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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):
December 27, 1999 (December 27, 1999)
GLEN BURNIE BANCORP
- ------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 0-24047 52-1782444
- ---------------------------- ----------- -----------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
101 CRAIN HIGHWAY, S.E., GLEN BURNIE, MARYLAND 21227
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410)766-3300
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
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Effective December 27, 1999, the Registrant amended its
Articles of Incorporation to reduce the par value of its common
stock from $10 per share to $1 per share and to increase its
authorized shares of common stock from 5,000,000 to 15,000,000.
In accordance with recent changes to Maryland General
Corporation Law, the foregoing amendments were adopted by the
Board of Directors without stockholder approval.
Effective December 27, 1999, the Board of Directors also
amended the Registrant's Stockholder Rights Plan to reflect the
change in par value, to eliminate certain unnecessary exemptions
from the definition of Acquiring Person and to make certain
other changes. Pursuant to the Second Amendment, dated as of
December 27, 1999 (the "Second Amendment"), to that certain
Rights Agreement, dated as of February 13, 1998, by and between
the Registrant and The Bank of Glen Burnie, as Rights Agent (the
"Rights Agreement"), the Rights issued thereunder will not be
redeemable or exchangeable and the Rights Agreement may not be
supplemented or amended for a period of 180 days following a
change in the majority of the Board of Directors if the
exchange, redemption or amendment is reasonably likely to have
the purpose or effect of facilitating a Transaction (defined as
a merger, consolidation or sale of assets or any acquisition of
common stock that would result in a person becoming an Acquiring
Person) with an Interested Person (defined a person or group
who (i) is or will become an Acquiring Person if such
Transaction were to be consummated, and (ii) is, or directly or
indirectly proposed, nominated or financially supported, a
director of the Registrant in office at the time of
consideration of such Transaction who was elected at the annual
or special meeting of stockholders at which the change in the
majority of directors occurred). All other provisions of the
Rights Agreement, as amended, continue in full force and effect
as set forth therein and were not affected in any way by the
Second Amendment. The foregoing description of the Rights
Agreement does not purport to be complete and is qualified in
its entirety by reference to the Second Amendment and the Rights
Agreement, as amended. All terms not otherwise defined herein
shall have the meanings given them in the Rights Agreement, as
amended.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
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(a) Financial Statements of Businesses Acquired. None
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(b) Pro Forma Financial Information. None
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(c) Exhibits. The following exhibits are filed as part of
-------- this report on Form 8-K:
EXHIBIT NO. DESCRIPTION
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3.4 Articles of Amendment, dated as of
December 27, 1999.
4.3 Second Amendment, dated as of
December 27, 1999, to the Rights
Agreement, dated as of February 13,
1998, by and between Glen Burnie
Bancorp and The Bank of Glen Burnie,
as Rights Agent.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
GLEN BURNIE BANCORP
Date: December 27, 1999 By: /s/ F. William Kuethe, Jr.
------------------------------
F. William Kuethe, Jr.
President
3
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GLEN BURNIE BANCORP
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Glen Burnie Bancorp (hereinafter "The Corporation"), a
corporation organized and existing under the General Corporation
Law of the State of Maryland ("MGCL"), hereby certifies to the
Department of Assessments and Taxation of the State of Maryland
that:
I. Article Five of The Corporation's Articles of
Incorporation is hereby amended to read as follows:
ARTICLE FIVE: The total number of shares of
------------
capital stock which The Corporation has authority to
issue is fifteen million (15,000,000) with a par value
of One Dollar ($1.00) per share. The total par value
of the shares shall be Fifteen Million Dollars
($15,000,000).
II. The foregoing amendment to The Corporation's Articles
of Incorporation was approved by a majority of the entire
Board of Directors of The Corporation; and
III. The foregoing amendment is limited to changes
expressly authorized by Section 2-105(a)(12) and Section
2-605 of the MGCL to be made without action by the
stockholders.
IV. In accordance with Section 2-607(b)(1) of the MGCL,
the following information is presented:
(i) The total number of shares of stock of all
classes which The Corporation has authority to issue:
IMMEDIATELY BEFORE
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THE AMENDMENT AS AMENDED
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5,000,000 15,000,000
(ii) The number of shares of stock of each class:
IMMEDIATELY BEFORE
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CLASS THE AMENDMENT AS AMENDED
----- ------------- ----------
Common Stock 5,000,000 15,000,000
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(iii) The par value of the shares of stock of each
class:
IMMEDIATELY BEFORE
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CLASS THE AMENDMENT AS AMENDED
----- ------------- ----------
Common Stock $10.00 $1.00
(iv) The aggregate par value of all shares of all
classes:
IMMEDIATELY BEFORE
THE AMENDMENT AS AMENDED
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$50,000,000 $15,000,000
IN WITNESS WHEREOF, Glen Burnie Bancorp has caused these
presents to be signed in its name and on its behalf by its
President and Chief Executive Officer and witnessed by its
Secretary, and the undersigned officers acknowledge that these
Articles of Amendment are the act of The Corporation, that to
the best of their knowledge, information and belief all matters
and facts set forth herein relating to the authorization and
approval of these Articles of Amendment are true in all
material respects, and that this statement is made under the
penalties of perjury.
Date: December 27, 1999 /s/ F. William Kuethe, Jr.
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F. William Kuethe, Jr.
President
ATTEST:
/s/ Dorothy A. Abel
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Dorothy A. Abel
Secretary
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SECOND AMENDMENT TO RIGHTS AGREEMENT
SECOND AMENDMENT, dated as of December 27, 1999, to the
Rights Agreement, dated as of February 13, 1998 (the "Rights
Agreement"), between Glen Burnie Bancorp, a Maryland corporation
(the "Company") and The Bank of Glen Burnie, a Maryland banking
corporation, as rights agent (the "Rights Agent").
WITNESSETH
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WHEREAS, pursuant to Section 27 of the Rights Agreement,
the Company and the Rights Agent may from time to time
supplement or amend the Rights Agreement prior to a Distribution
Date without the approval of the stockholders provided, that no
proposed supplement or amendment shall be effective unless (i)
there are Continuing Outside Directors and (ii) a majority of
such Continuing Outside Directors, at a meeting of the Board
duly called and held, votes in favor of the adoption of such
proposed supplement or amendment; and
WHEREAS, the Board has determined that no Distribution Date
has occurred and that there are Continuing Outside Directors;
and
WHEREAS, the Company and the Rights Agent desire to amend
the Rights Agreement and a majority of such Continuing Outside
Directors, at a meeting of the Board duly called and held, have
voted in favor of such amendment.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereby
agree as follows:
1. AMENDMENT OF "CERTAIN DEFINITIONS" SECTION.
(a) The first sentence of Section 1(j) of the Rights
Agreement is hereby amended to read as follows:
"Common Stock" when used in reference to the Company
shall mean the common stock, par value $1.00 per share, of
the Company or any other Shares of capital stock of the
Company into which such stock shall be reclassified or
changed.
(b) Section 1(s) is hereby amended by deleting clause
(v) thereof in its entirety and designating current clauses (vi)
and (vii) as clauses (v)and (vi), respectively.
(c) The following shall be inserted into Section 1
of the Rights Agreement immediately following Section 1(u):
(u-1) "Interested Person" with respect to a
Transaction shall mean any Person who (i) is or will
become an Acquiring Person if such Transaction were to
be consummated or an Affiliate or Associate of such a
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Person, and (ii) is, or directly or indirectly
proposed, nominated or financially supported, a
director of the Company in office at the time of
consideration of such Transaction who was elected at
an annual or special meeting of stockholders.
(d) The following shall be inserted into Section 1
of the Rights Agreement immediately following Section 1(nn):
(nn-1) "Transaction" shall mean any merger,
consolidation or sale of assets described in Section
13(a) hereof or any acquisition of Common Stock which
would result in a Person becoming an Acquiring Person.
2. AMENDMENT TO SECTION 11(a)(ii). The proviso clause at
the end of Section 11(a)(ii) is hereby amended to read as
follows:
provided, however that if the quotient obtained by
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dividing the Purchase Price (as in effect immediately
following such first occurrence) by the number of
Adjustment Shares is less than one, then the number of
Adjustment Shares shall be reduced to the extent
necessary so that such quotient shall be equal to one.
3. AMENDMENT OF "REDEMPTION AND TERMINATION" SECTION.
Section 23 of the Rights Agreement is hereby amended by adding
the following after Section 23(b):
(c) Notwithstanding the provision of Section
23(a), in the event that a majority of the Board of
Directors of the Company is elected by stockholder
action at an annual or special meeting of
stockholders, then until the 180th day following the
effectiveness of such election (including any
postponement or adjournment thereof), the Rights shall
not be redeemed if such redemption is reasonably
likely to have the purpose or effect of facilitating
a Transaction with an Interested Person.
4. AMENDMENT OF "EXCHANGE" SECTION. Section 24 of the
Rights Agreement is hereby amended by adding the following after
Section 24(d):
(e) Notwithstanding the provision of Section
24(a), in the event that a majority of the Board of
Directors of the Company is elected by stockholder
action at an annual or special meeting of
stockholders, then until the 180th day following the
effectiveness of such election (including any
postponement or adjournment thereof), the Rights shall
not be exchanged pursuant to Section 24(a) if such
exchange is reasonably likely to have the purpose or
effect of facilitating a Transaction with an
Interested Person.
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5. AMENDMENT TO "SUPPLEMENTS AND AMENDMENTS" SECTION.
Section 27 of the Rights Agreement is hereby amended by
designating the current text as paragraph (a) thereof,
substituting for each current reference to Section 27 therein
the words "Section 27(a)" and inserting the following
immediately after Section 27(a):
(b) Notwithstanding the provision of Section
27(a), in the event that a majority of the Board of
Directors of the Company is elected by stockholder
action at an annual or special meeting of
stockholders, then until the 180th day following the
effectiveness of such election (including any
postponement or adjournment thereof), this Agreement
shall not be supplemented or amended in any manner
reasonably likely to have the purpose or effect of
facilitating a Transaction with an Interested Person.
6. AMENDMENT OF "EXHIBIT A". Exhibit A of the Rights
Agreement is hereby amended by substituting the words "par value
$1.00 per share" for the words "par value $10.00 per share" each
time they appear.
7. DELETION OF "EXHIBIT B". Exhibit B of the Rights
Agreement is hereby deleted in its entirety.
8. AMENDMENT OF "EXHIBIT C". Exhibit C of the Rights
Agreement is hereby designated Exhibit B, each reference to
"Exhibit C" in the Rights Agreement is amended to refer to
"Exhibit B" and the current text thereof is deleted in its
entirety and the text attached hereto is substituted therefor.
9. RATIFICATION OF ORIGINAL RIGHTS AGREEMENT. Except as
amended hereby or by the First Amendment to the Rights
Agreement, dated December 9, 1999, the Rights Agreement remains
unchanged and is ratified and confirmed in all respects.
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IN WITNESS WHEREOF, the parties hereto have caused
this Second Amendment to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of
the day and year first above written.
ATTEST: GLEN BURNIE BANCORP
By: /s/ John E. Demyan By: /s/ F. William Kuethe, Jr.
------------------------- --------------------------
Name: John E. Demyan Name: F. William Kuethe, Jr.
Title: Chairman of the Board Title: President and Chief
of Glen Burnie Bancorp Executive Officer
ATTEST: THE BANK OF GLEN BURNIE,
as Rights Agent
By: /s/ John E. Demyan By: /s/F. William Kuethe, Jr.
------------------------- --------------------------
Name: John E. Demyan Name: F. William Kuethe, Jr.
Title: Chairman of the Board Title: President and Chief
of Glen Burnie Bancorp Executive Officer
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Exhibit A
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[Form of Rights Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 13, 2008, SUBJECT TO EARLIER
REDEMPTION OR EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL NOT
BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER
IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE
RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE
OBTAINABLE. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY
SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*
_____________
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
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Rights Certificate
GLEN BURNIE BANCORP
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 February 13, 1998, as amended,
restated, renewed or extended from time to time (the "Rights
Agreement"), between Glen Burnie Bancorp, a Maryland corporation
(the "Company"), and The Bank of Glen Burnie (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00
P.M. (New York City time) on February 13, 2008, at the office or
offices of the Rights Agent, or its successors as Rights Agent,
designated for such purpose, one fully paid, nonassessable share
of common stock, par value $1.00 per share, of the Company (the
"Common Stock"), at a purchase price of $100 per share (the
"Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and
included Certificate duly completed and executed. The number of
Rights evidenced by this Rights Certificate (and the number of
shares of Common Stock which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of February 13,
1998, based on the Common Stock as constituted at such date.
The Company reserves the right to require prior to the
occurrence of a Triggering Event (as such
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term is defined in the Rights Agreement) that a number of
Rights be exercised so that only whole shares of Common Stock
will be issued.
As more fully set forth in the Rights Agreement, from
and after the first occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights
Agreement), which is determined to have been involved in or
caused or facilitated, directly or indirectly, such Section
11(a)(ii) Event, (ii) a transferee of such Acquiring Person (or
of any such Associate or Affiliate) or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
such Acquiring Person (or of any such Associate or Affiliate who
becomes a transferee prior to or concurrently with such
Acquiring Person becoming such), such Rights shall become null
and void without any further action, and no holder hereof
shall have any right with respect to such Rights whether under
the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Common Stock or other
securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain
events, including Triggering Events (as defined in the Rights
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Agreement).
This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the Rights
Agreement.
Reference is also made to the Rights Agreement for definitions
of capitalized terms used and not defined herein. Copies of the
Rights Agreement are on file at the above-mentioned office of
the Rights Agent and are also available upon written request to
the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender
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hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of (i) the Close of Business on
the tenth Business Day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights
Agreement) and (ii) the Final Expiration Date (as defined in the
Rights Agreement).
If the Company so determines, no fractional shares of
Common Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral
multiples of one share of Common Stock (which may, at the
election of the Company, be evidenced by depository receipts)),
but in lieu thereof, a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall
be entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Common Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate
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action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights
Agreement), or to receive dividend or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of ___________________, ____
ATTEST: GLEN BURNIE BANCORP
By: ___________________ By:____________________
Secretary Title:
Countersigned:
THE BANK OF GLEN BURNIE
By: ____________________
Authorized Signature
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[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
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(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest herein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ___________________, ____
Signature
Signature Guaranteed:
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Certificate
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The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire
the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated:_________________, ____
Signature
Signature Guaranteed:
NOTICE
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The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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ELECTION TO PURCHASE
--------------------
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: GLEN BURNIE BANCORP
The undersigned hereby irrevocably elects to exercise
_______ Rights represented by this Rights Certificate to
purchase the shares of Common Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other Person which may be issuable or such other assets which
may be deliverable upon the exercise of the Rights) and
requests that certificates for any such shares or 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 Rights Certificate, a new Rights Certificate
for the balance 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
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who
is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:_________________, ____
Signature
Signature Guaranteed:
NOTICE
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The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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Exhibit B
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SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 13, 1998, the Board of Directors of Glen
Burnie Bancorp (the "Company") declared a dividend distribution
of one Right for each outstanding share of Company Common Stock
to stockholders of record at the close of business on February
13, 1998. Each Right entitles the registered holder to purchase
from the Company one share of Common Stock on the date of
exercise, at a Purchase Price of $100, subject to adjustment.
The terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and The Bank of
Glen Burnie, as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) 10 days following a public
announcement by the Company that a person (other than an Exempt
Person) or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 10% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date") or (ii) 10
business days following the commencement of a tender offer or
exchange offer that would result in a person or group
beneficially owning 10% or more of such outstanding shares of
Common Stock.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after February 13,
1998 will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on February 13,
2008, unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by
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the Board of Directors, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
In the event that at any time following the Rights
Dividend Declaration Date, a Person (other than an Exempt
Person) becomes the beneficial owner of 10% or more of the then
outstanding shares of Common Stock (except pursuant to an offer
for all outstanding shares of Common Stock which at least a
majority of the Continuing Outside Directors determined to be
fair to and otherwise in the best interests of the
Company and its stockholders) each holder of a Right (other than
Rights held by the party triggering the Rights and certain
transferees which are voided) will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the
Company, subject to certain limitations) having a value equal
to two times the exercise price of the Right. However, Rights
are not exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $100 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $200 worth of
Common Stock (or other consideration, as noted above) for $100.
Assuming that the Common Stock had a per share value of $30 at
such time, the holder of each valid Right would be entitled to
purchase 6.67 shares of Common Stock for $100.
The Board may, at its option, at any time after a
person becomes an Acquiring Person, exchange all or part of the
outstanding Rights (other than Rights owned by an Acquiring
Person, its affiliates, associates or transferees, which will
become void) for shares of Common Stock at an exchange ratio of
1.5 shares of Common Stock per Right.
In the event that, at any time following the date that
any Person becomes an Acquiring Person, (i) the Company engages
in certain mergers or other business combination transactions or
(ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise
price of the Right.
The Purchase Price payable, and the number of shares
of Common Stock (or the number and kind of other securities or
property, as the case may be) issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a
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stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the
Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the
current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends) or of subscription rights or warrants (other than
those referred to above).
No adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional
shares of Common Stock and in lieu thereof an adjustment in cash
will be made. For fractional shares of Common Stock, the
adjustment will be based on the market price of the
Common Stock on the last trading date prior to the date of
exercise.
In general, the Company may redeem the Rights in
whole, but not in part, at any time until ten days following the
Stock Acquisition Date, at a price of $.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by
the Board of Directors). Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require
the concurrence of a majority of the Continuing Outside
Directors. Immediately upon the action of the Board of
Directors ordering redemption of the Rights with, where
required, the concurrence of the Continuing Directors, the
Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 per Right redemption
price.
The term "Continuing Outside Directors" means (i)
members of the Board of Directors who are not Acquiring Persons,
or affiliates, associates or representatives of an Acquiring
Person, and who are not officers of the Company or any of its
subsidiaries, and were members of the Board of Directors prior
to the date of the Rights Agreement or (ii) Persons who
subsequently became members of the Board of Directors, who are
not Acquiring Persons or the affiliates, associates or
representatives of an Acquiring Person and who are not officers
of the Company or any of its subsidiaries, if such Persons'
nominations for election or election to the Board of Directors
are recommended or approved by a majority of the Continuing
Outside Directors.
Notwithstanding the foregoing, in the event that a
majority of the Board of Directors of the Company is elected by
stockholder action at an annual or special meeting of
stockholders then until the 180th day following the
effectiveness os such election (including any postponement
or adjournment thereof), the Rights shall not be redeemed if
such redemption is reasonably likely to have the purpose or
effect
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of facilitating a Transaction (defined as merger, consolidation
or sale of assets or any acquisition of Common Stock which would
result in a person becoming an Acquiring Person) with an
Interested Person (defined as a person or group who (i) is or
will become an Acquiring Person if such Transaction were to be
consummated, and (ii) is, or directly or indirectly proposed,
nominated or financially supported, a director of the Company in
office at the time of consideration of such Transaction who was
elected at an annual or special meeting of stockholders.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
The Rights Agreement may be amended in certain
instances so long as there are Continuing Outside Directors and
a majority of such Continuing Outside Directors votes in favor
of the proposed amendment. Other than those provisions relating
to the principal economic terms of the Rights, any of the
provisions of the Rights Agreement may be amended prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended in order to cure any
ambiguity, to make changes which do not adversely affect the
interest of holders of Rights (excluding the interest of any
Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment
to adjust the time period governing redemption shall be made at
such time as the Rights are not redeemable.
Notwithstanding the foregoing, in the event that a
majority of the Board of Directors of the Company is elected by
stockholder action at an annual or special meeting of
stockholders, then until the 180th day following the
effectiveness of such election (including any postponement
or adjournment thereof), the Rights shall not be supplemented or
amended in any manner reasonably likely to have the purpose or
effect of facilitating a Transaction with an Interested Person.
Copies of the Rights Agreement are available free of
charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated
herein by reference.
