<PAGE> 1
As filed with the Securities and Exchange Commission on June 1, 1999
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 12, 1999
------------
The Carbide/Graphite Group, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-20490 25-1575609
- ---------------------------- ----------- -------------------
(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number Identification No.)
One Gateway Center, 19th Floor, Pittsburgh, PA 15222
- ---------------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (412) 562-3700
--------------
================================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS.
On May 12, 1999, the Board of Directors of The Carbide/Graphite Group,
Inc. (the "Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is payable on June 1, 1999
(the "Record Date") to the stockholders of record at the opening of business on
that date. Each Right entitles the registered holder, under certain
circumstances, to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, par value $.01 per share (each
whole share being a "Preferred Share"), of the Company at a price of $60.00 per
each one one-thousandth 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 State Street Bank and
Trust Company, 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") have acquired beneficial ownership of 25% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by the Board of Directors) 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 25% 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.
The Rights Agreement provides that, until the Distribution Date, 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 the later of the Distribution Date
or the date on which the Company's right to redeem the Rights expires. The
Rights will expire on May 20, 2009 (the "Final Expiration Date"), 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 Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness 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).
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<PAGE> 3
The number of outstanding Rights and the number of one one-thousandths
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 or a consolidation or combination 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, when issued, will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 1000 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 $1000 per share but will be
entitled to an aggregate payment of 1000 times the payment made per Common
Share. Each Preferred Share will have 1000 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 1000 times the amount received per Common Share. These
rights are protected by customary anti-dilution provisions.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired by any other person in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provision will 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 the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the entity acquiring the Company or its assets having
a market value of two times the exercise price of 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. If the number of Common Shares available for
issuance is not sufficient to permit the exercise in full of the Rights, the
Company will issue securities, cash, debt or other assets having an economic
value equivalent to the economic value of the Rights or will reduce the purchase
price.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group owns 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-thousandth 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
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth 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 time after a person or group 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 $.001 per Right (the "Redemption
Price"). The Board may redeem the Rights (i) within ten days after any person
becomes an Acquiring Person if such person, during the ten day period, notifies
the Board that the stock
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<PAGE> 4
acquisition was inadvertent and at the time of redemption such person no longer
owns 25% or more of the outstanding Common Stock or (ii) at such later date as
the Board determines, provided that the Board makes its determination within ten
days after any person becomes an Acquiring Person. The redemption of the Rights
may be made effective at such time on such basis 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.
Until the Rights become exercisable the terms of the Rights Agreement
may be amended or supplemented without the approval of any holders of the
Rights. Following the Distribution Date, the Company can amend the Rights
Agreement only to cure an ambiguity, to correct or supplement a provision of the
Rights Agreement which may be defective or inconsistent with other provisions of
the Rights Agreement or to change or supplement the provisions of the Rights
Agreement in a manner not adverse to the holders of the Rights (other than an
Acquiring Person).
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 as an Exhibit hereto.
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.
ITEM 7. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
1.0 Rights Agreement, dated as of May 21, 1999, between The
Carbide/Graphite Group, Inc. and State Street Bank and
Trust Company.
2.0 Form of Right Certificate (included with Exhibit 1).
3.0 Form of Certificate of Designation for Series A Junior
Participating Preferred Stock (included with Exhibit 1).
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<PAGE> 5
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
THE CARBIDE/GRAPHITE GROUP, INC.
Dated: June 1, 1999 By: /s/ WALTER B. FOWLER
-------------------------------------
Walter B. Fowler
President and Chief Executive Officer
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Exhibit 1.0
================================================================================
THE CARBIDE/GRAPHITE GROUP, INC.
AND
STATE STREET BANK AND TRUST COMPANY
RIGHTS AGREEMENT
DATED AS OF MAY 21, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Certain Definitions....................................................................................1
SECTION 2. Appointment of Rights Agent............................................................................5
SECTION 3. Issue of Right Certificates............................................................................5
SECTION 4. Form of Right Certificates.............................................................................7
SECTION 5. Countersignature and Registration......................................................................8
SECTION 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates........................................................8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..........................................9
SECTION 8. Cancellation and Destruction of Right Certificates....................................................11
SECTION 9. Reservation and Availability of Preferred Shares......................................................11
SECTION 10. Preferred Shares Record Date..........................................................................12
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of Rights....................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares............................................21
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..................................21
SECTION 14. Fractional Rights and Fractional Shares...............................................................24
SECTION 15. Rights of Action......................................................................................25
SECTION 16. Agreement of Right Holders............................................................................26
SECTION 17. Right Certificate Holder Not Deemed a Stockholder.....................................................26
SECTION 18. Concerning the Rights Agent...........................................................................27
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.............................................27
SECTION 20. Duties of Rights Agent................................................................................28
SECTION 21. Change of Rights Agent................................................................................30
SECTION 22. Issuance of New Right Certificates....................................................................30
SECTION 23. Redemption and Termination............................................................................31
SECTION 24. Exchange..............................................................................................32
SECTION 25. Notice of Certain Events..............................................................................33
SECTION 26. Notices...............................................................................................34
SECTION 27. Supplements and Amendments............................................................................35
SECTION 28. Successors............................................................................................35
SECTION 29. Determinations and Actions by the Board of Directors..................................................35
SECTION 30. Benefits of this Agreement............................................................................35
SECTION 31. Severability..........................................................................................36
SECTION 32. Governing Law.........................................................................................36
SECTION 33. Counterparts..........................................................................................36
SECTION 34. Descriptive Headings..................................................................................36
EXHIBIT A - Certificate of Designation of Series A Junior Participating Preferred Stock
EXHIBIT B - Form of Right Certificate
EXHIBIT C - Summary of Rights
</TABLE>
<PAGE> 3
RIGHTS AGREEMENT
Rights Agreement, dated as of May 21, 1999 (as the same may be modified,
amended, supplemented and/or restated from time to time, this "Agreement"),
between The Carbide/Graphite Group, Inc., a Delaware corporation (the
"Company"), and State Street Bank and Trust Company, a Massachusetts Trust
Company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one Right for each share of Common Stock of the Company
outstanding as of the Opening of Business (as such terms are hereinafter
defined) on June 1, 1999 (the "Record Date"), and has further authorized (i) the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Opening of Business on the Record Date and the
earliest of the Distribution Date (as such term is defined in Section 3), the
Redemption Date, the Exchange Date and the Final Expiration Date (as such terms
are defined in Section 7) and (ii) in certain circumstances provided in Section
22, the issuance of one Right with respect to each share of Common Stock that
shall become outstanding between the Distribution Date and the earliest of the
Redemption Date, the Exchange Date and the Final Expiration Date, each Right
initially representing the right to purchase one one-thousandth of a share of a
Preferred Share (as such term is hereinafter defined), upon the terms and
subject to the conditions herein set forth (the "Rights").
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, and intending to be legally bound hereby, the parties hereby
agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 25% or more of the shares of Common Stock then outstanding,
but shall not include any Exempt Person (as each term is hereinafter defined).
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of beneficial ownership of shares of Common Stock
by the Company that, by reducing the number of shares of Common Stock (or
securities convertible into or exchangeable for shares of Common Stock)
outstanding, increases the percentage of shares of Common Stock beneficially
owned by such Person (together with all Affiliates and Associates of such
Person) to 25% or more of the shares of Common Stock then outstanding; provided,
however, that if any Person (other than Exempt Persons) (together with all
Affiliates and Associates of such Person) shall become the Beneficial Owner of
25% or more of the shares of Common Stock 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 shares of Common Stock of the
Company, then such Person shall be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person" as defined pursuant
to the first sentence of this paragraph (a), has become such inadvertently, and
such Person divests as
<PAGE> 4
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not, solely
as a result of such inadvertent acquisition, be deemed to be an "Acquiring
Person" for any purpose of this Agreement.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as such rule is in effect on the Record Date.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own," and shall be deemed to have "beneficial
ownership" of, any securities:
(i) that such Person, or any of such Person's
Affiliates or Associates, directly or indirectly 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 (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own (1) 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, (2) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or (3)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, if such Rights were acquired by such Person or such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any of the Rights heretofore specified in this
clause (3); or
(B) the right to vote or otherwise has
"beneficial ownership" (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, pursuant to this subparagraph (B), any security as a result of
any agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (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 of the Exchange Act and (2) is not also then reportable on Schedule
13D or Schedule 13G under the Exchange Act (or any comparable or successor
report); or
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(ii) that are beneficially owned, including pursuant
to subparagraphs (i)(A) and (B) of this subsection (d), directly or
indirectly, by any other Person (or Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in the provision in subparagraph
(i)(B) of this subsection (d)) or disposing of any securities of the
Company;
provided, however, that nothing in this subsection (d) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of Common Stock, par value $0.01 per share, of the
Company. "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest
voting power of such Person or, if such Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such first-mentioned
Person.
(h) "Current Value" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Distribution Date" shall have the meaning set forth in
Section 3.
(j) "Exchange Date" shall have the meaning set forth in
Section 7(a).
(k) "Exchange Shares" shall have the meaning set forth in
Section 24(a).
(l) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company or (iv) any entity holding shares of Common Stock
for or pursuant to the terms of any such plan.
(m) "Final Expiration Date" shall have the meaning set forth
in Section 7(a).
(n) "NASDAQ" shall have the meaning set forth in Section
11(d)(i).
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(o) "Opening of Business" on any given date shall mean 9:00
A.M., New York City time, on such date; provided, however, that if such date is
not a Business Day, it shall mean the Close of Business on the immediately
preceding Business Day.
(p) "Person" shall mean any individual, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(q) "Preferred Share" shall mean the Series A Junior
Participating Preferred Stock of the Company, par value $0.01 per share, having
the relative rights, preferences and limitations set forth in the form of
Certificate of Designation attached to this Agreement as Exhibit A.
(r) "Principal Party" shall have the meaning set forth in
Section 13(b).
(s) "Purchase Price" shall have the meaning set forth Section
4(a).
(t) "Redemption Date" shall have the meaning set forth in
Section 7(a).
(u) "Redemption Price" shall have the meaning set forth in
Section 23(a).
(v) "Section 11(a)(ii) Event" shall mean the event described
in Section 11(a)(ii).
(w) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(x) "Securities Act" shall have the meaning set forth in
Section 9(c).
(y) "Spread" shall have the meaning set forth in Section
11(a)(iii).
(z) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such.
(aa) "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.
(bb) "Surviving Corporation" shall have the meaning set forth
in Section 11(q).
(cc) "Trading Day" shall have the meaning set forth in Section
11(d)(i).
(dd) "Triggering Event" shall mean any Section 11(a)(ii) Event
or Section 13 Event.
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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 upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent. In the event
the Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
SECTION 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date or (ii)
the Close of Business on the tenth Business Day (or such later date as the Board
of Directors shall determine) after the date of the commencement by any Person
(other than an Exempt Person) of, or the first public announcement of the
intention of any Person (other than an Exempt Person) to commence (which
intention to commence remains in effect for three Business Days after such
announcement) a tender or exchange offer, the consummation of which would result
in any Person becoming an Acquiring Person (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights) (the
earlier of (i) and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraphs (b)
and (c) of this Section 3) by the certificates for shares of Common Stock
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 shares of Common Stock. The Company shall give the Rights
Agent written notice of the Distribution Date as promptly as practicable
thereafter. As soon as practicable after the Distribution Date and receipt of
written notice of the Distribution Date from the Company, the Rights Agent will,
at the expense of the Company, send by first-class, insured, postage-prepaid
mail, to each record holder of shares of Common Stock as of the Close of
Business on the Distribution Date, or, with respect to shares of Common Stock so
issued on or after the Distribution Date (unless otherwise provided with respect
thereto as aforesaid), to the record holder of such shares of Common Stock on
the date of issuance, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B, evidencing
one Right for each share of Common Stock so held, subject to adjustments as
provided herein. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11(i) hereof, at the
time of distribution of the Right Certificates, the Company may make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of shares of
5
<PAGE> 8
Common Stock as of the Opening of Business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for shares of Common Stock outstanding as of the Opening of Business on the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for shares of Common Stock registered in the names of the holders
thereof (together with a copy of the Summary of Rights attached thereto). Until
the earlier of the Distribution Date, the Redemption Date, the Exchange Date or
the Final Expiration Date, the surrender for transfer of any certificate for
shares of Common Stock outstanding on the Opening of Business 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 shares of Common
Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or delivered from the
Company's treasury) after the Opening of Business on the Record Date but prior
to the earlier of the Distribution Date, the Redemption Date, the Exchange Date
or the Final Expiration Date; provided, however, that Rights may be issued with
respect to shares of Common Stock that become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date, the Exchange Date and the
Final Expiration Date in accordance with Section 22 of this Agreement.
Certificates for shares of Common Stock issued after the Opening of Business on
the Record Date but prior to the earlier of the Distribution Date or the Final
Expiration Date (including, without limitation, reacquired shares of Common
Stock referred to in the last sentence of this paragraph (c)) 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 THE
CARBIDE/GRAPHITE GROUP, INC. (THE "COMPANY")
AND STATE STREET BANK AND TRUST COMPANY, AS
RIGHTS AGENT, DATED AS OF MAY 21, 1999 (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 THE COMPANY. 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.
THE COMPANY WILL MAIL TO THE HOLDER OF THIS
CERTIFICATE A COPY OF THE RIGHTS AGREEMENT,
AS IN EFFECT ON THE DATE OF MAILING, WITHOUT
CHARGE PROMPTLY FOLLOWING RECEIPT OF A
WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR ASSOCIATES OR
AFFILIATES OF ACQUIRING PERSONS (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
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<PAGE> 9
With respect to such certificates bearing the foregoing legend, until the
Distribution Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
with or without the foregoing legend, and registered holders of shares of Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates, with or without the foregoing legend,
shall also constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificates. In the event that the Company
purchases or acquires any shares of Common Stock after the Opening of Business
on the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Common Stock which are no longer outstanding.
SECTION 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit B and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or any national securities association on whose
interdealer quotation system the Rights may from time to time be authorized for
quotation, or to conform to usage. The Right Certificates shall be in a machine
printable format and in a form reasonably satisfactory to the Rights Agent.
Subject to the provisions of Section 22, the Right Certificates that are issued
in respect of shares of Common Stock that were issued and outstanding as of the
Opening of Business on the Record Date shall be dated as of the Record Date, and
all Right Certificates that are issued in respect of other shares of Common
Stock shall be dated as of the respective dates of issuance of such shares of
Common Stock, and in either case on their faces shall entitle the holders
thereof to purchase such number of one-thousandths of a Preferred Share as shall
be set forth therein at the price per one one-thousandth of a Preferred Share
set forth therein (the "Purchase Price"), but the number and type of securities
purchasable upon exercise of each Right and the Purchase Price shall be subject
to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or
Section 22 that represents Rights which are null and void pursuant to Section
7(e) of this Agreement, and any Right Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY ARE NULL AND VOID.
7
<PAGE> 10
The absence of the foregoing legend on any Right Certificate shall in
no way affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, 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 so 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 the execution of this Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at the office of the Rights Agent designated for such
purposes, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights as evidenced on the face
of each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and 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 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-thousandths of a Preferred Share (or other securities or other assets,
as the case may be) 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 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, with the form of assignment and certificate appropriately executed,
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or
8
<PAGE> 11
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
11 and Section 14, 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 by the holder of a Right Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, 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 if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a))
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 executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price with
respect to the total number of one one-thousandths of a Preferred Share (or
other securities, cash or other assets, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on May 20, 2009 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof (the
"Exchange Date").
(b) The Purchase Price for each one one-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be $60.0,
subject to adjustment from time to time as provided in Sections 11 and 13, and
shall be payable in lawful money of the United States of America, subject to
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares (or other
securities or other assets, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 6 hereof, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent for such shares
(or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Preferred Shares to be purchased,
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of Preferred
9
<PAGE> 12
Shares issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of one one-thousandths of Preferred Shares 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 depository agent) and the
Company hereby directs the depository 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 interests in shares in accordance with Section
14, (iii) after receipt of such certificates or depository receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificates registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii))
may be made in cash or by certified or bank check or money order payable to the
order of the Company. In the event the Company is obligated to issue other
securities (including shares of Common Stock) of the Company or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities or property are available
for distribution by the Rights Agent, if and when appropriate.
(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 and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(e) Notwithstanding anything to the contrary in this
Agreement, from and after the first occurrence of any Triggering Event, any
Rights beneficially owned by (i) any Acquiring Person (or any Associate or
Affiliate of an Acquiring Person), (ii) a transferee of an Acquiring Person (or
any Associate or Affiliate of an Acquiring Person) which becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) to holders of equity interests in such Acquiring Person (or of
such Associate or Affiliate) or to any Person with whom the Acquiring Person has
any agreement, arrangement or understanding regarding the transferred Rights, or
(B) a transfer that the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or such Section 4(b)
with respect to any Acquiring Person or an Associate or Affiliate of an
Acquiring Person or their transferees.
10
<PAGE> 13
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported transfer or exercise unless such registered holder shall have (i)
completed and signed the certificate following the form of assignment or
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such assignment or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company.
SECTION 9. Reservation and Availability of Preferred Shares. (a) 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 pursuant to
the terms of this Agreement; and, after the occurrence of a Triggering Event,
shall to the extent reasonably practicable so reserve and keep available a
sufficient number of shares of Common Stock (and/or other securities) which may
be required to permit the exercise in full of the Rights pursuant to this
Agreement.
(b) So long as the Preferred Shares (or Common Shares and/or
other securities, as the case may be) issuable upon the exercise of Rights may
be listed on any national securities exchange or authorized for quotation on any
interdealer quotation system of any national securities association, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on such
exchange or quoted on such system upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as is practicable following the earliest date after the first occurrence of
a Triggering Event, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities pursuant
11
<PAGE> 14
to Section 11(a)(ii), (B) the Redemption Date or (C) the Final Expiration Date.
The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the exercise thereof shall not be permitted under applicable
law.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that, subject to
Section 6 and Section 7(c), it will pay when due and payable any and all federal
and state transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares of Common Stock
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depository receipts for the shares of Common Stock in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates or
depository receipts for the shares of Common Stock upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares (or Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such Preferred Shares (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate, as such, shall not be entitled to any rights of a stockholder
of the Company with respect to the shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
12
<PAGE> 15
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of securities covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the 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) and Section 7(e), 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 that, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares (or Common Stock and/or other
securities, as the case may be) transfer books of the Company were open, such
holder 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 securities of the
Company issuable upon the exercise thereof. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) In the event any Person, at any time after the date of
this Agreement, is or becomes an Acquiring Person, unless the event causing a
Person to become an Acquiring Person is (A) a transaction set forth in Section
13(a) hereof or (B) an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by the Board of Directors to be in the best
interests of the Company and its shareholders, then proper provision shall be
made so that each holder of a Right, except as provided in Section 7(e), shall,
after the period set forth in Section 23(a), have a right to receive, upon
exercise thereof at the then current Purchase Price, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of shares
of Common Stock as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one (1) one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of the Section 11(a)(ii) Event and (y) dividing that product by 50%
of the current per share market price of the shares of Common Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of the Section
11(a)(ii) Event (such number of shares is herein called the "Adjustment
Shares"); provided, however, that the Purchase Price and number of Adjustment
Shares shall be further adjusted as provided in this Agreement to reflect any
event occurring after the date of such first occurrence.
13
<PAGE> 16
For example, if at the time a Person becomes an Acquiring
Person, (1) the Purchase Price is $60, (2) a Right is exercisable for one (1)
one-thousandth of a Preferred Share and (3) the current per share market price
of a share of Common Stock is $10, then each holder of a Right, except as
provided in Section 7(e), shall, after the period set forth in Section 23(a),
have a right to receive, upon exercise thereof at the Purchase Price of $60, 12
shares of Common Stock as illustrated below:
<TABLE>
<S> <C> <C> <C>
(number of one (1) one-thousandths of a Preferred
(Purchase Price = 60) x Share for which the Right is exercisable =1) = 60 = 12
- ------------------------------------------------------------------------------- --------
50% x (current per share market price = 10) 5
</TABLE>
(iii) In the event that, after the date of the occurrence of
such a Section 11(a)(ii) Event, the number of shares of Common Stock which is
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights, the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares in accordance
with Section 11(a)(ii) issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares upon exercise of the Rights, (1) cash, (2) a reduction in
the Purchase Price, (3) shares of Common Stock of the same or different class or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of common stock which the Board of Directors of the Company
has deemed to have substantially the same economic value as shares of Common
Stock (such shares or units of shares of Common Stock are referred to herein as
"common stock equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing having an aggregate value equal
to the Current Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a) Event and (y)
the date on which the Company's right of redemption pursuant to Section 23(a)
expires, then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the 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 as Preferred Shares ("equivalent preferred
shares"), or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Shares or equivalent preferred shares,
or having a conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares, less than the current per share
14
<PAGE> 17
market price of Preferred Shares (as determined pursuant to Section 11(d)) 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 one one-thousandths of Preferred Shares outstanding on such record
date plus the number of one one-thousandths of Preferred Shares which the
aggregate offering price of the total number of one one-thousandths of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of one one-thousandths of Preferred Shares outstanding on such record
date plus the number of additional one one-thousandths of Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon the 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 binding on the Rights Agent and the holders of Rights. 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 or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price that would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash or
assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company or a dividend 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 current per share market
price of a Preferred Share (as determined pursuant to Section 11(d)) 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 and shall be binding on the Rights Agent
and the holders of the Rights) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to a Preferred Share and the denominator of which shall be such
current per share market price of a Preferred Share (as determined pursuant to
Section 11(d)) 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 the 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 that would then be in
effect if such record date had not been fixed.
15
<PAGE> 18
(d) (i) For the purpose of any computation hereunder (other
than computations made pursuant to Section 11(a)(iii) hereof), the "current per
share market price" of the shares of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such shares of Common
Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market price" of
shares of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such shares of Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current per share market price of the shares of
Common Stock is determined during a period following the announcement by the
issuer of such shares of Common Stock of (1) a dividend or distribution on such
shares of Common Stock payable in such shares of Common Stock or securities
convertible into such shares of Common Stock (other than the Rights), or (2) any
subdivision, combination or reclassification of such shares of Common Stock, and
prior to the expiration of thirty (30) Trading Days, or ten (10) Trading Days,
as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the shares of Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the shares of
Common Stock, the fair value of the shares of Common Stock on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the shares of Common Stock are not publicly held or not so
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 determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
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<PAGE> 19
(ii) For the purpose of any computation hereunder,
the "current per share market price" of one one-thousandth of a Preferred Share
shall be determined in accordance with the method set forth in Section 11(d)(i).
If fractions of Preferred Shares are not publicly traded, the "current per share
market price" of one one-thousandth of a Preferred Share shall be conclusively
deemed to be the current per share market price of a Common Share as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof). If
neither the Common Shares nor fractions of a Preferred Share are publicly held
or so 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
Corporation, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments that 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-thousandth of a Preferred Share or
one ten-thousandth of any other security. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
the Preferred Shares, thereafter 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 shares contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of the Preferred Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one
17
<PAGE> 20
one-thousandths of a Preferred Share (calculated to the nearest thousandth)
obtained by (i) multiplying (x) the number of one one-thousandths of a Preferred
Share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-thousandth 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-thousandth of a Preferred Share which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (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 Rights 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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of 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-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share that were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-thousandths of a Preferred Share, shares of Common Stock or other
securities issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
securities at such adjusted Purchase Price.
18
<PAGE> 21
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares, Common Stock or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Shares, Common Stock or other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the current market price, (iii)
issuance wholly for cash of Preferred Shares or other securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into or engage in a share exchange with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger, share
exchange or sale there are any rights, warrants, or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger, share exchange or sale, the stockholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this Section
11(n).
19
<PAGE> 22
(o) The Company covenants and agrees that, after the
Distribution Date, it shall not, except as permitted by Section 23, Section 24
or Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) In the event that at any time, after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on its shares of Common Stock payable in its shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of its shares
of Common Stock (by reclassification or otherwise than by payment of dividends
in its shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in any such case (A) the number of one one-thousandths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-thousandths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number shares
of Common Stock outstanding immediately after such event, and (B) each share of
Common Stock outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common Stock outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11 (p) shall be made successively whenever such a
dividend is declared or paid of such a subdivision, combination or consolidation
is effected.
(q) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date consolidate with, or merge
with or into, any other Person for the primary purpose of a change of domicile
of the Company, and, in connection with such consolidation or merger, all of the
outstanding shares of Common Stock shall be changed into or exchanged for shares
of Common Stock of the surviving corporation of such consolidation or merger
(the "Surviving Corporation"), then proper provision shall be made so that
Rights shall be associated with each share of Common Stock of the Surviving
Corporation, except as provided in Section 7(e) hereof, such that the number of
Rights associated with each share of Common Stock of the Surviving Corporation
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock of the Surviving Corporation which the shares of Common Stock were changed
into or exchanged for pursuant to the consolidation or merger. Following such a
consolidation or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be references to the Surviving
Corporation.
20
<PAGE> 23
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the shares of Common
Stock a copy of such certificate and (c) mail a brief summary thereof to each
holder of record of a Right Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25. The Rights Agent shall be fully protected in relying
on such certificate and on any adjustment contained therein, and shall not be
obligated or responsible for calculating any adjustment, nor shall it be deemed
to have knowledge of any adjustment unless and until it shall have received such
certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case (except as may
be contemplated by Section 13(e) hereof), proper provision shall be made so
that:
(i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price, in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such
number of validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of call, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such first occurrence of a Section
21
<PAGE> 24
11(a)(ii) Event) and (2) dividing that product by 50% of the current
per share market price of the shares of Common Stock of such Principal
Party (determined pursuant to Section 11(d)) on the date of
consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party;
(iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be,
in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.
If, in the case of a transaction of the kind described in clause (z) of the
first sentence of this Section 13(a), the Person or Persons to whom assets or
earning power are sold or otherwise transferred are individuals, then the
preceding sentences of this Section 13(a) shall be inapplicable, and the Company
shall require as a condition to such sale or transfer that such Person or
Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights Agent and in exchange therefor (without requiring payment by such
holder), cash in the amount determined by multiplying the then current Purchase
Price by the number of shares of one one-thousandths of a Preferred Share for
which a Right is then exercisable.
For example, if at the time any of the events described in
clause (x), (y) or (z) of the first sentence of Section 13(a) occurs, (1) the
Purchase Price is $60, (2) a Right is exercisable for one (1) one-thousandth of
a Preferred Share and (3) the current per share market price of a share of
common stock of the Principal Party is $10, then each holder of a Right, except
as provided in Section 7(e), shall have a right to receive, upon exercise
thereof at the Purchase Price of $60, 12 shares of common stock of the Principal
Party as illustrated below:
<TABLE>
<S> <C> <C> <C>
(number of one (1) one-thousandths of a Preferred
(Purchase Price = 60) x Share for which the Right is exercisable =1) = 60 = 12
- ------------------------------------------------------------------------------- ------
50% x (current per share market price = 10) 5
</TABLE>
22
<PAGE> 25
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities for or into which shares of Common
Stock of the Company are converted in such share exchange, merger or
consolidation, and if no securities are so issued, the Person that is
the other party to such merger or consolidation;
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; and
(iii) provided, however, that in any such case, (1)
if the shares of Common Stock of such Person are not at such time and
have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the shares of Common
Stock of which are and have been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the shares
of Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the shares of Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of Common Stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will:
(i) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdiction as may be necessary or
appropriate; and
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
23
<PAGE> 26
(d) The provisions of this Section 13 shall similarly apply to
successive share exchanges, mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur at any time after
the first occurrence of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(e) Notwithstanding anything in this Agreement to the
contrary, the provisions of this Section 13 shall not be applicable to a
transaction described in clause (x) or (y) of the first sentence of Section
13(a) if (i) such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a tender or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by the
Board of Directors to be in the best interests of the Company and its
shareholders (or a wholly-owned subsidiary of any such Person or Persons), (ii)
the price per share of Common Stock offered in such transaction is not less than
the price per share of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender or exchange offer and
(iii) the form of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section 13(e), all
Rights hereunder shall expire.
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
24
<PAGE> 27
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are one one-thousandth or integral
multiples of one one-thousandth of a Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence fractional Preferred Shares
(other than fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-thousandth 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 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 one one-thousandth
or integral multiples of one one-thousandth of a Preferred Share, the Company
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash as determined in good
faith by the Board of Directors of the Corporation.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive shares of
Common Stock, capital stock equivalents (other than Preferred Shares) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of such shares of Common Stock, capital stock equivalents or
other securities upon exercise of the Rights or to distribute certificates which
evidence fractions of such shares of Common Stock, Capital Stock equivalents or
other securities. In lieu of fractional shares or units of such shares of Common
Stock, capital stock equivalents or other securities, the Company may pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of share or unit of such shares of Common Stock, capital stock
equivalents or other securities. For purposes of this Section 14 (c), the
current market value shall be determined in the manner set forth in Section 11
(d) hereof for the Trading Day immediately prior to the date of such exercise
and, if such capital stock equivalent is not traded, each such capital stock
equivalent shall have the value of one one-thousandth of a Preferred Share.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided above).
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the shares of Common Stock), 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
25
<PAGE> 28
such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this 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, the Rights will be
transferable only in connection with the transfer of the shares of Common Stock;
(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 designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to Section 7(e), shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company that 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 or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give
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<PAGE> 29
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. (a) The Company agrees to pay
to the Rights Agent such compensation as shall be agreed upon between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability arising therefrom. The provisions of this Section
18(a) shall survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for shares of Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed by the proper Person or Persons and, where necessary, to be
verified or acknowledged.
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to all or
substantially all the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and 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 Agreement.
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<PAGE> 30
(b) 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
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 Agreement.
SECTION 20. Duties of Rights Agent. (a) The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of the Rights Certificates, by their acceptance thereof, shall be bound. Before
the Rights Agent acts or refrains from acting, the Rights Agent may consult with
legal counsel of its selection (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity or existence of any
Acquiring Person and the determination of "current per share market price") be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the board, the
president, any vice president, the secretary, an assistant secretary or the
treasurer of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
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 responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the
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<PAGE> 31
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 deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of Common
Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable, nor shall the Rights Agent be responsible for the legality of the
terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the chairman of the board, the president, any vice president, the
secretary or the treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions.
(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 peculiarly interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents (other than employees), and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
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<PAGE> 32
(k) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached hereto unless the Rights Agent
shall have actual knowledge that, as executed, such certification is untrue, or
(ii) the non-execution of such certification including, without limitation, any
refusal to honor any otherwise permissible assignment or election by reason of
such non-execution.
(l) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership known to the Company which would prohibit the
exercise or transfer of the Right Certificates.
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 60 days' notice in writing mailed to the Company and to each transfer agent
of the shares of Common Stock by registered or certified 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 shares of Common Stock by registered or
certified 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 (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Rights Agent or the holder of record of any Right Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or any state of the United States so long as such corporation is
authorized to do business as a banking institution, is in good standing, is
authorized under such laws to exercise corporate trust powers, and is subject to
supervision or examination by federal or state authority, and has at the time of
its appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice with the predecessor
Rights Agent and each transfer agent of the shares of Common Stock, and mail a
notice thereof in writing to the holders of record 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.
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SECTION 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price 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 Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
to the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. Redemption and Termination. (a) The Board of Directors of
the Company may, at its option, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.001 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following the
Stock Acquisition Date (or such later date as may be determined by the Board of
Directors; provided, that this date shall not be extended at such time as the
Rights are not then redeemable) or (ii) the Final Expiration Date.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) In the case of a redemption permitted under Section 23
(a), immediately upon the date for redemption set forth (or determined in the
manner specified in) in a resolution of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right so
held. The Corporation 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 ten (10) days after
such date for redemption set forth in a resolution of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then 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 Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the
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<PAGE> 34
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
and other than in connection with the purchase of Common Stock prior to the
Distribution Date.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent of the Common Stock, and upon such action, all outstanding Rights
and Right Certificates shall be null and void without any further action by the
Company.
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 Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock, each Right being exchangeable for one share
of Common Stock, appropriately adjusted to reflect any transaction specified in
Section 11(p) occurring after the date hereof (such number of shares of Common
Stock issuable in exchange for one Right being referred to herein as the
"Exchange Shares"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than any Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive the Exchange Shares. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock 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 have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding, or authorized but unissued, to permit
any exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to
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authorize additional shares of Common Stock 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 fraction
thereof such that the current per share market price of such securities 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.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection (d),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second and third
sentences of Section 11(d) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its shares of Common Stock or to
make any other distribution to the holders of its shares of Common Stock (other
than a regular quarterly cash dividend) or (ii) to offer to the holders of its
shares of Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
shares of Common Stock (other than a reclassification involving only the
subdivision of outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one 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 Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions, each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action that shall specify 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 the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock, whichever shall be the earlier.
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(b) In case a Triggering Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) or Section 13.
(c) The failure to give notice required by this Section 25 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote on any such action.
SECTION 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by registered
or certified mail and shall be given upon receipt, addressed (until another
address is filed in writing with the Company), or by facsimile with confirmation
of receipt (until another facsimile number is filed in writing with the
Company), as follows:
THE CARBIDE/GRAPHITE GROUP, INC.
One Gateway Center, 19th Floor
Pittsburgh, PA 15222
Attention: William Thalman
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sent by registered or certified
mail and shall be given upon receipt, addressed (until another address is filed
in writing with the Company), or by facsimile with confirmation of receipt
(until another facsimile number is filed in writing with the Company), as
follows:
STATE STREET BANK AND TRUST COMPANY
c/o Equiserve Limited Partnership
150 Royall St.
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
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SECTION 27. Supplements and Amendments. Prior to the Distribution Date,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Stock. From and after the
Distribution Date, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or (iii) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). Upon delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment, provided that such amendment or supplement does
not adversely affect the rights or obligations of the Rights Agent under Section
18 or Section 20 of this Agreement.
SECTION 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. Determinations and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem, not
redeem, exchange or not exchange the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and (y) not subject the Board to any
liability to the holders of the Rights.
SECTION 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the shares of Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock).
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SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language of this Agreement would adversely affect the purpose or effect
of this Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement, each Right 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 the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
SECTION 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
THE CARBIDE/GRAPHITE GROUP, INC.
By: /s/ WALTER B. FOWLER
-----------------------------------
Name: Walter B. Fowler
Title: President
Attest:
By: /s/ ROGER MULVIHILL
-------------------
Secretary
STATE STREET BANK AND TRUST
COMPANY, as Rights Agent
By: /s/ STEPHEN CESSO
-----------------------------------
Name: Stephen Cesso
Title: Vice President and Associate
Counsel
Attest:
By: /s/ TYLER HAYNES
----------------
Secretary
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Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
THE CARBIDE/GRAPHITE GROUP, INC.
(Pursuant to Section 151 of the Delaware General Corporation Law)
The Carbide/Graphite Group, Inc., 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 of the State of Delaware at a meeting duly called and
held on May 12, 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 of the Corporation, the Board of Directors hereby creates a
series of Preferred Stock of the Corporation, par value $0.01 per share (the
"Preferred Stock"), and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
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 10,000. 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 of
any outstanding securities issued by the Corporation convertible into 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 with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the holders of
Common Stock, par value $0.01 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,
<PAGE> 41
quarterly dividends payable in cash on the first day of February, May,
August and November 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) $1 or (b)
subject to the provision for adjustment set forth herein, 1000 times
the aggregate per share amount of all cash dividends, and 1000 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 $1 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 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
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<PAGE> 42
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 set forth herein, each
share of Series A Preferred Stock shall entitle the holder thereof to
1000 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 Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock
-3-
<PAGE> 43
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) 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 or in arrears in proportion
to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or 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 canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
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 as 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 (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment set forth herein, equal to 1000 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 (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A
-4-
<PAGE> 44
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
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case 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 set
forth herein, equal to 1000 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 series
of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. This Certificate of Designation and any terms or
provisions hereof may be amended at any time by the Board of Directors of the
Corporation.
-5-
<PAGE> 45
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its Chief Executive Officer and attested by its
Secretary this ___th day of [____ __, 1999].
By:
------------------------------
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<PAGE> 46
Exhibit B
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER MAY 20, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
THE CARBIDE/GRAPHITE GROUP, INC.
This certifies that ___________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 21, 1999 (the "Rights Agreement"), between The
Carbide/Graphite Group, Inc., a Delaware corporation (the "Company"), and State
Street Bank and Trust Company (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., New York time, on May 20, 2009 at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one one-thousandth of a fully paid non-assessable share of Series
A Junior Participating Preferred Stock of the Company, par value $0.01 per share
(the "Preferred Shares"), at a purchase price of $60.0 per one one-thousandth 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-thousandths 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 June 1, 1999. As provided in the Rights Agreement, the
Purchase Price and the number of one one-thousandths 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
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full
<PAGE> 47
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 Agreement are on file at the principal
executive offices of the Company and the offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal 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 Right Certificate (i) may be redeemed by the Company at a redemption
price of $0.001 per Right or (ii) may be exchanged, in whole or in part, for
Preferred Shares or shares of the Company's Common Stock, par value $0.01 per
share.
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-thousandth 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 on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
<PAGE> 48
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of [__, 1999].
THE CARBIDE/GRAPHITE GROUP, INC.
By:
------------------------------
Name:
Title:
Countersigned:
STATE STREET BANK AND TRUST
COMPANY, Rights Agent
By:
-----------------------------
Name:
Title:
<PAGE> 49
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates)
FOR VALUE RECEIVED
-----------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
---------------------- ---------
---------------------------------
Signature
- --------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate (cross out one of the following) [is] [is
not] being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned (cross out one of the following) [did] [did not] acquire the Rights
evidenced by this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person.
Dated: ,
---------------------- ---------
---------------------------------
Signature
<PAGE> 50
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
- --------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: The Carbide/Graphite Group, Inc.
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Right Certificate to purchase the number of shares of
one one-thousandths of a share of Preferred Stock or, if applicable, Common
Stock (or fractions thereof), issuable upon the exercise of such Rights (or such
other securities of the Company or of any other person which may be issuable
upon exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
(Please insert social security or other identifying number)
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 print name and address)
- --------------------------------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ,
---------------------- ---------
---------------------------------
Signature
- --------------------------------------------------------------------------------
<PAGE> 51
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) Rights evidenced by this Rights Certificate (cross out one of the
following) [are] [are not] being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned (cross out one of the following) [did ] [did not] acquire the Rights
evidenced by this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person.
Dated: ,
---------------------- ---------
---------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
The signatures in the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
- --------------------------------------------------------------------------------
WARNING
In the event the Certificate set forth above in the Assignment and Election to
Purchase is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate of such Acquiring Person (as defined in the Rights
Agreement), and such Assignment or Election to Purchase will not be honored.
<PAGE> 52
Exhibit C
THE CARBIDE/GRAPHITE GROUP, INC.
(the "Company")
Rights Agreement, dated as of May 21, 1999
Summary of Rights
ISSUANCE The Rights are being distributed as a dividend on each share
of Common Stock of the Company outstanding at the opening of
business on June 1, 1999.
PURCHASE PRICE Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Stock") at a price of $60 per
Right (the "Purchase Price"), subject to adjustment.
EXERCISABILITY The Rights detach and become exercisable upon the earlier of:
(1) ten days after the first public announcement that
a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial
ownership of 25% or more of the Company's outstanding
Common Stock (the "Stock Acquisition Date"), or
(2) ten business days (or a later date as is
determined by the Board in accordance with the Rights
Agreement) after the commencement of, or an
announcement of an intention to commence, a tender
offer or exchange offer that would result in a person
or group beneficially owning 25% or more of the
Company's outstanding Common Stock (the earlier of
(1) and (2) being herein referred to as the
"Distribution Date").
TRANSFERABILITY The Rights are not detachable and not separately transferable
from the Company's Common Stock until they become exercisable.
<PAGE> 53
"FLIP-IN" TRIGGERING EVENTS If any person becomes an Acquiring Person by
acquiring beneficial ownership of ____25% or
more of the Company's Common Stock, each
outstanding Right will "flip in" and become
a right to buy at the Purchase Price that
number of shares of Common Stock of the
Company that will have a market value of two
times the Purchase Price. Notwithstanding
the foregoing, all Rights that are
beneficially owned by any Acquiring Person
(and its affiliates and associates) will be
null and void upon the occurrence of a
Flip-In Triggering Event.
"FLIP-OVER" TRIGGERING EVENTS If (1) the Company is acquired in a merger
or other business combination transaction
and the Company does not survive or the
Company merges, consolidates or engages in a
share exchange with any other person and
does survive but all or part of its stock is
changed, or (2) 50% or more of the Company's
assets or earning power is sold or
transferred to any person, then each
outstanding Right will "flip over" and
become a right to buy at the Purchase Price
that number of shares of Common Stock of the
entity acquiring the Company or its assets
equal to a market value of two times the
Purchase Price.
REDEMPTION The Board of Directors may redeem the Rights
in whole, but not in part, at a price of
$.001 per Right at any time prior to the
tenth business day following the Stock
Acquisition Date (or such later date as may
be determined by the Board of Directors).
EXCHANGE OPTION After a person becomes an Acquiring Person
(but before any person or group owns 50% or
more of the outstanding Common Stock), the
Company may permit the Rights (other than
those owned by an Acquiring Person) to be
exchanged, in whole or in part, without
payment of the Purchase Price, for one share
of Common Stock per Right. The aggregate
dilutive effect on an Acquiring Person upon
exchange of the Rights is somewhat less than
the dilutive effect of a normal exercise of
the Rights.
AMENDMENT Until the Rights become exercisable the
terms of the Rights Agreement may be amended
or supplemented without the approval of any
holders of the Rights. Following the
<PAGE> 54
Distribution Date, the Company can amend the
Rights Agreement to cure an ambiguity, to
correct or supplement a provision of the
Rights Agreement which may be defective or
inconsistent with other provisions of the
Rights Agreement or to change or supplement
the provisions of the Rights Agreement in a
manner not adverse to the holders of the
Rights (other than an Acquiring Person).
VOTING The Rights have no voting power.
DIVIDENDS The Rights have no rights to dividends.
TERM Ten years.
MISCELLANEOUS The Rights Agreement provides that the
Company may not enter into any transactions,
agreements or arrangements intended to
counteract the protective provisions of the
Rights.
* * *
Dated: May 21, 1999
