benefit, enforce and may institute and maintain any suit, action or proceeding
against the Company to enforce or otherwise act in respect of his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights 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 Rights
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, Rights will be transferable only
in connection with the transfer of the applicable Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
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(c) the Company and the Rights Agent may deem and treat the Person in
whose name a Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on any Right Certificate or the associated Common Share certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other Securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company,
including any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof or to give or withhold consent
to any corporate action or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25) or to receive
dividends or subscription rights or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
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, preparation, delivery, amendment and execution of
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this Rights 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, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense incurred without gross negligence, bad faith
or willful misconduct as determined by a court of competent jurisdiction on the
part of the Rights Agent for any action taken, suffered or omitted by the Rights
Agent in connection with the acceptance and administration of this Rights
Agreement, including without limitation the costs and expenses of defending
against any claim of liability in the premises. The indemnity provided herein
shall survive the termination of this Agreement and the termination and the
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent.
The Rights Agent shall be authorized and 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 Rights Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other Securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where
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necessary, verified or acknowledged by the proper person or persons or otherwise
in reliance upon the advice of counsel as set forth in Section 20.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; provided,
that such Person 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 Rights Agreement any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been
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countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes only
the duties and obligations expressly imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right 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 advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) The Rights Agent shall not be deemed to have knowledge of any fact
or matter pertaining to the performance of its duties under this Rights
Agreement, except such facts or matters as are evidenced by records which it
receives in accordance with this Agreement and/or to the extent it shall have
been advised thereof in writing by the Company or by a holder of Rights.
Whenever in the performance of its duties under this Rights Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter (including
without limitation, the identity of any Acquiring Person and the determination
of correct per share market price) be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the
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Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct
as determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible or liable for
any breach by the Company of any covenant or condition contained in this Rights
Agreement or in any Right Certificate; nor shall it be responsible or liable for
any change in the exercisability of the Rights (including any Rights becoming
void pursuant to Section 11(a)(ii)) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11,
13, 23 or 24 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 Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be
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deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any Preferred Shares will,
when issued, be validly authorized and issued and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, 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
the Rights Agent shall not be liable for any action taken, suffered or omitted
by it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Corporation may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken, suffered
or omitted by the Rights Agent under this Agreement and the date on and/or after
which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of the
Corporation actually receives such application unless any such officer shall
have
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consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
Securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss resulting from any such act, default, neglect or
misconduct, absent gross negligence, bad faith or willful misconduct, as
determined by a court of competent jurisdiction in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election
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to purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate or
Associate 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 Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail and to the holders of the Right Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon 30
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 Shares or Preferred
Shares by registered or certified mail and to the holders of the Right
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 giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(which holder shall, with such notice, submit such holder's Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate or the Rights Agent may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a Person authorized to do
business under applicable laws and is subject to supervision or examination by
federal or state authority and which has at the time of its
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appointment as Rights Agent a combined capital and surplus of at least $35
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as the Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares or Preferred Shares and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein 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 RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other Securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Rights Agreement.
Section 23. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all of the outstanding Rights at a price of
$.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
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(such redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights, the Company shall mail a notice of redemption to
the Rights Agent and to all holders of the outstanding Rights 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 Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not any particular holder receives notice. Each such
notice of redemption will state the method by which payment of the Redemption
Price will be made. 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 or in Section 24 and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. EXCHANGE. (a) The Board of Directors of the Company may,
at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include any Rights that have become null
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and void pursuant to the provisions of Section 11(a)(ii)) for Common Shares at
an exchange ratio of one Common Share per Right (the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights will terminate and the only right thereafter of the holders
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange with prompt
notice thereof to the Rights Agent; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such
exchange. The Company promptly shall mail notice of such exchange to all holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not any particular holder receives notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which
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have become null and void pursuant to the provisions of Section 11(a)(ii)) held
by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit an exchange of
Rights in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for each Common Share
that would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or equivalent preferred shares or fraction thereof such that the product
of the current per share market price of one Preferred Share or equivalent
preferred share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or equivalent preferred shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares in
an exchange. In lieu of such fractional Common Shares, the Company shall pay to
any registered holder of a Right Certificate with regard to which a fractional
Common Share would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Common Share. For purposes of
this paragraph (d), the current market value of a whole Common Share shall be
the closing price of a Common Share on the Trading Day immediately prior to the
date of exchange pursuant to this Section 24 (determined in accordance with
Section 11(d)(i)).
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Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any other class
or any other Securities, (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries, taken as a whole, to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right Certificate and the Rights
Agent, in accordance with Section 26, a notice of such proposed action, which
shall specify (x) the record date for the purposes of such stock dividend or
distribution of rights or warrants or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and (y) the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
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(b) In case the event set forth in Section 11(a)(ii) shall occur, then
the Company shall as soon as practicable thereafter give to each holder of a
Right Certificate and the Rights Agent, in accordance with Section 26, a notice
of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under said Section 11(a)(ii).
Section 26. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of any Right
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:
American Locker Group Incorporated
608 Allen Street
Jamestown, New York 14702
Attention: Chairman
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of any
Right 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:
ChaseMellon Shareholder Services, L.L.C.
One Mellon Bank Center
21st Floor, Room 2122
Pittsburgh, Pennsylvania 15258-0001
Attention: Cindy Pacolay
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent
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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 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Rights Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions with respect to
the Rights which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such time as any Person
becomes an Acquiring Person this Rights Agreement shall not be amended in any
manner which would adversely affect the interests of the holders of Rights.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Rights Agreement to extend
the Final Expiration Date or change the Purchase Price hereunder. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the term
of this Section 27, and such supplement or amendment does not increase the
Rights Agent's duties, liabilities or obligations, the Rights Agent shall
execute such supplement or amendment.
Section 28. SUCCESSORS. All the covenants and provisions of this
Rights 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 29. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent
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and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. GOVERNING LAW. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
Section 32. COUNTERPARTS. This Rights 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.
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Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-47-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and attested all as of the day and year first
above written.
AMERICAN LOCKER GROUP INCORPORATED
Attest:
By: /s/ CHARLES E. HARRIS By: /s/ EDWARD F. RUTTENBERG
------------------------------- ------------------------------
Charles E. Harris Edward F. Ruttenberg
Title: Secretary Title: Chairman and Chief
Executive Officer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.,
Attest: as Rights Agent
By: /s/ CINDY PACOLAY
------------------------------ ------------------------------------
Cindy Pacolay
Title: (Assistant) Vice President Title: Assistant Vice President
-48-
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
AMERICAN LOCKER GROUP INCORPORATED
(Pursuant to Section 151 of the
Delaware General Corporation Law)
American Locker Group Incorporated, a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by Section 151
of the General Corporation Law at a meeting duly called and held on November 18,
1999.
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $1.00 (the "Preferred Stock"), of the Corporation and hereby
states the designation and number of shares and fixes the relative rights,
preferences, and limitations thereof as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 200,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion or exchange of any outstanding securities issued by the
Corporation convertible into or exchangeable for shares of Series A Preferred
Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock
A-1
<PAGE>
with respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of shares of Common Stock, par value
$1.00 per share (the "Common Stock"), of the Corporation 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 first day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $.40 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 declare or pay any dividend on the 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 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
$.40 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, 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
A-2
<PAGE>
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 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 declare or pay
any dividend on the 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, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law,
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 the 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:
A-3
<PAGE>
(i) declare or pay dividends or make any other distributions
on any shares of stock ranking junior (as to dividends) to the Series
A Preferred Stock;
(ii) declare or pay dividends or make any other
distributions on any shares of stock ranking on a parity (as to
dividends) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable and in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem, 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) redeem, 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 and unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or otherwise required
by law.
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
(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 $40 per share, plus an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment;
A-4
<PAGE>
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 shares of Common Stock, or (2)
to the holders of shares of stock ranking on a parity (upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the 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
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 each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into 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 declare or pay any dividend on
the 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 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.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all other
series of the Preferred Stock.
Section 10. AMENDMENT. The 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 shares of Series A
Preferred Stock so as to affect them
A-5
<PAGE>
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Series A Preferred Stock, voting together as a single
class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this 18th day of November, 1999.
Attest: AMERICAN LOCKER GROUP INCORPORATED
/s/ CHARLES E. HARRIS /s/ EDWARD F. RUTTENBERG
- ---------------------------------- --------------------------------------
Charles E. Harris Edward F. Ruttenberg
Title: Secretary Title: Chairman and Chief Executive
Officer
A-6
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER NOVEMBER 18, 2009 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
AMERICAN LOCKER GROUP 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 November 18, 1999, as amended from time to
time (as so amended, the "Rights Agreement"), between American Locker Group
Incorporated, a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., New Jersey, a limited liability company as Rights
Agent (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., Eastern time, on November 18, 2009 at the office of the Rights Agent,
or at the office of its successor as Rights Agent, one one-hundredth of a fully
paid non-assessable share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Shares"), of the Company, at a purchase
price of $40.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of November 29,
1999, based on the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one one-hundredths of
a Preferred Share which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights
B-1
<PAGE>
Agreement are on file at the principal executive offices of the Company and the
office of the Rights Agent.
Subject to the provisions of the Rights Agreement, this Right
Certificate, with or without other Right Certificates, upon surrender at the
office of the Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of Preferred Shares as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $0.01 per Right or (ii) may be exchanged in whole or in part for shares
of the Company's Common Stock, par value $1.00 per share, or Preferred Shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company, including any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-2
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of .
-------------------------
AMERICAN LOCKER GROUP INCORPORATED
ATTEST:
By
- ------------------------------------- ------------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By
-----------------------------------
Authorized Signature
B-3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer this Right Certificate.)
FOR VALUE RECEIVED hereby
------------------------------------------
sells, assigns and transfers unto
--------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ________________, as his
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
-------------------------------
------------------------------
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.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
- --------------------------------------------------------------------------------
B-4
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by this Right Certificate.)
To: AMERICAN LOCKER GROUP INCORPORATED
The undersigned hereby irrevocably elects to exercise
- ------------------
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining 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:
--------------------
---------------------------
Signature
B-5
<PAGE>
Form of Reverse Side of Right Certificate - continued
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.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
------
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right 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 or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent 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 such
Assignment or Election to Purchase will not be honored.
B-6
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On November 18, 1999, the Board of Directors of American Locker Group
Incorporated (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $1.00
per share (the "Common Shares"), of the Company. The dividend is payable on
November 29, 1999 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company at a price of $40.00
per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated or associated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached thereto. The Rights Agreement provides that
the Estate of Harold J. Ruttenberg and its executors, and the beneficiaries and
distributees under the terms of the Last Will and Testament of Harold J.
Ruttenberg or trust(s) created thereunder, shall not be deemed to be Acquiring
Persons as a result of beneficial ownership of Common Shares beneficially owned
by or distributed by such Estate.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the Close of Business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
C-1
<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 18, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable and the number of Preferred Shares or other
securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into or exchangeable for Preferred Shares with a
conversion or exchange price, less than the then-current market price of the
Preferred Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $.40 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $40.00 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Rights, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market value
of two times the exercise price of the Rights. In the event that any person or
group of affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be null and
C-2
<PAGE>
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Rights.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become null and void), in whole or in part, at an exchange ratio of one Common
Share or one one-hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges) per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that from
and after such time as any Person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
November 18, 1999. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
C-3
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