UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
XX QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Alltrista Corporation
Indiana 0-21052 35-1828377
State of Incorporation Commission File Number IRS Identification Number
5875 Castle Creek Parkway, North Drive, Suite 440
Indianapolis, Indiana 46250-4330
Registrant's telephone number, including area code: (317) 577-5000
--------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 25, 1999
------------------------------- -----------------------------
Common Stock, without par value 6,718,133 shares
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the period ended March 28, 1999
INDEX
Page Number
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Unaudited Condensed Consolidated Statements of Income
for the three month periods ended
March 28, 1999 and March 29, 1998 3
Unaudited Condensed Consolidated Balance Sheets at
March 28, 1999 and December 31, 1998 4
Unaudited Condensed Consolidated Statements of Cash
Flows for the three month periods ended
March 28, 1999 and March 29, 1998 5
Unaudited Statement of Comprehensive Income for the
three month periods ended March 28, 1999 and
March 29, 1998 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 11
PART II. OTHER INFORMATION 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share amounts)
Three month period ended
------------------------
March 28, March 29,
1999 1998
-------- --------
<S> <C> <C>
Net sales $ 51,634 $ 43,126
-------- --------
Costs and expenses
Cost of sales 39,341 32,973
Selling, general and administrative expenses 8,556 7,193
-------- --------
Operating earnings 3,737 2,960
Interest expense, net (568) (401)
-------- --------
Income from continuing operations before taxes 3,169 2,559
Provision for income taxes (1,206) (972)
-------- --------
Income from continuing operations 1,963 1,587
Discontinued operations:
Gain from discontinued operations - 69
Net gain on disposal of discontinued operations 136 -
-------- --------
Net income $ 2,099 $ 1,656
======== ========
Basic earnings per share:
Income from continuing operations $ .29 $ .22
Discontinued operations .02 .01
-------- --------
Net income $ .31 $ .23
======== ========
Diluted earnings per share:
Income from continuing operations $ .29 $ .21
Discontinued operations .02 .01
-------- --------
Net income $ .31 $ .22
======== ========
Weighted average shares outstanding:
Basic 6,749 7,360
Diluted 6,844 7,500
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
March 28, December 31,
1999 1999
--------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,264 $ 21,454
Accounts receivable, net 31,329 20,907
Inventories
Raw materials and supplies 7,352 8,589
Work in process and finished goods 45,980 29,692
Deferred taxes on income 4,512 4,512
Prepaid expenses 1,857 1,414
--------- ---------
Total current assets 93,294 86,568
--------- ---------
Property, plant and equipment, at cost 151,067 152,706
Accumulated depreciation (103,565) (105,850)
--------- ---------
47,502 46,856
Goodwill, net 24,199 24,548
Other assets 8,291 7,859
--------- ---------
Total assets $ 173,286 $ 165,831
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 4,286 $ 4,286
Notes payable 2,900 -
Accounts payable 25,281 20,579
Other current liabilities 13,018 14,780
--------- ---------
Total current liabilities 45,485 39,645
--------- ---------
Noncurrent liabilities
Long-term debt 21,429 21,429
Other noncurrent liabilities 9,920 9,864
--------- ---------
Total noncurrent liabilities 31,349 31,293
--------- ---------
Contingencies
Shareholders' equity:
Common stock (7,967,966 common shares issued and
6,737,254 shares outstanding at March 29, 1998) 40,446 40,494
Retained earnings 86,138 84,039
Accumulated other comprehensive income - cumulative
translation adjustment (509) (619)
--------- ---------
126,075 123,914
Less treasury stock (1,230,712 shares, at cost) (29,623) (29,021)
--------- ---------
Total shareholders' equity 96,452 94,893
--------- ---------
Total liabilities and shareholders' equity $ 173,286 $ 165,831
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
Three month period ended
------------------------
March 28, March 29,
1999 1998
---------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income $ 2,099 $ 1,656
Reconciliation of net income to net cash used in
operating activities:
Depreciation and amortization 2,634 2,564
Other 18 87
Changes in working capital components (22,745) (16,502)
-------- --------
Net cash used in operating activities (17,994) (12,195)
-------- --------
Cash flows from financing activities
Proceeds from revolving credit borrowings 2,900 2,788
Proceeds from issuance of common stock 258 262
Purchase of treasury stock (910) (4,229)
-------- --------
Net cash provided by (used in) financing activities 2,248 (1,179)
-------- --------
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 866 13
Additions to property, plant and equipment (4,226) (1,830)
Proceeds from divestitures of businesses and product lines 362 -
Investment in insurance contracts (274) (685)
Other (172) (35)
-------- --------
Net cash used in investing activities (3,444) (2,537)
-------- --------
Net decrease in cash (19,190) (15,911)
Cash and cash equivalents, beginning of period 21,454 26,641
-------- --------
Cash and cash equivalents, end of period $ 2,264 $ 10,730
======== ========
</TABLE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
(thousands of dollars)
Three month period ended
------------------------
March 28, March 29,
1999 1998
---------- ----------
<S> <C> <C>
Net income $ 2,099 $ 1,656
Foreign currency translation 110 48
-------- --------
Comprehensive income $ 2,209 $ 1,704
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
5
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Presentation of Condensed Consolidated Financial Statements
Certain information and footnote disclosures, including significant accounting
policies normally included in financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted. In the
opinion of management, the accompanying condensed financial statements include
all adjustments necessary for a fair presentation of the results for the interim
periods presented. Results of operations for the periods shown are not
necessarily indicative of results for the year, particularly in view of some
seasonality for the home food preservation products. The accompanying unaudited
condensed financial statements should be read in conjunction with the
Consolidated Financial Statements and Notes to Consolidated Financial Statements
of Alltrista Corporation and Subsidiaries included in the Company's latest
annual report.
2. EPS Calculation
Basic earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share are calculated based on the weighted average number of outstanding common
shares plus the dilutive effect of stock options as if they were exercised.
A computation of earnings per share is as follows (in thousands except per share
data):
<TABLE>
<CAPTION>
Three month period ended
------------------------
March 28, March 29,
1999 1998
---------- ---------
<S> <C> <C>
Income from continuing operations $ 1,963 $ 1,587
Discontinued operations 136 69
-------- --------
Net income $ 2,099 $ 1,656
======== ========
Weighted average shares outstanding 6,749 7,360
Additional shares assuming conversion of stock options 95 140
-------- --------
Weighted average shares outstanding assuming conversion 6,844 7,500
======== ========
Basic earnings per share
Income from continuing operations $ .29 $ .22
Discontinued operations .02 .01
-------- --------
Net income $ .31 $ .23
======== ========
Diluted earnings per share - assuming conversion
Income from continuing operations $ .29 $ .21
Discontinued operations .02 .01
-------- --------
Net income $ .31 $ .22
======== ========
</TABLE>
3. Segment Information
The Company is organized into two distinct segments: metal and plastic products.
The metal products segment includes sales of zinc and consumer products. This
segment provides cast zinc strip and fabricated zinc products, primarily zinc
battery cans and coinage. This segment also markets a line of home food
preservation products including home canning jars, jar closures and related food
products, which are distributed through a wide variety of retail outlets. The
plastic products segment produces injection molded plastic products used in
medical, pharmaceutical and consumer products, industrial thermoformed plastic
parts for appliances, manufactured housing and recreational vehicles and
multi-layer plastic sheet and formed containers used in food packaging.
6
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Net sales, operating earnings and assets employed in operations by segment are
summarized as follows (thousands of dollars):
<TABLE>
<CAPTION>
Three month period ended
--------------------------
March 28, March 29,
1999 1998
---------- ----------
<S> <C> <C>
Net Sales:
Metal products
Consumer products $ 12,380 $ 7,175
Zinc products 13,572 10,984
--------- ---------
Total metal products 25,952 18,159
Plastic products:
Industrial thermoformed parts 9,264 9,169
Injection molded products 9,044 8,553
Plastic packaging 7,727 7,245
--------- ---------
Total plastic products 26,035 24,967
Intercompany (353) -
--------- ---------
Total net sales $ 51,634 $ 43,126
========= =========
Operating earnings:
Metal products $ 1,799 $ 1,170
Plastic products 2,495 2,163
Intercompany (56) -
Unallocated corporate expenses (501) (373)
--------- ---------
Total operating earnings 3,737 2,960
Interest expense, net (568) (401)
--------- ---------
Income from continuing operations before taxes $ 3,169 $ 2,559
========= =========
March 28, December 31,
1999 1998
---------- ------------
Assets employed in operations:
Metal products $ 101,558 $ 76,249
Plastic products 55,697 55,171
--------- ---------
Total assets employed in operations 157,255 131,420
Corporate (1) 16,031 34,411
--------- ---------
Total assets $ 173,286 $ 165,831
========= =========
<FN>
(1) Corporate assets primarily include cash and cash equivalents, amounts
relating to benefit plans, deferred tax assets and corporate facilities and
equipment.
</FN>
</TABLE>
4. Contingencies
The Company is subject to and involved in claims arising out of the conduct of
its business including those relating to product liability, environmental and
safety and health matters. The Company's information at this time does not
indicate that the resolution of the aforementioned claims will have a material,
adverse effect upon financial condition, results of operations, cash flows or
competitive position of the Company.
7
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5. Subsequent Events
On April 25, 1999, the Company acquired the net assets of Triangle Plastics,
Inc. and its TriEnda subsidiary ("Triangle Plastics") for $148.0 million in cash
plus acquisition costs. The transaction will be accounted for as a purchase.
Triangle Plastics manufactures heavy gauge industrial thermoformed parts for
original equipment manufacturers in a variety of industries, including the heavy
trucking, agricultural, portable toilet, recreational and construction markets.
TriEnda produces plastic thermoformed products for material handling
applications. Triangle Plastics employs approximately 1,100 people and has a
technical center and five production facilities located in Florida, Iowa,
Tennessee and Wisconsin. Triangle Plastics had net sales of $114.1 million in
1998.
The Company financed the acquisition with a new $250 million credit facility
consisting of a six year $150 million term loan and a revolving credit facility
whereby the Company can borrow up to $100 million through March 31, 2005, when
all borrowings mature. The term loan requires quarterly payments of principal
escalating from an annual aggregate amount of $15.0 million in the first year to
$30.0 million in the fifth and sixth year. Interest on the borrowings is based
upon fixed increments over the adjusted London Interbank Offered Rate or the
agent bank's alternate borrowing rate as defined in the agreement. As part of
the transaction, the Company paid off existing debt and incurred a $1.6 million
prepayment charge.
On May 4, 1999, the Company entered into a definitive agreement to sell its
plastic packaging product line, which includes coextrude high-barrier plastic
sheet and containers for the food packaging industry, for $30.0 million in cash,
subject to a net working capital adjustment. Proceeds from the sale will be used
for debt repayment. The transaction is expected to close no later than the end
of May or early June 1999. The sales agreement is subject to a number of closing
conditions. The Company had 1998 plastic packaging sales of $28.1 million.
8
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results of Continuing Operations
The Company reported net sales of $51.6 million for the first quarter of 1999 an
increase of 19.7% from sales of $43.1 million for the same period of 1998.
Operating earnings of $3.7 for the quarter increased 26.3% from $3.0 million in
the first quarter of 1998. Both the metal and plastic products segments reported
increased sales and operating earnings.
Net sales within the metal products segment increased from $18.2 million in the
first quarter of 1998 to $26.0 million in 1999. The introduction of the Golden
Harvest housewares product line added $3.6 million in consumer product sales.
Increased sales volume for home canning products and specialty glassware also
attributed to the increase in sales. The Company anticipates the housewares
product line to contribute approximately $12.0 million in sales for the year. In
April 1999, the Company began selling home canning products in Hungary. It is
still too early to determine the acceptance of the Company's products in this
test market. Sales of copper-plated zinc coins to both the U.S Mint and the
Royal Canadian Mint increased over 1998 adding $3.4 million in sales compared to
the previous year. A reduction in zinc battery can and industrial strip sales
offset, in part, the increase in coinage sales. Although profits were not
impacted, reported sales were also $0.4 million lower as a result of a 4%
decrease in zinc ingot prices. Based upon recent discussions with the U.S. Mint,
the Company anticipates demand for coinage to be higher for the remainder of
1999.
Net sales within the plastic products segment increased from $25.0 million in
the first quarter of 1998 to $26.0 million in 1999 with sales of both plastic
packaging and injection molded products increasing by $0.5 million. Demand for
the Company's retort and rollstock packaging products increased and the
Company's growth strategy for injection molding, launched in 1997, continues to
foster sales growth. Sales of industrial thermoformed parts were essentially the
same as the previous period. Increased sales of refrigerator parts were offset
by lower sales of bath and other products to the manufactured housing and
recreational vehicle industries.
Gross margin percentages increased slightly from 23.5% in the first quarter of
1998 to 23.8% in the first quarter of 1999. The increase in coinage and plastic
packaging sales volume as well as reduced scrap in the plastic packaging
operation attributed to the margin improvement.
Selling, general and administrative expenses increased 18.9% from $7.2 million
in the first quarter of 1998 to $8.6 million in the first quarter of 1999.
Warehousing costs for the new housewares product line and staff additions,
training costs and other expenses in the consumer products operations accounted
for substantially all of the increase.
Interest expense, net in the first quarter of 1999 was $0.6 million compared to
$0.4 million for the same period last year. The increase in net expense was
primarily due to less interest earned on lower short-term investments. The
Company's effective tax rate increased slightly from 38.0% in the first quarter
of 1998 to 38.1% in the first quarter of 1999.
Income from continuing operations of $2.0 million increased 23.7% from $1.6
million in the first quarter of 1998. Diluted earnings per share from continuing
operations was $0.29, a 38.1% increase from the $0.21 reported in the first
quarter of 1998. Diluted weighted average shares outstanding decreased from
7,500,000 in the first quarter of 1998 to 6,844,000 in 1999 due to the Company
purchasing its common stock in the open market. The reduction in shares
outstanding added $0.03 to diluted earnings per share.
9
<PAGE>
Financial Condition, Liquidity and Capital Resources
Working capital (excluding the current portion of long-term debt and notes
payable) increased $3.8 million from $51.2 million at year-end 1998 to $55.0
million at March 28, 1999. Accounts receivable increased $10.4 million on strong
sales across most product lines. Inventory and accounts payable increased $15.1
million and $4.7 million, respectively, primarily due to the addition of the
housewares product line and the customary seasonal home canning activity.
Short-term borrowings increased $2.9 million to fund seasonal working capital
requirements.
Capital expenditures were $4.2 million in the first quarter of 1999 compared to
$1.8 million in for the same period in 1998 and are largely related to
maintaining facilities and improving manufacturing efficiencies. First quarter
1998 investments included new injection molding machines, upgrading an existing
plating line and an investment in a new high precision slitting line for zinc
products and improvements made to consumer product assembly lines and
information systems.
In January 1999, the Company exited its plastic plant in Arecibo, Puerto Rico.
The plant was shut down on schedule with costs in line with the amount reserved
in 1998. Taking into account the cash proceeds from the sale of certain
equipment, tax benefits and costs paid, the Company expects the transaction to
provide approximately $1.3 million in cash.
On March 23, 1999, the Company's board of directors approved the repurchase of
up to 500,000 shares of the Company's common stock. Although the Company is
undertaking an aggressive growth strategy, Company management believes a share
repurchase program is a good use of funds at current price levels. In addition
to this program, the Company has a policy to annually repurchase shares to
offset the dilutive effect of shares issued under employee benefit plans.
On April 25, 1999, the Company acquired the net assets of Triangle Plastics,
Inc. and its TriEnda subsidiary ("Triangle Plastics") for $148.0 million in cash
plus acquisition costs. The transaction will be accounted for as a purchase.
Triangle Plastics manufactures heavy gauge industrial thermoformed parts for
original equipment manufacturers in a variety of industries, including the heavy
trucking, agricultural, portable toilet, recreational and construction markets.
TriEnda produces plastic thermoformed products for material handling
applications. Triangle Plastics employs approximately 1,100 people and has a
technical center and five production facilities located in Florida, Iowa,
Tennessee and Wisconsin. Triangle Plastics had net sales of $114.1 million in
1998.
The Company financed the acquisition with a new $250 million credit facility
consisting of a six year $150 million term loan and a revolving credit facility
whereby the Company can borrow up to $100 million through March 31, 2005, when
all borrowings mature. The term loan requires quarterly payments of principal
escalating from an annual aggregate amount of $15.0 million in the first year to
$30.0 million in the fifth and sixth year. Interest on the borrowings is based
upon fixed increments over the adjusted London Interbank Offered Rate or the
agent bank's alternate borrowing rate as defined in the agreement. As part of
the transaction, the Company paid off existing debt and incurred a $1.6 million
prepayment charge. The Company believes that existing funds, cash generated from
operations and the new debt facility are adequate to satisfy its working capital
and capital expenditure requirements for the foreseeable future. However the
Company may raise additional capital from time to time to take advantage of
favorable conditions in the capital markets or in connection with the Company's
corporate development activities.
On May 4, 1999, the Company entered into a definitive agreement to sell its
plastic packaging product line, which includes coextrude high-barrier plastic
sheet and containers for the food packaging industry, for $30.0 million in cash,
subject to a net working capital adjustment. Proceeds from the sale will be used
for debt repayment. The transaction is expected to close no later than the end
of May or early June 1999. The sales agreement is subject to a number of closing
conditions. The Company had 1998 plastic packaging sales of $28.1 million.
The Company is subject to and involved in claims arising out of the conduct of
its business including those relating to product liability, environmental and
safety and health matters. The Company's information at this time does not
indicate that the resolution of these claims will have a material adverse effect
upon financial condition, results of operations, capital expenditures or
competitive position of the Company.
10
<PAGE>
The Company continues to assess its exposure to potential Year 2000 issues
within its businesses. The assessment includes information technology (IT),
non-information technology (non-IT), and customer and vendor readiness. Non-IT
systems include computer-controlled devices with embedded technology such as
microcontrollers. Phases within the process include assessment, remediation,
testing and implementation. With respect to each of the divisions, the Company's
assessment phase for both IT and non-IT has been completed. Through the
assessment process, the Company has identified certain financial and
manufacturing systems that are not Year 2000 ready. The Company has plans to
replace or upgrade these systems with remediation, testing and implementation to
be completed no later than October 1999. The largest undertaking is an
enterprise-wide system implementation in the Company's consumer product
operation. As a contingency plan to the new enterprise-wide system, steps are
being taken to modify the existing code for the current manufacturing, inventory
and financial systems. The failure of the Company to properly assess and
remediate Year 2000 problems and test or implement solutions could result in
disruptions of normal business operations. Such failures could have a material
adverse effect upon the financial condition, results of operations, cash flows
or competitive position of the Company.
The Company has incurred less than $300,000 in costs to date directly associated
with the remediation of its own systems. Management believes future Year 2000
assessment and remediation costs will be less than $300,000. The Company intends
to fund any necessary Year 2000 assessment and remediation costs from internal
financial resources. These costs do not include the cost of upgrading or
replacing systems for other business reasons. Such measures usually provide the
additional benefit of making the systems Year 2000 compliant.
The assessment of customers and suppliers for Year 2000 readiness ranges from
50% to 100% complete across the Company's businesses as of April 1999. The
assessment of third parties is scheduled to be complete no later than June 1999.
The assessments include third party electronic interfaces. Several suppliers
have not yet responded to the Company's inquiries. Follow-up correspondence is
being conducted. Other suppliers have disclosed varying degrees of compliance
issues but indicate they have plans and procedures in place to become compliant.
In all cases, alternate supply sources exist and are available should any of
these suppliers not be Year 2000 ready. The Company currently is not aware of
any significant customer or supplier with a Year 2000 issue that will materially
impact the Company's financial condition, results of operations, cash flows or
competitive position. However, the Company has no means of ensuring that
customers or suppliers will be Year 2000 ready. The inability of other entities
to be prepared could have a material adverse effect on the Company.
While the Company has not fully completed its assessment process, it is not
expected that Year 2000 issues will have a material adverse effect on the
Company. However, it is possible that, for example, disruptions in the economy
generally or interruptions in the Company's manufacturing processes because of
Year 2000 problems could adversely affect the Company's results of operations,
liquidity and financial condition.
This Quarterly Report on Form 10-Q includes certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Those statements include, but may not be
limited to, discussions regarding expectations of future sales and
profitability, anticipated demand for the Company's products and expectations
regarding operating and other expenses. Reliance on forward-looking statements
involves risks and uncertainties. Although the Company believes that the
assumptions upon which the forward-looking statements contained herein are based
are reasonable, any of those assumptions could prove to be inaccurate. As the
result, the forward-looking statements based on those assumptions could also be
incorrect. Please see the Company's Report on Form 8-K, dated June 10, 1997, for
a list of factors which could cause the Company's actual results to differ
materially from those projected in the Company's forward-looking statements.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Form of Bylaws of Alltrista Corporation
4.1 Form of Rights Agreement Dated March 22, 1993 and as Amended
and Restated as of May 7, 1999
27 Financial Data Schedule [EDGAR filing only]
b. Reports on Form 8-K
The Company announced it had entered into a definitive agreement to acquire the
assets of Triangle Plastics, Inc. and of its subsidiary, TriEnda Corporation in
a Form 8-K (Commission File Number 0-21052) dated March 16, 1999.
SIGNATURE
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 thereunto duly authorized.
Alltrista Corporation
-------------------------
(Registrant)
Date: May 11, 1999 By: /s/ Kevin D. Bower
------------- -------------------------
Kevin D. Bower
Senior Vice President and
Chief Financial Officer
12
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
March 28, 1999
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------------------------------------- --------------
3.1 Form of Bylaws of Alltrista Corporation 14
4.1 Form of Rights Agreement Dated as of March 22, 1993
and as Amended and Restated as of May 7, 1999 23
27 Financial Data Schedule [EDGAR filing only]
13
Exhibit 3.1
Adopted on March 22, 1993
Amended May 11, 1993
Amended September 15, 1994
Amended October 23, 1995
Amended September 18, 1997
Amended January 29, 1999
Bylaws
of
Alltrista Corporation
Article One
Capital Stock
Section A. Classes of Stock. The capital stock of the corporation shall
consist of shares of such kinds and classes, with such designations and such
relative rights, preferences, qualifications, limitations and restrictions,
including voting rights, and for such consideration as shall be stated in or
determined in accordance with the Amended Articles of Incorporation and any
amendment or amendments thereof, or the Indiana Business Corporation Law.
Consistent with the Indiana Business Corporation Law, capital stock of the
corporation owned by the corporation may be referred to and accounted for as
treasury stock.
Section B. Certificates for Shares. All share certificates shall be
consecutively numbered as issued and shall be signed by the president or a vice
president and the corporate secretary or any assistant secretary of the
corporation.
Section C. Transfer of Shares. The shares of the capital stock of the
corporation shall be transferred only on the books of the corporation by the
holder thereof, or by his attorney, upon the surrender and cancellation of the
stock certificate, whereupon a new certificate shall be issued to the
transferee. The transfer and assignment of such shares of stock shall be subject
to the laws of the State of Indiana. The board of directors shall have the right
to appoint and employ one or more stock registrars and/or transfer agents in the
State of Indiana or in any other state.
Section D. Control Share Acquisition Statute Inapplicable. Chapter 42 of
the Indiana Business Corporation Law (IC 23-1-42) shall not apply to control
share acquisitions of shares of the Corporation.
Article Two
Shareholders
Section A. Annual Meetings. The regular annual meeting of the shareholders
of the corporation shall be held on the fourth Wednesday in April of each year,
or on such other date within a reasonable interval after the close of the
corporation's last fiscal year as may be designated from time to time by the
board of directors, for the election of the directors of the corporation, and
for the transaction of such other business as is authorized or required to be
transacted by the shareholders.
Section B. Special Meetings. Special meetings of the shareholders may be
called by the president or by the board of directors or as otherwise may be
required by law.
Section C. Time and Place of Meetings. All meetings of the shareholders
shall be held at the principal office of the corporation or at such other place
within or without the State of Indiana and at such time as may be designated
from time to time by the board of directors.
Rider 1. Section D. Notice of Business. No business may be transacted at an
Annual Meeting of Shareholders, other than business that is either (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the board of directors (or any duly authorized committee thereof),
(b) otherwise properly brought before the Annual Meeting by or at the direction
of the board of directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the Annual Meeting by any shareholder of the
<PAGE>
corporation (i) who is a shareholder of record on the date of the giving of the
notice provided for in this Section D of this Article Two and on the record date
for the determination of shareholders entitled to vote at such annual meeting
and (ii) who complied with the notice procedures set forth in this Section D of
this Article Two.
In addition to any other applicable requirements, for business to be
properly brought before an Annual Meeting by a shareholder, such shareholder
must have given timely notice thereof in proper written form to the secretary of
the corporation.
To be timely, a shareholder's notice to the secretary must be delivered to
or mailed and received at the principal executive offices of the corporation not
less than ninety (90) days nor more than one hundred and twenty (120) days prior
to the anniversary date of the immediately preceding Annual Meeting of
shareholders; provided, however, that in the event that the Annual Meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the Annual Meeting was made,
whichever first occurs. In no event shall the public announcement of an
adjournment of an Annual Meeting commence a new time period for the giving of a
shareholder's notice as described above.
To be in proper written form, a shareholder's notice to the secretary must
set forth as to each matter such shareholder proposes to bring before the Annual
Meeting (i) a brief description of the business desired to be brought before the
Annual Meeting and the reasons for conducting such business at the Annual
Meeting, (ii) the name and record address of such shareholder, (iii) the class
or series and number of shares of capital stock of the corporation which are
owned beneficially or of record by such shareholders, (iv) a description of all
arrangements or understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal, and (v) a
representation that such shareholder intends to appear in person or by proxy at
the Annual Meeting to bring such business before the meeting.
No business shall be conducted at the Annual Meeting of Shareholders except
business brought before the Annual Meeting in accordance with the procedure set
forth in this Section D of this Article Two, provided, however, that, once
business has been properly brought before the Annual Meeting in accordance with
such procedures, nothing in this Section D of this Article Two shall be deemed
to preclude discussion by any shareholder of any such business. If the chairman
of an Annual Meeting determines that business was not properly brought before
the Annual Meeting in accordance with the foregoing procedures, the chairman
shall declare to the meeting that the business was not properly brought before
the meeting and such business shall not be transacted.
Article Three
Directors
Section A. Number and Terms of Office. The business of the corporation
shall be controlled and managed in accordance with the Indiana Business
Corporation Law by a board of eight directors, divided into classes as provided
in the Amended Articles of Incorporation.
Rider 2. Section B. Nomination of Directors. Only persons who are nominated
in accordance with the following procedures shall be eligible for election as
directors of the corporation, except as may be otherwise provided in the Amended
Certificate of Incorporation including the right of holders of preferred stock
of the corporation to nominate and elect a specified number of directors in
certain circumstances. Nominations of persons for election to the Board of
Directors may be made at any Annual Meeting of Shareholders, or at any Special
Meeting of Shareholders called for the purpose of electing directors, (a) by or
at the direction of the Board of Directors (or any duly authorized committee
thereof), or (b) by any shareholder of the corporation (I) who is a shareholder
of record on the date of the giving of the notice provided for in this Section B
of this Article Three and on the record date for the determination of
shareholders entitled to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section B of this Article Three.
In addition to any other applicable requirements, for a nomination to be
made by a shareholder, such shareholder must have given timely notice thereof in
proper written form to the secretary of the corporation.
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To be timely, a shareholder's notice to the secretary must be delivered to
or mailed and received at the principal executive offices of the corporation (a)
in the case of an Annual Meeting, not less than ninety (90) days nor more than
one hundred and twenty (120) days prior to the anniversary date of the
immediately preceding Annual Meeting of Shareholders; provided, however, that in
the event that the Annual Meeting is called for a date that is not within thirty
(30) days before or after such anniversary date, notice by the shareholder in
order to be timely must be so received not later than the close of business on
the tenth (10th) day following the day on which such notice of the date of the
Annual Meeting was mailed or such public disclosure of the date of the Annual
Meeting was made, whichever first occurs; and (b) in the case of a Special
Meeting of Shareholders called for the purpose of electing directors, not later
than the close of business on the tenth (10th) day following the day on which
notice of the date of the Special Meeting was mailed or public disclosure of the
date of the Special Meeting was made, whichever first occurs. In no event shall
the public announcement of an adjournment of an Annual Meeting or Special
Meeting commence a new time period for the giving of a shareholder's notice as
described above.
To be in proper written form, a shareholder's notice to the secretary must
set forth (a) as to each person whom the shareholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the shareholder giving the
notice (i) the name and record address of such shareholder, (ii) the class or
series and number of shares of capital stock of the corporation which are owned
beneficially or of record by such shareholder, (iii) a description of all
arrangements or understandings between such shareholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder intends to appear in person or by proxy at
the meeting to nominate the persons named in its notice and (v) any other
information relating to such shareholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Such notice
must be accompanied by a written consent of each proposed nominee to being named
as a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section B
of this Article Three, except as may be otherwise provided in the Amended
Certificate of Incorporation of the Corporation. If the chairman of the meeting
determines that a nomination was not made in accordance with the foregoing
procedures, the chairman shall declare to the meeting that the nomination was
defective and such defective nomination shall be disregarded.
Section B. Eligibility. No person shall be eligible for election or
reelection as a director after having attained the age of seventy prior to or on
the day of election or reelection. A director who attains the age of seventy
during his term of office shall be eligible to serve only until the annual
meeting of shareholders of the corporation next following such director's
seventieth birthday.
An employee director, other than the chief executive officer, shall resign
from the board of directors at the time of any reduction in responsibility or
upon termination of employment for whatever reason.
A director who was chief executive officer of the corporation and whose
employment was terminated for whatever reason, other than retirement, shall
resign from the board of directors upon such termination. A director who is a
past chief executive officer of the corporation shall resign from the board of
directors if another director who is the then current chief executive officer
ceases to be such officer but continues as a director. The board of directors
may, at its option, accept or reject such resignations.
A non-employee director shall advise the board of directors on a timely
basis of any reduction in responsibility with the director's then current
employer, except for retirement, or change in employer for which such director
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<PAGE>
was engaged when most recently appointed, elected or reelected as a director and
shall resign from the board of directors. The board of directors may, at its
option, accept or reject such resignation.
Section C. Chairman of the Board. The chairman of the board shall be chosen
from among the directors and shall preside at all meetings of the board of
directors and shareholders. He shall confer from time to time with members of
the board and the officers of the corporation and shall perform such other
duties as may be assigned to him by the board. Except where by law the signature
of the president is required, the chairman of the board shall possess the same
power as the president to sign all certificates, contracts, and other
instruments of the corporation which may be authorized by the board of
directors.
Section D. Regular Meetings. The regular annual meeting of the board of
directors shall be held immediately after the adjournment of each annual meeting
of the shareholders. Regular quarterly meetings of the board of directors shall
be held on the third Thursday of January, April, July and October of each year,
or on such date as may be designated from time to time by the board of
directors.
Section E. Special Meetings. Special meetings of the board of directors may
be called at any time by the chairman of the board or by the board, by giving to
each director an oral or written notice setting the time, place and purpose of
holding such meetings.
Section F. Time and Place of Meetings. All meetings of the board of
directors shall be held at the principal office of the corporation, or at such
other place within or without the State of Indiana and at such time as may be
designated from time to time by the board of directors.
Section G. Notices. Any notice, of meetings or otherwise, which is given or
is required to be given to any director may be in the form of oral notice.
Section H. Committees. The board of directors is expressly authorized to
create committees and appoint members of the board of directors to serve on
them, as follows:
(1) Temporary and standing committees, including an executive committee,
and the respective chairmen thereof, may be appointed by the board of directors,
from time to time. The board of directors may invest such committees with such
powers and limit the authority of such committees as it may see fit, subject to
conditions as it may prescribe. The executive committee shall consist of three
or more members of the board. All other committees shall consist of one or more
members of the board. All committees so appointed shall keep regular minutes of
the transactions of their meetings, shall cause them to be recorded in books
kept for that purpose in the office of the corporation, and shall report the
same to the board of directors at its next meeting. Within its area of
responsibility, each committee shall have and exercise all of the authority of
the board of directors, except as limited by the board of directors or by law,
and shall have the power to authorize the execution of an affixation of the seal
of the corporation to all papers or documents which may require it.
(2) Neither the designation of any of the foregoing committees or the
delegation thereto of authority shall operate to relieve the board of directors,
or any member thereof, of any responsibility imposed by law.
Section I. Loans to Directors. Except as consistent with the Indiana
Business Corporation Law, the corporation shall not lend money to or guarantee
the obligation of any director of the corporation.
Article Four
Officers
Section A. Election and Term of Office. The officers of the corporation
shall be elected by the board of directors at the regular annual meeting of the
board, unless the board shall otherwise determine, and shall consist of a
president, one or more vice presidents (any one or more of whom may be
designated "corporate," "executive," "senior," "group" or other functionally
described vice president), a corporate secretary, a treasurer and, if so elected
by the board, may include a vice-chairman of the board of directors and one or
4
<PAGE>
more assistant secretaries and assistant treasurers. The board of directors
shall, from time to time, designate the president or, if elected, the vice
chairman of the board of directors, as the chief executive officer of the
corporation, who shall have general supervision of the affairs of the
corporation. The board of directors may, from time to time, designate a chief
operating officer and a chief financial officer from among the officers of the
corporation. Each officer shall continue in office until his successor shall
have been duly elected and qualified or until removed in the manner hereinafter
provided. Vacancies occasioned by any cause in any one or more of such offices
may be filled for the unexpired portion of the term by the board of directors at
any regular or special meeting of the board.
Section B. Vice-Chairman of the Board. The vice-chairman of the board, if
elected, shall be chosen from among the directors and shall, in the absence of
the chairman of the board, preside at all meetings of the shareholders and
directors. He shall have and exercise the powers and duties of the chairman of
the board in the event of the chairman's absence or inability to act or during a
vacancy in the office of chair man of the board. He shall possess the same power
as the chairman to sign all certificates, contracts, and other instruments of
the corporation which may be authorized by the board of directors. He shall also
have such other duties and responsibilities as shall be assigned to him by the
board of directors or chairman. During the absence or disability of the
president, if the president has been designated chief executive officer, the
vice chairman of the board shall act as the chief executive officer of the
corporation and shall exercise all the powers and discharge all the duties of
the president.
Section C. The President. The president and his duties shall be subject to
the control of the board of directors and, if the chairman of the board has been
designated chief executive officer, to the control of the chairman of the board.
The president shall have the power to sign and execute all deeds, mortgages,
bonds, contracts and other instruments of the corporation as authorized by the
board of directors, except in cases where the signing and execution thereof
shall be expressly designated by the board of directors or by these bylaws to
some other officer, official or agent of the corporation. The president shall
perform all duties incident to the office of president and such other duties as
are properly required of him by the bylaws. During the absence or disability of
the chairman of the board and the vice-chairman of the board, the president
shall exercise all the powers and discharge all the duties of the chairman of
the board.
Section D. The Vice Presidents. The vice presidents shall possess the same
power as the president to sign all certificates, contracts and other instruments
of the corporation which may be authorized by the board of directors, except
where by law the signature of the president is required. All vice presidents
shall perform such duties as may from time to time be assigned to them by the
board of directors, the chairman of the board and the president. In the event of
the absence or disability of the president, and at the request of the chairman
of the board, or in his absence or disability, at the request of the
vice-chairman of the board, or in his absence or disability at the request of
the board of directors, the vice presidents in the order designated by the
chairman of the board, or in his absence or disability by the vice-chairman of
the board, or in his absence or disability by the board of directors, shall
perform all of the duties of the president, and when so acting they shall have
all of the powers of and be subject to the restrictions upon the president and
shall act as a member of, or as a chairman of, any standing or special committee
of which the president is a member or chairman by designation or ex officio.
Section E. The Corporate Secretary. The corporate secretary of the
corporation shall:
(1) Keep the minutes of the meetings of the shareholders and the board of
directors in books provided for that purpose.
(2) See that all notices are duly given in accordance with the provisions
of these bylaws and as required by law.
(3) Be custodian of the records and of the seal of the corporation and see
that the seal is affixed to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized in accordance with the
provisions of these bylaws.
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(4) Keep a register of the post office address of each shareholder, which
shall be furnished to the corporate secretary at his request by such
shareholder, and make all proper changes in such register, retaining and filing
his authority for all such entries.
(5) See that the books, reports, statements, certificates and all other
documents and records required by law are properly kept, filed and
authenticated.
(6) In general, perform all duties incident to the office of corporate
secretary and such other duties as may from time to time be assigned to him by
the board of directors.
(7) In case of absence or disability of the corporate secretary, the
assistant secretaries, in the order designated by the chief executive officer,
shall perform the duties of corporate secretary.
Section F. The Treasurer. The treasurer of the corporation shall:
(1) Give bond for the faithful discharge of his duties if required by the
board of directors.
(2) Have the charge and custody of, and be responsible for, all funds and
securities of the corporation, and deposit all such funds in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of these bylaws.
(3) At all reasonable times, exhibit his books of account and records, and
cause to be exhibited the books of account and records of any corporation a
majority of whose stock is owned by the corporation, to any of the directors of
the corporation upon application during business hours at the office of this
corporation or such other corporation where such books and records are kept.
(4) Render a statement of the conditions of the finances of the corporation
at all regular meetings of the board of directors, and a full financial report
at the annual meeting of the shareholders, if called upon so to do.
(5) Receive and give receipts for monies due and payable to the corporation
from any source whatsoever
(6) In general, perform all of the duties incident to the office of
treasurer and such other duties as may from time to time be assigned to him by
the board of directors.
(7) In case of absence or disability of the treasurer, the assistant
treasurers, in the order designated by the chief executive officer, shall
perform the duties of treasurer.
Article Five
Corporate Seal
The corporate seal of the corporation shall be a round, metal disc with the
words "Alltrista Corporation" around the outer margin thereof, and the words
"Incorporated - January 10, 1991", in the center thereof, so mounted that it may
be used to impress words in raised letters upon paper.
Article Six
Amendment
These bylaws may be altered, added to, amended or repealed by the board of
directors of the corporation at any regular or special meeting thereof.
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Article Seven
Indemnification
Section A. Indemnification. The corporation shall indemnify each person who
is or was a director, officer or employee of the corporation, or of any other
corporation, partnership, joint venture, trust or other enterprise which he is
serving or served in any capacity at the request of the corporation, against any
and all liability and reasonable expense that may be incurred by him in
connection with or resulting from any claim, actions, suit or proceeding
(whether actual or threatened, brought by or in the right of the corporation or
such other corporation, partnership, joint venture, trust or other enterprise,
or otherwise, civil, criminal, administrative, investigative, or in connection
with an appeal relating thereto), in which he may become involved, as a party or
otherwise, by reason of his being or having been a director, officer or employee
of the corporation or of such other corporation, partnership, joint venture,
trust or other enterprise or by reason of any past or future action taken or not
taken in his capacity as such director, officer or employee, whether or not he
continues to be such at the time such liability or expense is incurred, to the
fullest extent permitted by the Indiana Business Corporation Law ("EBCL") as the
same now exists or may hereafter be amended (but in the case of any such
amendment only to the extent that such amendment permits the corporation to
provide broader indemnification rights than the EBCL permitted the corporation
to provide prior to such amendment).
Any indemnification pursuant to this Article Five shall be (unless ordered
by a court) paid by the corporation within sixty (60) days of such request
unless the corporation shall have determined by (a) the Board of Directors,
acting by a quorum consisting of directors who are not parties to or who have
been wholly successful with respect to such claim, action, suit or proceeding,
(b) outside legal counsel engaged by the corporation (who may be regular counsel
of the corporation) and who delivers to the corporation its written opinion, or
(c) a court of competent jurisdiction, that indemnification is not proper under
the circumstances because such person has not met the necessary standard of
conduct in accordance with IBCL; provided, however, that following a Change in
Control of the Corporation, with respect to all matters thereafter arising out
of acts, omissions or events prior to the Change in Control of the Corporation
concerning the rights of any person seeking indemnification hereunder, such
determination shall be made by special independent counsel selected by such
person and approved by the corporation (which approval shall not be unreasonably
withheld), which counsel has not otherwise performed services (other than in
connection with similar matters) within the five years preceding its engagement
to render such opinion for such person or for the corporation or any affiliates
(as such term is defined in Rule 405 under the Securities Act of 1933, as
amended) of the corporation (whether or not they were affiliates when services
were so performed) ("Independent Counsel"). Unless such person has theretofore
selected Independent Counsel pursuant to this Section A and such Independent
Counsel has been approved by the corporation, legal counsel approved by a
resolution or resolutions of the Board of Directors prior to a Change in Control
of the corporation shall be deemed to have been approved by the corporation as
required. Such Independent Counsel shall determine as promptly as practicable
whether and to what extent such person would be permitted to be indemnified
under applicable law and shall render its written opinion to the corporation and
such person to such effect; provided that such independent counsel shall find
that the standard for indemnification has been met by such person unless
indemnification is clearly precluded under these Bylaws or the IBCL. The
corporation agrees to pay the reasonable fees of the Independent Counsel
referred to above and to fully indemnify such Independent Counsel against any
and all expenses, claims, liabilities and damages arising out of or relating to
this Article or its engagement pursuant hereto.
For purposes of this Article, a "Change in Control of the Corporation" shall be
deemed to have occurred upon the first to occur of the following events:
i) any "person," as such term is used in Sections 13 (d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the corporation, any trustee or other fiduciary holding
securities under an employee benefit plan of the corporation or any
subsidiary of the corporation, or any corporation owned, directly or
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indirectly, by the stockholders of the corporation in substantially
the sairne proportions as their ownership of stock of the
corporation), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the corporation representing 30 percent or more of the combined
voting power of the corporation's then outstanding securities;
ii) at any time during any period of two consecutive years, individuals,
who at the beginning of such period constitute. the Board, and. any
new director (other than a director designated by a person who has
entered into an agreement with the corporation to effect a transaction
described in Subsection (i), (iii) or (iv) of this Section) whose
election by the Board or nomination for election by the corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any
reason to constitute at least a majority thereof,
iii)the stockholders of the corporation approve a merger or consolidation
of the corporation with any other corporation, other than (1) a merger
or consolidation which would result in the voting securities of the
corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50 percent of the
combined voting power of the voting securities of the corporation or
such surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the corporation (or similar transaction) in which
no person acquires 50 percent or more of the combined voting power of
the corporation's then outstanding securities, or
iv) the stockholders of the corporation approve a plan of complete
liquidation of the corporation or an agreement for the sale or
disposition by the corporation of all or substantially all of the
corporation's assets.
Section B. Expenses. Expenses, including attorneys' fees, incurred by a
person referred to in Section A of this Article in defending or otherwise being
involved in a proceeding shall be paid by the corporation in advance of the
final disposition of such proceeding, including any appeal therefrom, upon
receipt of an undertaking (the "Undertaking") by or on behalf of such person to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation.
Section C. Right of Claimant to Bring Suit. If a claim for indemnification
is not paid in full by the corporation within sixty (60) days after a written
claim has been received by the corporation or if expenses pursuant to Section B
hereof have not been advanced within ten (10) days after a written request for
such advancement accompanied by the Undertaking has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim or the advancement of
expenses. (If the claimant is successful, in whole or in part, in such suit or
any other suit to enforce a right for expenses or indemnification against the
corporation or any other party under any other agreement, such claimant shall
also be entitled to be paid the reasonable expense of prosecuting such claim.)
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required Undertaking has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the IBCL for the corporation to indemnify the claimant for
the amount claimed. After a Change in Control, the burden of proving such
defense shall be on the corporation, and any determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant had not met the applicable standard of conduct
required under the IBCL shall not be a defense to the action nor create a
presumption that claimant had not met such applicable standard of conduct,
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Section D. Non-Exclusivity of Rights. The rights conferred on any person by
this Article shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement vote of stockholders or disinterested directors
or otherwise. The Board of Directors shall have the authority, by resolution, to
provide for such other indemnification of directors, officers, employees or
agents as it shall deem appropriate.
Section E. Insurance. The corporation may purchase and maintain insurance
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expenses, liabilities or losses, whether or not the
corporation would have the power to indemnify such person against such expenses,
liabilities or losses under the IBCL.
Section F. Enforceability. The provisions of this Article shall be
applicable to all proceedings commenced after its adoption, whether such arise
out of events, acts, omissions or circumstances which occurred or existed prior
or subsequent to such adoption, and shall continue as to a person who has ceased
to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such person. This Article shall be deemed to
grant each person who, at any time that this Article is in effect, serves or
agrees to serve in any capacity which entitles him to indemnification hereunder
rights against the corporation to enforce the provisions of this Article, and
any repeal or other modification of this Article or any repeal or modification
of the IBCL or any other applicable law shall not limit any rights of
indemnification then existing or arising out of events, acts, omissions,
circumstances occurring or existing prior to such repeal or modification,
including, without limitation, the right to indemnification for proceedings
commenced after such repeal or modification to enforce this Article with regard
to acts, omissions, events or circumstances occurring or existing prior to such
repeal or modification.
Section G. Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer of the
corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the corporation, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the full extent permitted by applicable law.
9
Exhibit 4.1
_________________________________________________________________
ALLTRISTA CORPORATION
and
THE FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
______________________________
Rights Agreement
Dated as of March 22, 1993
and
as Amended and Restated as of
May 7, 1999
______________________________________________________________________________
<PAGE>
Table of Contents
Section Page
- ------- ----
1. Certain Definitions..................................................1
2. Appointment of Rights Agent..........................................6
3. Issue of Rights Certificates.........................................6
4. Form of Rights Certificates..........................................8
5. Countersignature and Registration....................................9
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates...........10
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......11
8. Cancellation and Destruction of Rights Certificates.................14
9. Reservation and Availability of Capital Stock.......................14
10. Preferred Stock Record Date..........................................16
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights.................................17
12. Certificate of Adjusted Purchase Price or
Number of Shares...................................................28
13. Share Exchange, Consolidation, Merger or Sale
or Transfer of Assets or Earning Power.............................28
14. Fractional Rights and Fractional Shares..............................32
15. Rights of Action.....................................................33
i
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Section Page
- ------- ----
16. Agreement of Rights Holders..........................................34
17. Rights Certificate Holder Not Deemed a Stockholder...................35
18. Concerning the Rights Agent..........................................35
19. Merger or Consolidation or Change of Name
of Rights Agent....................................................36
20. Duties of Rights Agent...............................................36
21. Change of Rights Agent...............................................39
22. Issuance of New Rights Certificates..................................40
23. Redemption and Termination...........................................41
24. Exchange.............................................................41
25. Notice of Certain Events.............................................43
26. Notices..............................................................44
27. Supplements and Amendments..........................................45
28. Successors..........................................................46
29. Determinations and Actions by the Board of Directors, etc...........46
30. Benefits of This Agreement..........................................46
31. Severability........................................................47
32. Governing Law.......................................................47
ii
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Section Page
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33. Counterparts.........................................................47
34. Descriptive Headings.................................................47
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
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RIGHTS AGREEMENT
----------------
RIGHTS AGREEMENT, dated as of March 22, 1993, between Alltrista
Corporation, an Indiana corporation (the "Company"), and The First Chicago Trust
Company of New York, a New York corporation (the "Rights Agent"), as amended and
restated as of May 7, 1999 (the "Agreement").
W I T N E S S E T H
WHEREAS, the Board of Directors of Ball Corporation, an Indiana corporation
of which the Company was a wholly owned subsidiary ("Ball"), approved the
distribution (the "Spin-Off Distribution") by Ball to the holders of common
stock, without par value, of Ball of all of the issued and outstanding common
stock, without par value (the "Common Stock"), of the Company owned by Ball
immediately prior to the Spin-Off Distribution; and
WHEREAS, the Board of Directors of the Company wished to provide for the
issuance of one Right for each share of Common Stock outstanding on March 22,
1993 (as such number may be adjusted pursuant to the provisions of Section 11(i)
or Section 11(p) hereof) or issued on or after March 22, 1993 and prior to
(whether originally issued or delivered from the Company's treasury) the
Distribution Date, and, in certain circumstances, after the Distribution Date,
each Right initially representing the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock of the Company having the
preferences and rights set forth in Exhibit A attached hereto, upon the terms
and subject to the conditions hereinafter set forth (the "Rights");
WHEREAS, on January 28, 1999, the Board of Directors determined to amend
and restate the original rights agreement and direct the Rights Agent to enter
into this amendment and restatement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
<PAGE>
(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 10% or more of the shares of Common Stock then outstanding,
but shall not include:
(i) the Company;
(ii) any Subsidiary of the Company;
(iii) any employee benefit plan of the Company or of any
Subsidiary of the Company and any Person organized, appointed or
established by the Company for or pursuant to the terms of any such
plan;
(iv) any Person who has reported or is required to report
such ownership (provided such Person does not beneficially own more
than fifteen percent (15%) of the shares of Common Stock then
outstanding) on Schedule 13G under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (or any comparable or successor
report) or on Schedule 13D under the Exchange Act (or any comparable
or successor report) which Schedule 13D does not state any intention
to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified in
Item 4 of such Schedule (other than the disposition of the Common
Stock) (a "Passive Investor"); or
(v) any Person who becomes the Beneficial Owner of ten (10%)
percent or more of the shares of Common Stock then outstanding (or a
Beneficial Owner of more than fifteen percent (15%) of the shares of
Common Stock then outstanding in the case of a Passive Investor) as a
result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the
Company unless and until such Person, after becoming aware that such
Person has become the Beneficial Owner of ten percent (10%) or more
(or more than fifteen percent (15%) in the case of a Passive Investor)
of the then outstanding shares of Common Stock, acquires beneficial
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<PAGE>
ownership of additional shares of Common Stock representing one
percent (1%) or more of the shares of Common Stock then outstanding.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or
(C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a)or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not
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<PAGE>
be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (c)) or disposing of any voting securities of the
Company;
provided, however, that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Illinois are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Chicago, Illinois, time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Chicago, Illinois, time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, without par
value, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
4
<PAGE>
(g) "Current Market Price" shall have the meaning ascribed to
such term in Section 11(d) hereof.
(h) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity.
(i) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company, and, to the
extent that there are not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, of the Company designated for such
purpose containing terms substantially similar to the terms of the Series A
Junior Participating Preferred Stock.
(j) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(k) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(l) "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.
(m) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.
(n) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
5
<PAGE>
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth
day after the Stock Acquisition Date, or (ii) the close of business on the tenth
business day (or such later date as the Board shall determine) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if, upon consummation
thereof, such Person would be the Beneficial Owner of 10% or more of the shares
of Common Stock then outstanding (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more right certificates,
in substantially the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of distribution of the Rights Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
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<PAGE>
(b) With respect to certificates for the Common Stock outstanding
as of the date of the Spin-Off Distribution until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7 hereof), the transfer of
any certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or delivered from the
Company's treasury) after March 22, 1993 but prior to the earlier of the
Distribution Date or the Expiration Date or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Alltrista
Corporation (the "Company") and The First Chicago Trust Company of New York
or its successor (the "Rights Agent") dated as of March 22, 1993, as from
time to time amended (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal corporate trust office of the Rights Agent. 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 after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
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<PAGE>
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the date of the Spin-Off Distribution and on their face shall
entitle the holders thereof to purchase such number of one one-hundredths of a
share of Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per one one-hundredth of a share, the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
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<PAGE>
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
The absence of the foregoing legend on any Rights Certificate shall in no
way affect any of the other provisions of the Agreement, including, without
limitation, the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman, its President or any
Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person who,
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<PAGE>
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates (other than Rights Certificates representing
Rights that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto
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a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
close of business on March 22, 2003 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof or (iii) the
time at which such Rights are exchanged pursuant to Section 24 hereof (the
earliest of clauses (i), (ii) and (iii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $45.00,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
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<PAGE>
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-hundredths of a share of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company. In the event that
the Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to
require, prior to the occurrence of a Triggering Event, that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
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(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of its respective
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
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Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities) or out
of its authorized and issued shares of Preferred Stock (and following the
occurrence of a Triggering Event, out of its authorized and issued shares of
Common Stock and/or other securities held in its treasury) held in its treasury,
the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement (including Section 11(a)(iii) hereof), will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
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(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined pursuant to this
Agreement (including Section 11(a)(iii) hereof), 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 "Act"), with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the 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. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
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(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
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Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open,
he or she would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event any Person at any time after the date of
the Spin-Off Distribution, shall become an Acquiring Person, unless
the event causing such Person to become an Acquiring Person is a
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transaction set forth in Section 13(a) hereof, or is 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 at least a majority of the members of the Board of
Directors who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to shareholders (taking into
account all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its shareholders,
then, promptly following such occurrence, proper provision shall be
made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of a number of one one-hundredths
of a share of Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which product,
following such first occurrence, shall thereafter be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares");
provided that the Purchase Price and the number of Adjustment Shares
shall be further adjusted as provided in this Agreement to reflect any
events occurring after the date of such first occurrence.
(iii) In the event that 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
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exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") and, (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of such Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock, such as the Preferred Stock,
which the Board of Directors of the Company has deemed to have
essentially the same value or economic rights as shares of Common
Stock (such shares or units of shares of preferred stock are herein
called "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value (less the amount
of any reduction in the Purchase Price), where such aggregate value
has been determined by the Board 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,
that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "Spread" shall mean
the excess of (i) the Current Value over (ii) the Purchase Price. If
the Board of Directors of the Company determines in good faith that it
is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent
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necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that
some action needs to be taken pursuant to the first and/or third
sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to
seek such shareholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the per share or per unit value of any
"Common Stock Equivalent" shall be deemed to equal the Current Market
Price per share of the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date) Preferred
Stock (or shares having the same rights, privileges and preferences as the
shares of Preferred Stock ("equivalent preferred stock")) or securities
convertible into Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the Current Market Price per share of
Preferred Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate offering
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price of the total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agents and 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 share of
Preferred Stock and the denominator of which shall be such Current Market Price
per share of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
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not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days (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 Market Price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
"Current Market Price" per share of the Common Stock is determined
during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and
prior to the commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have occurred
then, and in each such case, the "Current Market Price" shall be
properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or,
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<PAGE>
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 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 Common Stock, the fair value of such shares 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 Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board 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.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "Current Market Price" per
share of Preferred Stock shall be conclusively deemed to be an amount
equal to 100 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the
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Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "Current Market Price" per share
of the Preferred Stock 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. For all
purposes of this Agreement, the "Current Market Price" of one
one-hundredth of a share of Preferred Stock shall be equal to the
Current Market Price of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or one- millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised 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 one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
of a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days later than
the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
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Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredth of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredth of a share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one one-hundredth of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
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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 Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger, 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 shareholders of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 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) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the date of the Spin-Off
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Distribution and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator which
shall be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Share Exchange, 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 or shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
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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 more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by Section 13(d)
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, such number of validly authorized
and issued, fully paid, non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the Common Stock of
such Principal Party on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as 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.
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(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of the
Company are converted in such share exchange, merger or consolidation,
and if no securities are so issued, the Person that is the other party
to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will
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(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under 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.
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 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).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) 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 offer
or exchange offer for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii) hereof (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 offer 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(d), all Rights hereunder shall expire.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
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such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
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Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
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Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
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Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business or shareholder services of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice of any
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such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred Stock to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock or Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
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the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of Illinois (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of Illinois), in good standing,
having a principal office in the State of Illinois, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000 and which shall otherwise meet any requirements imposed by the New
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York Stock Exchange on transfer agents and registrars. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the Rights
Agreement or the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
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Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the close of business on the twentieth day
following the Stock Acquisition Date, or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$0.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
set forth in the first sentence of this Section 23(a) has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. 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
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Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of fifty percent (50%) or more of the 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 that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
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
which 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 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 any exchange pursuant to this Section 24, the Company, at
its option, may substitute shares of Preferred Stock (or equivalent preferred
stock, as such term is defined in paragraph (b) of Section 11 hereof) for shares
of Common Stock exchangeable for Rights, at the initial rate of one
one-hundredth of a share of Preferred Stock (or equivalent preferred stock) for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to Section 3(a) of the rights,
powers and preferences attached hereto as Exhibit A, so that the fraction of a
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share of Preferred Stock delivered in lieu of each share of Common Stock shall
have the same voting rights as one share of Common Stock.
(d) 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 authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) 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, there
shall be paid to the registered holders of the Right Certificates with regard to
which such fractional share 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 (e), 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 sentence of Section
11(d)(i) 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 Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any share exchanges
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
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which complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, share exchange,
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 Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining holders of
the shares of Preferred 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 Preferred Stock whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
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 Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Alltrista Corporation
5875 Castle Creek Parkway, North Drive, Suite 440
Indianapolis, Indiana 46250-4330
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
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sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The First Chicago Trust Company
of New York
30 West Broadway
New York, New York 10007
Attention: ____________________
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, 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 shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, 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,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than any Acquiring
Person and its Associates and Affiliates). Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
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Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 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, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
Section 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 Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
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<PAGE>
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
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 from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision requiring a majority of the
members of the Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of an Acquiring
Person to act is held by any court of competent jurisdiction or other authority
to be invalid, void or unenforceable, such determination shall be made by the
Board of Directors of the Company in accordance with applicable law and the
Company's certificate of incorporation and bylaws.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Indiana and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
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 and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: ALLTRISTA CORPORATION
By /s/ Judy Hamilton By /s/ Thomas B. Clark
--------------------------------- ---------------------------
Name: Judy Hamilton Name: Thomas B. Clark
Title: Exec Admin Asst. Title: President and CEO
Attest: THE FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By /s/ Marlene Kosek By /s/ Tammie J. Marshall
--------------------------------- ---------------------------
Name: Marlene Kosek Name: Tammie J. Marshall
Title: Administrative Assistant Title: Assistant Vice President
48
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Exhibit A
PREFERENCES AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
of
ALLTRISTA CORPORATION
The preferences, limitations, and relative voting and other
rights of the shares of the Series A Junior Participating Stock are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 250,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $5.00 or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, without
par value, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
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<PAGE>
fraction of a share of Series A Junior Participating Preferred Stock. In the
event the Corporation shall at any time after __________ __ , ____ (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Junior Participating 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 Junior Participating Preferred Stock as provided in paragraph (a)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $5.00 per share on the
Series A Junior Participating 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 Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating 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 Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
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Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
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voting as a class, irrespective of series, shall have the right to
elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(c) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised
unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default
period, they shall have the right, voting as a class, to elect
Directors to fill such vacancies, if any, in the Board of Directors as
may then exist up to two (2) Directors or, if such right is exercised
at an annual meeting, to elect two (2) Directors. If the number which
may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number. After
the holders of the Preferred Stock shall have exercised their right to
elect Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any shareholder
or shareholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
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of the holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this
paragraph (c)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him or her at his
or her last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than
20 days and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after such order
or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
(c)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next
annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (c)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose office shall
have become vacant. References in this paragraph (c) to Directors
elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
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<PAGE>
number of Directors shall be such number as may be provided for in the
certificate of incorporation or by-laws irrespective of any increase
made pursuant to the provisions of paragraph (c)(ii) of this Section 3
(such number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation or
by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Directors.
(d) Except as set forth herein, holders of Series A Junior
Participating 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.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating 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 Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating 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;
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(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Junior Participating
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.
5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
6. Liquidation, Dissolution or Winding Up. (a) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
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<PAGE>
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(c) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
A-8
<PAGE>
7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating 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.
8. Redemption. The shares of Series A Junior Participating
Preferred Stock shall be redeemable at a price equal to the product of (a) the
Current Market Price of the Common Stock and (b) the Adjustment Number.
9. Ranking. The Series A Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Amendment. The Restated Articles of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
A-9
<PAGE>
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
A-10
<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER MARCH __ , 200_ OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING 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.]*
Rights Certificate
ALLTRISTA CORPORATION
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 _________________ ____ , 199_ (the "Rights
Agreement"), between Alltrista Corporation, an Indiana corporation (the
"Company"), and The First
_______________________
* The portion of the legend in brakets shall be inserted only if applicable and
shall replace the preceding sentence.
B-1
<PAGE>
Chicago Trust Company of New York, a New York corporation (the "Rights Agent"),
to purchase from the Company at any time prior to 5:00 P.M. (Chicago, Illinois
time) on ____________ __ , 200_ at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $[ ] per one one-hundredth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of __________ ,
based on the Preferred Stock as constituted at such date. The Company reserves
the right to require prior to the occurrence of a Triggering Event (as such term
is defined in the Rights Agreement) that a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
B-2
<PAGE>
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of the
close of business on (i) the twentieth day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights Agreement), and (ii)
the Final Expiration Date. In addition, the Rights may be exchanged, in whole or
in part, for shares of Common Stock, or shares of preferred stock of the Company
having essentially the same value or economic rights as such shares. Immediately
upon the action of the Board of Directors of the Company authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder, as such, of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of shares
of Preferred 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
B-3
<PAGE>
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder 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 shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________ __, ____
ATTEST: ALLTRISTA CORPORATION
________________________________ By _____________________________
Secretary Title:
Countersigned:
THE FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By _____________________________
Authorized Signature
B-4
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
Please print social security or other identifying number of the transferor:
____________________________________________________________________________
FOR VALUE RECEIVED__________________________________________________________
hereby sells, assigns and transfers unto____________________________________
____________________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________________
(Please print social security or other identifying number of the transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ____________, _____
_______________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
B-5
<PAGE>
(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 Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: ____________, 19__
__________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: ALLTRISTA CORPORATION
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security or other identifying number:___________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number: ___________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ____________, 19__
__________________________________________
Signature
B-7
<PAGE>
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any Person.
Dated: ____________, 19__
__________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
B-8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM
THE UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AND STATEMENTS OF INCOME FOUND IN THE
COMPANY'S FORM 10-Q FOR THE
YEAR-TO-DATE, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-28-1999
<CASH> 2264
<SECURITIES> 0
<RECEIVABLES> 31329
<ALLOWANCES> 0
<INVENTORY> 53332
<CURRENT-ASSETS> 93294
<PP&E> 151067
<DEPRECIATION> 103565
<TOTAL-ASSETS> 173286
<CURRENT-LIABILITIES> 45485
<BONDS> 21429
0
0
<COMMON> 40446
<OTHER-SE> 56006
<TOTAL-LIABILITY-AND-EQUITY> 173286
<SALES> 51634
<TOTAL-REVENUES> 51634
<CGS> 39341
<TOTAL-COSTS> 47897
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 568
<INCOME-PRETAX> 3169
<INCOME-TAX> 1206
<INCOME-CONTINUING> 1963
<DISCONTINUED> 136
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2099
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
