<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Martin Marietta Corporation
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(Exact name of registrant as specified in its charter)
Maryland 52-1801551
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
6801 Rockledge Drive
Bethesda, Maryland 20817-1877
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
Common Stock Purchase Rights New York Stock Exchange, Inc.
Chicago Stock Exchange, Inc.
Pacific Stock Exchange,
Incorporated
Philadelphia Stock Exchange,
Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
- ------------------------------------------------------------------------------
(Title of Class)
Page 1 of 8 Pages
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Item 1. Description of Securities to be Registered.
------------------------------------------
On August 27, 1994, the Board of Directors of Martin Marietta
Corporation (the "Company") authorized the distribution of one Common Stock
Purchase Right (a "Right") for each outstanding share of common stock, par value
$1.00 per share (the "Common Stock"), of the Company. The distribution is to be
made as soon as practicable after September 9, 1994, to the stockholders of
record at the close of business on that date, and, in addition, the Company has
authorized the issuance of one Right with respect to each share of Common Stock
that shall become outstanding between September 9, 1994, and the earlier of the
Distribution Date or the Expiration Date (as such terms are hereinafter defined)
or the date, if any, on which Rights may be redeemed. When exercisable, each
Right entitles the registered holder to purchase from the Company one share of
Common Stock at a price of $190 per share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and the Rights Agent
(First Chicago Trust Company of New York and its successors).
Up to and including the earlier of 10 business days following (i) a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire, in a
transaction or series of transactions not approved in advance by the Board,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the date of such announcement being the "Stock Acquisition Date") or (ii) the
commencement of a tender or exchange offer by any person (other than the Company
or an employee benefit plan of the Company or any of its subsidiaries) for 30%
or more of the outstanding shares of Common Stock (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced by the
Common Stock certificates. So long as the Standstill Agreement, dated April 2,
1993, between the Company and General Electric Company is in effect, and General
Electric Company is not in material breach of the Standstill Agreement, notice
of which breach has been given to it by the Company, General Electric Company
will not be an "Acquiring Person."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the shares of Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after September 9, 1994, upon transfer or new
issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
Page 2 of 8 Pages
<PAGE>
expiration of the Rights), the surrender for transfer of any certificate for
Common Stock will also constitute the transfer of the Rights associated with
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights (the "Right
Certificates") will be mailed to holders of record of Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until after the date on which the
Company's right to redeem the Rights has expired. The Rights will expire
immediately prior to the consummation of the transactions contemplated by the
Agreement and Plan of Reorganization, dated as of August 29, 1994, among Parent
Corporation, the Company and Lockheed Corporation; provided, however, that if
such Agreement is terminated without consummation of the transactions
contemplated thereby, then at or prior to the close of business on September 9,
2004, or on such later date to which the Rights may be extended by the Company
(the "Expiration Date"), unless earlier redeemed by the Company.
The Purchase Price payable, and number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, Common Stock,
(ii) upon the grant to holders of Common Stock of certain rights or warrants to
subscribe for Common Stock or convertible securities at less than the current
market price of Common Stock or (iii) upon the distribution to holders of Common
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid or dividends payable in Common Stock) or of subscription rights
or warrants (other than those referred to above).
In the event that, at any time after the tenth business day after a
Stock Acquisition Date, the Company is acquired in a merger or other business
combination transaction or 50% or more of its assets or earning power is sold,
proper provision shall be made so that each holder of a Right (except as noted
below), shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the exercise price of the Right. In the event that
the Company is the surviving corporation in a merger and Common
Page 3 of 8 Pages
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Stock was not changed or exchanged, or in the event that an Acquiring Person
engages with the Company in one or more self-dealing transactions specified in
the Rights Agreement, proper provision shall be made so that each holder of a
Right (except as noted below) shall thereafter have the right to receive upon
exercise that number of shares of Common Stock of the Company having a market
value of two times the exercise price of the Right. In addition, in the event
that a person or group of affiliated or associated persons becomes an Acquiring
Person, then proper provision shall be made so that each holder of a Right
(except as noted below) shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of Common Stock of the Company which at the time of the transaction would
have a market value of two times the exercise price of the Right.
The holder of any Rights that are, or were, beneficially owned by an
Acquiring Person or an affiliate or associate thereof or certain transferees
thereof which engaged in, or realized the benefit of, an event or transaction or
transactions described in the immediately preceding paragraph, shall be entitled
to exercise such holder's Rights, but without the two-for-one benefit described
in the immediately preceding paragraph.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof an
adjustment in cash will be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
Up to and including the tenth business day after a Stock Acquisition
Date, the Company may redeem the rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Immediately upon the action of the
Board of Directors of the Company electing to redeem the Rights, the Company
shall make an announcement thereof and, upon such announcement, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
As soon as practicable after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
Page 4 of 8 Pages
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At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person and until the beneficial ownership level of
such Acquiring Person, together with all affiliates and associates of such
Acquiring Person, reaches 50%, the Board of Directors of the Company may
exchange the Rights, in whole or in part, at an exchange ratio of one share of
Common Stock (or shares of preferred stock or principal amount of debt
securities having equivalent market value, as determined in good faith by the
Board of Directors) per Right.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
As of July 31, 1994, there were 95,948,640 shares of Common Stock
issued and outstanding and 33,647,916 shares which may be issued pursuant to
----------
the exercise of stock options and the conversion of outstanding Series A
Preferred Stock. There will be distributed to stockholders of the Company one
Right for each share of Common Stock owned of record by them on September 9,
1994. As long as the Rights are attached to the Common Stock, the Company will
issue one Right with each new share of Common Stock so that all such shares will
have attached Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by its Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors since the Rights may be redeemed by the Company at $.01 per
Right up to September 9, 2004 and including the tenth day after the public
announcement that a person or group of affiliated or associated persons has
acquired or obtained the right to acquire ownership of 15% or more of the Common
Stock.
The Rights Agreement dated as of August 29, 1994 between the Company
and First Chicago Trust Company of New York, as Rights Agent, specifying the
terms of the Rights (which includes exhibits attached thereto), is attached
hereto as an exhibit and is incorporated herein by reference. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibit.
Page 5 of 8 Pages
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Item 2. Exhibit.
-------
1. Rights Agreement dated as of August 29, 1994 between Martin
Marietta Corporation and First Chicago Trust Company of New York,
as Rights Agent, which includes the form of Right Certificate
(and forms of assignment and election to purchase relating
thereto) as Exhibit A and the Summary of Rights to Purchase
Common Stock as Exhibit B.
Page 6 of 8 Pages
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MARTIN MARIETTA CORPORATION
INDEX TO EXHIBITS
The following exhibit is filed with this Registration Statement:
<TABLE>
<CAPTION>
Page Number in
Sequentially Num-
bered Copy of the
Exhibit Registration
No. Statement
- --------- -------------------
<S> <C> <C>
1 Rights Agreement dated as of August
29, 1994 between Martin Marietta
Corporation and First Chicago Trust
Company of New York, as Rights
Agent, which includes the form of
Right Certificate (including the
forms of assignment and election to
purchase relating thereto) as
Exhibit A and the Summary of Rights
to Purchase Common Stock as Exhibit
B.
</TABLE>
Page 7 of 8 Pages
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
MARTIN MARIETTA CORPORATION
/s/ Lillian M. Trippett
By:__________________________
Name: Lillian M. Trippett
Title: Corporate Secretary
Dated: September 1, 1994
Page 8 of 8 Pages
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EXHIBIT 1
===============================================================================
MARTIN MARIETTA CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
Rights Agent
__________
Rights Agreement
Dated as of August 29, 1994
==============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 1. Certain Definitions........................ 1
Section 2. Appointment of Rights Agent................ 6
Section 3. Issue of Right Certificates................ 6
Section 4. Form of Right Certificates................. 9
Section 5. Countersignature and Registration.......... 11
Section 6. Transfer, Split Up, Combination and Ex-
change of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certifi-
cates...................................... 12
Section 7. Exercise of Rights; Purchase Price; Expira-
tion Date of Rights........................ 13
Section 8. Cancellation and Destruction of Right Cer-
tificates.................................. 18
Section 9. Reservation and Availability of Shares of
Common Stock............................... 18
Section 10. Common Stock Record Date................... 21
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights................. 22
Section 12. Certification of Adjusted Purchase Price or
Number of Shares........................... 41
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power................. 42
Section 14. Fractional Rights and Fractional Shares.... 46
Section 15. Rights of Action........................... 47
Section 16. Agreement of Right Holders................. 48
Section 17. Right Certificate Holder Not Deemed a
Stockholder................................ 49
Section 18. Concerning the Rights Agent................ 50
Section 19. Merger or Consolidation or Change of Name
of Rights Agent............................ 51
</TABLE>
i
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 20. Duties of Rights Agent..................... 52
Section 21. Change of Rights Agent..................... 55
Section 22. Issuance of New Right Certificates......... 57
Section 23. Redemption................................. 58
Section 24. Notice of Proposed Actions................. 58
Section 25. Notices.................................... 60
Section 26. Supplements and Amendments................. 61
Section 27. Successors................................. 61
Section 28. Benefits of this Agreement................. 61
Section 29. Governing Law.............................. 62
Section 30. Counterparts............................... 62
Section 31. Severability............................... 62
Section 32. Descriptive Headings....................... 63
Exhibit A [Form of Right Certificate]................ 1
Exhibit B SUMMARY OF RIGHTS TO PURCHASE COMMON
STOCK...................................... 1
</TABLE>
ii
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RIGHTS AGREEMENT
----------------
This Agreement, dated as of August 29, 1994, between Martin Marietta
Corporation, a Maryland corporation (the "Company"), and First Chicago Trust
Company of New York, a New York corporation (the "Rights Agent"):
W I T N E S S E T H
-------------------
WHEREAS, the Board of Directors of the Company has authorized the
distribution of one right for each share of Common Stock of the par value of
$1.00 per share of the Company ("Common Stock") outstanding on September 9, 1994
and has authorized the issuance of one right with respect to each share of
Common Stock that shall become outstanding between September 9, 1994 and the
earlier of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined) or the date, if any, on which such rights may be redeemed,
each right representing the right to purchase one share of Common Stock upon the
terms and subject to the conditions hereinafter set forth (a "Right").
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 a Substantial Block of Common Stock but shall not include (i) any employee
benefit plan of the Company or any of its subsidiaries, (ii) General Electric
Company (but only so long as (A) the Standstill Agreement, dated April 2, 1993,
between the Company and General Electric Company (the "Standstill Agreement")
remains in effect, and (B) General Electric Company shall not be in material
breach of the Standstill Agreement, notice of which breach has been given to it
by the Company specifying that as a result thereof it is no longer excluded from
the definition of "Acquiring Person" set forth in this clause (a)) or (iii) any
Person who acquires a Substantial Block of Common Stock in connection with a
transaction or series of transactions approved prior to such transaction or
series of transactions by the Board of Directors of the Company.
(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 Securities Exchange Act of 1934, as in effect as of the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
2
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(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of any conversion,
exchange or purchase rights (other than the Rights), warrants or options,
or otherwise, provided, however, that a Person shall not be deemed the
-------- -------
Beneficial Owner of securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
payment, or (B) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any securities of the
Company;
provided, however, that (x) a Person shall not be deemed the Beneficial Owner
- -------- -------
of, or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Securities Exchange
3
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Act of 1934, as amended (the "Exchange Act"), and (2) is not also then
reportable on Schedule 13D (or any comparable or successor report) under the
Exchange Act, and (y) nothing in this subsection 1(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 day on which banking institutions in the State of New York 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., New
York City time, on such date; provided, however, that if such date is not a
-------- -------
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(f) "Common Stock" shall have the meaning assigned to it in the
recital, and "common stock" when used with reference to any Person other than
the Company shall mean the common stock with the greatest voting power of such
Person or, if such Person is a subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person.
(g) "Current Value" shall have the meaning assigned to it in Section
11(a)(iii).
4
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(h) "Distribution Date" shall have the meaning assigned to it in
Section 3.
(i) "Exchange Act" shall have the meaning assigned to it in Section
1(c).
(j) "Expiration Date" shall have the meaning assigned to it in Section
7.
(k) "Person" shall mean any individual, firm, corporation or other
entity.
(l) "Purchase Price" shall have the meaning assigned to it in Section
4.
(m) "Redemption Price" shall have the meaning assigned to it in
Section 23.
(n) "Section 11(a)(ii) Trigger Date" shall have the meaning assigned
to it in Section 11(a)(iii).
(o) "Spread" shall have the meaning assigned to it in Section
11(a)(iii).
(p) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(q) "Substantial Block" shall mean a number of shares of Common Stock
which equals or exceeds 15% of the number of shares of Common Stock then
outstanding.
(r) "Substitution Period" shall have the meaning assigned to it in
Section 11(a)(iii).
(s) "Trading Day" shall have the meaning assigned to it in Section
11(d).
5
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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, shall prior to the Distribution Date also be
the holders of 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 Agent or Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Up to and including the
---------------------------
earlier of (i) the tenth Business Day after a Stock Acquisition Date or (ii) the
tenth Business Day after the date of the commencement of a tender or exchange
offer (as determined by reference to Rule 14d-2(a) (or any successor rule) under
the Exchange Act) by any Person (other than the Company or any employee benefit
plan of the Company or any of its subsidiaries) for 30% or more of the
outstanding Common Stock (the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced by the certificates
for Common Stock registered in the names of the holders of Common Stock (which
certificates for Common Stock shall be deemed also to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the Rights Agent
will mail, by first-class, insured, postage prepaid mail, to each record
6
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holder of Common Stock as of the Close of Business on the Distribution Date, as
shown by the records of the Company at the Close of Business on the Distribution
Date, at the address of such holder shown on such records, a Right Certificate,
in substantially the form of Exhibit A hereto, evidencing one Right for each
share of Common Stock so held.
(b) As soon as practicable after September 9, 1994, the Company will
send or cause to be sent a copy of a Summary of Rights to Purchase Common Stock
("Summary of Rights"), in substantially the form attached hereto as Exhibit B,
by first-class mail, postage prepaid, to each record holder of Common Stock as
of the Close of Business on September 9, 1994 at the address of such holder
shown on the records of the Company.
(c) As soon as practicable, the Company will cause certificates for
Common Stock issued after the date of this Agreement, but prior to the earlier
of the Distribution Date or the Expiration Date or the date, if any, on which
the Rights may be redeemed, to have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also entitles the holder hereof to certain Rights as set
forth in a Rights Agreement between Martin Marietta Corporation and First
Chicago Trust Company of New York, dated as of August 29, 1994, as the same
shall be amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Martin Marietta Corporation.
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. Martin Marietta Corpo-
7
<PAGE>
ration will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
Under certain circumstances 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) or one of certain transferees thereof, whether
currently held by or on behalf of such Person or by any subsequent holder,
may be limited as provided in Sections 7(e) and (11)(n) of the Rights
Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the transfer of
any such certificates shall also constitute the transfer of the Rights
associated with the Common Stock certificate. In the event that the Company
purchases or otherwise acquires any of its shares of Common Stock after
September 9, 1994, but prior to the earliest of the Distribution Date or the
Expiration Date or the date, if any, on which the Rights may be redeemed, any
Rights associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock that are no longer outstanding.
(d) Until the Distribution Date, the surrender for transfer of any of
the certificates for Common Stock outstanding on or after September 9, 1994,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with Common Stock
8
<PAGE>
represented by such certificate. After the Distribution Date, the Rights will
be evidenced solely by the Right Certificates.
Section 4. Form of Right Certificates. (a) The Right Certificates
--------------------------
(and the forms of assignment and of election to purchase shares to be printed on
the reverse thereof) shall be in substantially the form of Exhibit A hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of Section
22, the Right Certificates, whenever issued, shall be dated as of September 9,
1994, and on their face shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein at the price per
share set forth therein (the "Purchase Price"), but the amount and type of such
securities and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 that represents Rights Beneficially Owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person,
9
<PAGE>
(ii) a transferee of an Acquiring Person (or of any such Associate of
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 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), and any Right Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain
(to the extent feasible and reasonably identifiable as such) the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) or one of certain transferees
thereof. Accordingly, under certain circumstances as provided in the
Rights Agreement, this Right Certificate and the rights represented
hereby may be limited
10
<PAGE>
as provided in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) The Right
---------------------------------
Certificates shall be executed on behalf of the Company by its Chairman and
Chief Executive Officer, its President or any Vice President, either manually or
by facsimile signature, and 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 Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
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 stock
11
<PAGE>
transfer office, which as of the date hereof is located at 525 Washington
Boulevard, 3rd Floor, Jersey City, New Jersey 07310, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each Right Certificate, the date of
each Right Certificate and the number of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
- ---------------------------------------------------------------------
Subject to the provisions of Section 7(e) and Section 14, at any time after the
Close of Business on the Distribution Date, and prior to the Close of Business
on the Expiration Date or the day prior to the day, if any, on which the Rights
are to be redeemed pursuant to Section 23, any Right Certificate or Certificates
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
such number of shares of Common Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal stock transfer office of the Rights
Agent. Thereupon the Rights Agent shall, subject to Section
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<PAGE>
7(e) and Section 14, countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate, if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
------------------------------------------------------
Rights. (a) Subject to Section 7(e) and unless earlier redeemed as provided in
- ------
Section 23, the registered holder of any Right Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the date on which
the Company's right to redeem the Rights has expired upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal stock transfer
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<PAGE>
office of the Rights Agent, together with payment of the Purchase Price for each
share of Common Stock (or other shares, securities or property, as the case may
be) as to which the Rights are exercised, prior to (but in no event upon or
after) the consummation of the transactions contemplated by the Agreement and
Plan of Reorganization, dated as of August 29, 1994, among Parent Corporation,
the Company and Lockheed Corporation; provided, however, that if such Agreement
is terminated without consummation of the transactions contemplated thereby,
then at or prior to the Close of Business on September 9, 2004, or such other
date to which the Rights may be extended (the time and date on which the right
to exercise the Rights terminates is the "Expiration Date").
(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $190, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 and shall be payable in lawful
money of the United States of America.
(c) Upon receipt of a Right Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
shares (or other securities or property, as the case may be) to be purchased and
an amount equal to any applicable transfer tax in cash, or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of Common Stock a
certificate for the number of shares of Common Stock to be purchased
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<PAGE>
(or under certain circumstances as contemplated by Section 11(a)(iii), from any
transfer agent of shares of other capital stock of the Company a certificate for
the number of shares of such other capital stock to be purchased) and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of a fractional share in accordance with Section
14 and (iii) promptly after receipt of such certificate, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a)(iii), the Company
will make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
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<PAGE>
(e) Notwithstanding any provision of this Agreement to the contrary,
upon the occurrence of any of the events described in subparagraphs (A), (B), or
(C) of Section 11(a)(ii), or clauses (a), (b) or (c) of the first sentence of
Section 13, any Rights that are at the time of the occurrence of such event
Beneficially Owned by (i) an Acquiring Person or by any Associate or Affiliate
of such Acquiring Person or (ii) a transferee of an Acquiring Person or of any
Associate or Affiliate of such Acquiring Person (A) who becomes a transferee
after the Acquiring Person becomes such, or (B) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (1) 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 such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (2) 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 be exercisable for shares of Common Stock,
or other shares, securities or property, as the case may be, (if Section
11(a)(ii) is applicable) or shares of common stock of the Principal Party (as
defined in Section 13) (if Section 13 is applicable) except that for purposes of
determining the amount of shares, securities or property, as the case may be,
issuable to such Person as provided for in Section 11(a)(ii)
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<PAGE>
or Section 13, the 50% figure in clause (y) of Section 11(a)(ii), and the 50%
figure in clause (y) of Section 13(A) shall be 100%.
In lieu of such adjustments:
(i) If Section 11(a)(ii) is applicable, each holder of such Rights
shall thereafter have the right to receive upon exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
the number of shares of Common Stock as set forth on the holder's Right
Certificate, subject to the adjustments as provided in this Agreement,
except with respect to the adjustments provided for in Section 11(a)(ii);
and
(ii) If Section 13 is applicable, each holder of such Rights 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 shares of common stock of the Principal Party as shall, based on
the current market price per share of the common stock of the Principal
Party (determined in the same manner as the current market price of Common
Stock is determined under Section 11(d)) on the date of consummation of the
events described in Section 13, have a value equal to the Purchase Price.
The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Right Certificates or other Person as a
result of
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<PAGE>
its making or failing to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
Section 8. Cancellation and Destruction of Right Certificates. All
--------------------------------------------------
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock.
------------------------------------------------------
(a) The Company covenants and agrees that it shall (i) cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock (and/or
other shares of capital stock or securities) or its authorized and issued shares
of Common Stock (and/or other shares of capital stock or securities) held in its
treasury, the number
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<PAGE>
of shares of Common Stock (and/or other shares of capital stock or securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights, (b) take all such action as may be necessary to insure that all shares
of Common Stock (and/or other shares of capital stock or securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares or securities (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable and (c) 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 Right
Certificates or of any shares of Common Stock (and/or other shares of capital
stock or securities) 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 involved in the transfer or delivery of Right Certificates or the
issuance or delivery of certificates for Common Stock (and/or other shares of
capital stock or securities) in a name other than that of the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates for shares of Common Stock (and/or other shares of
capital stock or securities) upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
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<PAGE>
(b) So long as Common Stock (and/or other shares of capital stock or
securities) issuable upon the exercise of Rights is listed on any national
securities exchange, the Company shall use its reasonable efforts to cause all
shares or other securities reserved for issuance upon exercise of Rights to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of an event
described in Section 11(a)(ii) in which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
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"), in respect of 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 Expiration Date or (B) the date, if any, on which the Rights may be
redeemed. The Company shall also take such action as may be appropriate under,
or to ensure compliance with, the securities or "blue sky" laws of all the
states required in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a
20
<PAGE>
period of time not to exceed 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 notify the Rights Agent
and issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a notice to the Rights Agent and
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of the Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained. 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 and
notify the Rights Agent thereof until such time as a registration statement has
been declared effective, notice of which shall be delivered to the Rights Agent.
Section 10. Common Stock Record Date. Each Person in whose name any
------------------------
certificate for shares of Common Stock (and/or other shares of capital stock or
securities) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Stock (and/or other
shares of capital stock or securities) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights
21
<PAGE>
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such surrender
-------- -------
and payment is a date upon which the Common Stock (and/or other shares of
capital stock or securities) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Common Stock (and/or other shares of capital stock or securities) transfer books
of the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
stockholder 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.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
--------------------------------------------------------
of Rights. The Purchase Price, the number 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 Common Stock (and/or other shares of
capital stock or securities) payable in shares of Common Stock (and/or other
shares of capital stock or securities), (B) subdivide the outstanding
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<PAGE>
Common Stock (and/or other shares of capital stock or securities), (C) combine
the outstanding Common Stock (and/or other shares of capital stock or
securities) into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Common Stock (and/or other shares of
capital stock or securities) (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock (and/or other shares of capital stock
or securities) transfer books of the Company were open, the holder would have
received 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 Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) In the event
23
<PAGE>
(A) at any time after the tenth Business Day after a Stock
Acquisition Date, directly or indirectly, any Person (other than a
wholly owned subsidiary of the Company) shall merge into the Company
or any of its subsidiaries or otherwise combine with the Company or
any of its subsidiaries and the Company or such subsidiary shall be
the continuing or surviving corporation of such merger or combination
or any Person shall sell or otherwise transfer, in one or more
transactions, assets to the Company or any of its subsidiaries in
exchange for 50% or more of the shares of any class of capital stock
of the Company or any of its subsidiaries, and Common Stock of the
Company shall remain outstanding and unchanged, or at any time after
the date of this Agreement, directly or indirectly, any Acquiring
Person shall (1) in one or more transactions, transfer any assets to
the Company or any of its subsidiaries in exchange (in whole or in
part) for shares of any class of capital stock of the Company or any
of its subsidiaries or for securities exercisable for or convertible
into shares of any class of capital stock of the Company or any of its
subsidiaries or otherwise obtain from the Company or any of its
subsidiaries, with or without consideration, any additional shares of
any class of capital stock of the Company
24
<PAGE>
or any of its subsidiaries or other securities exercisable for or
convertible into shares of any class of capital stock of the Company
or any of its subsidiaries (other than as part of a pro rata
distribution to all holders of Common Stock), (2) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise dispose (in
one or more transactions), to, from or with, as the case may be, the
Company or any of its subsidiaries, assets on terms and conditions
less favorable to the Company or such subsidiary than the Company or
such subsidiary would be able to obtain in arm's-length negotiation
with an unaffiliated third party, (3) receive any compensation from
the Company or any of its subsidiaries other than compensation for
full-time employment as a regular employee, or fees for serving as
director, at rates in accordance with the Company's (or its
subsidiaries') past practices, or (4) receive the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance provided
by the Company or any of its subsidiaries or
(B) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger,
25
<PAGE>
share exchange or consolidation of the Company with any of its
subsidiaries or any other similar transaction or series of
transactions involving the Company or any of its subsidiaries (whether
or not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class of
equity securities or of securities exercisable for or convertible into
equity securities of the Company or any of its subsidiaries which is
directly or indirectly owned by any Acquiring Person or any Associate
or Affiliate of any Acquiring Person, or
(C) 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, General Electric Company (but only so long as it would
not be an "Acquiring Person") or any Person who acquires a Substantial
Block in connection with a transaction or series of transactions
approved prior to such transaction or transactions by the Board of
Directors of the Company), either alone or together with its
Affiliates and Associates, becomes the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding;
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below and for
26
<PAGE>
holders specified in Section 7(e), shall thereafter (but in the case of an event
referred to in Clauses (B) and (C), not until the Rights are exercisable) have
the right to receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of shares of Common
Stock as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of shares of Common Stock for which a Right is
then exercisable and dividing that product by (y) 50% of the current market
price per share of Common Stock (determined pursuant to Section 11(d)) on the
date of the occurrence of any one of the events listed above in this
subparagraph (ii).
(iii) In the event that the number of shares of Common Stock that are
authorized by the Company's charter but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not sufficient to permit
the exercise in full of the Rights in accordance with the foregoing Section
11(a)(ii), the Company shall (A) determine the excess of (1) the value of the
shares of Common Stock issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess being hereinafter referred to
as the "Spread"), and (B) in respect of each Right, make adequate provision to
substitute for the shares of Common Stock so issuable, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred
27
<PAGE>
stock that the Board of Directors of the Company has determined to have the same
value as the shares of Common Stock (such shares of preferred stock being
referred to herein as "common share equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, that if the Company shall not have made
-------- -------
adequate provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of an event described in Section
11(a)(ii) and (y) the date on which the Company's right of redemption pursuant
to Section 23 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 of the Company (to the
extent available) and, if necessary, cash, that in the aggregate are equal to
the Spread. If the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of Common Stock of the
Company could be authorized for issuance upon exercise in full of the Rights,
the 30-day period set forth above may be extended to the extent necessary, but
not to more than 120 days following the
28
<PAGE>
first occurrence of a Section 11(a)(ii) Trigger Date so that the Company may
seek stockholder approval for the authorization of such additional shares of
Common Stock of the Company (such period, as it may be extended, being
hereinafter referred to as the "Substitution Period"). To the extent the
Company determines that some action need be taken pursuant to the first and/or
second 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 to seek any authorization of
additional shares of Common Stock of the Company 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 deliver notice to the Rights Agent and issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as notice to the Rights Agent and 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 the shares of Common Stock shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Common Stock on the
date of the first occurrence of a Section 11(a)(ii) Trigger Date and the value
of any common share equivalent shall be deemed to have the same value as a share
of Common Stock on such date.
29
<PAGE>
(b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of shares of Common Stock entitling them (for
a period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Stock (or securities convertible into Common Stock) at a
price per share of Common Stock (or having a conversion price per share, if a
security convertible into Common Stock) less than the current market price per
share of Common Stock (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common 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 of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities to be offered are initially convertible). In case such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the
30
<PAGE>
Company, whose determination shall be described in a statement filed with the
Rights Agent. Shares of Common Stock owned by or held for the account of the
Company or any of its subsidiaries 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 the making of a
distribution to all holders of shares of Common 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 or assets
(other than a regular periodic cash dividend at a rate not in excess of 125% of
the rate of the last cash dividend theretofore paid or a dividend payable in
Common Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the current
market price per share of Common Stock (as defined in Section 11(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
31
<PAGE>
evidences of indebtedness so to be distributed, or of such subscription rights
or warrants applicable, to one share of Common Stock, and of which the
denominator shall be such current market price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, 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 30
consecutive Trading Days immediately prior to such date; provided, however, that
-------- -------
in the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock, and prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the current market price
per share of Common Stock. 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
32
<PAGE>
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the 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").
If on any such date the shares of Common Stock are not quoted by any such
organization, the fair value of such shares on such date as determined in good
faith by the Board of Directors of the issuer of such Common Stock 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 Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions
in the State of New York are not authorized or obligated by law or executive
order to close. 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
33
<PAGE>
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.
(e) Except as hereinafter provided, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
-------- -------
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the
nearest one-hundredth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(f) In the event that at any time, as a result of an adjustment made
pursuant to Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13
34
<PAGE>
with respect to the shares of Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest onehundredth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of
35
<PAGE>
shares of Common 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-hundredth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
36
<PAGE>
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the shares of Common Stock
issuable upon exercise of the Rights, the Company shall take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
such Common 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 issuing to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock
37
<PAGE>
or securities of the Company, if any, issuable upon such exercise over and above
the shares of Common 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 upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any Common Stock at less than the current market price, issuance
wholly for cash of Common Stock or securities which by their terms are
convertible into or exchangeable for Common Stock, stock dividends or issuance
of rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such stockholders.
(n) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, order the exchange of Common
Stock for all or part of the then outstanding and exercisable Rights (except for
the
38
<PAGE>
Rights with respect to which the adjustment provisions of Section 11(a)(ii)
shall not apply as provided in Section 7(e)) 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 or employee stock plan of
the Company), together with all Affiliates and Associates of such Person,
becomes the beneficial owner of 50% or more of the Common Stock then
outstanding.
Immediately upon the action of the Board of Directors of the Company
ordering the exchange of Common Stock for Rights pursuant to this Section 11(n)
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
39
<PAGE>
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 with respect to which the adjustment provisions of Section
11(a)(ii) shall not apply as provided in Section 7(e)) held by each holder of
Rights.
In any exchange pursuant to this Section 11(n), the Company, at its
option, may, wholly or partially, in lieu of issuing one share of Common Stock
per Right (subject to adjustment as aforesaid), wholly or partially issue that
number of shares of preferred stock of the Company or that principal amount of
debt securities of the Company per Right as the Board of Directors in good faith
determines to have a market value equal at the time of such exchange to the
market value of the share or shares of Common Stock issuable in exchange for
each Right.
The Company shall not be required to issue fractions of shares of
Common Stock or preferred stock or debt securities in a principal amount of less
than $100 (the "Fractional Interests") or to distribute certificates which
evidence Fractional Interests. In lieu of such Fractional Interests, the
Company shall pay to the registered holders of the Right
40
<PAGE>
Certificates, with regard to which such Fractional Interests would otherwise be
issuable, the fair market value of the Fractional Interest as determined in good
faith by the Board of Directors, which, in the case of fractional shares of
Common Stock, would be 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
Section 11(n), 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) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 11(n).
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any subsidiary of the Company 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.
Section 12. Certification of Adjusted Purchase Price or Number of
-----------------------------------------------------
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
- ------
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate and (c)
41
<PAGE>
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power. In the event, at any time after the tenth Business Day after a
- -------------
Stock Acquisition Date, directly or indirectly, (a) the Company shall
consolidate with, or merge with and into, any other Person, (b) any other
Person, shall consolidate, merge with and into the Company and the Company shall
be the continuing or surviving corporation of such merger, engage in a share
exchange with the Company, and, in connection with such consolidation, merger or
share exchange, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more of
its subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) to any other Person then,
and in each such case:
(A) except as provided in Section 7(e), proper provision shall be
made so that (i) each holder of a Right 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 shares of common stock of the Principal Party (as
hereinafter
42
<PAGE>
defined) as shall be equal to the result obtained by (x) multiplying
the then-current Purchase Price by the number of shares of Common
Stock for which a Right is then exercisable and dividing that product
by (y) 50% of the current market price per share of the common stock
of the Principal Party (determined in the same manner as the current
market price of Common Stock is determined under Section 11(d)) on the
date of consummation of such consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (iv) the Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its common stock in accordance with Section 9) in
connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its common stock
thereafter deliverable upon the exercise of the Rights; and
(B) "Principal Party" shall mean
---------------
43
<PAGE>
(1) in the case of any transaction described in (a) or (b)
of the first sentence of this Section 13, the Person that is
the issuer of any securities into which shares of Common Stock
are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to
the merger or consolidation;
(2) in the case of any transaction described in (c) of the
first sentence of this Section 13, the Person that is the other
party to such transaction;
provided, however, that in any such case, (w) if the common stock of such Person
- -------- -------
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary of another corporation the common stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation, (x) if the common stock of such Person is not and has not been so
registered and such Person is not a direct or indirect subsidiary of another
corporation the common stock of which is and has been so registered, "Principal
Party" shall refer to the corporation which ultimately controls such Person, (y)
in case such Person is a subsidiary, directly or indirectly, of more than one
corporation, the common stocks of all of which are and have been so registered,
"Principal Party" shall refer
44
<PAGE>
to whichever of such corporations is the issuer of the common stock having the
greatest market value of shares held by the public, and (z) in case such Person
is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (w) - (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
subsidiary of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests; and provided, further, that in no case may the Company
-------- -------
consummate any such consolidation, merger, share exchange, sale or transfer if
(i) at the time of or immediately after such transaction 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 (ii) prior to, simultaneously with or
immediately after such transaction, the shareholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of this
Section 13, shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
The Company shall not consummate any such consolidation, merger, share
exchange, sale or transfer unless prior thereto the Company and such issuer
shall have executed and
45
<PAGE>
delivered to the Rights Agent a supplemental agreement making valid provision
for the result described in subsection (A) above. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
---------------------------------------
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. If the Company shall determine
not to issue such fractional Rights, in lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with
46
<PAGE>
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 average
of the high bid and low asked prices in the over-the-counter market, as reported
by NASDAQ. If on any such date the Rights are not quoted by any such
organization, 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
upon exercise of the Rights or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall pay to the
registered holders of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share of Common Stock. For purposes of this Section
14, the current market value of a 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)) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
----------------
this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the
47
<PAGE>
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
any registered holder of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, any registered holder of the Common Stock), may, on his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
--------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
48
<PAGE>
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent and then if
surrendered at the principal stock transfer office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
-------------------------------------------------
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common 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
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice
49
<PAGE>
of meetings or other actions affecting stockholders (except as provided in
Section 24), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to
---------------------------
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and 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 Right 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
50
<PAGE>
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
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
stock transfer business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned,
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
51
<PAGE>
shall have the full force provided in the Right 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 Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. 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 Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the 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 be
proved or established by
52
<PAGE>
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 and Chief Executive Officer, 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 Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be
53
<PAGE>
responsible for any adjustment required under the provisions of Sections 11 or
13 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 Right Certificates
after actual notice of any 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 other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Common Stock or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or 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 and Chief Executive Officer, 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
54
<PAGE>
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though 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 reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
----------------------
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor
55
<PAGE>
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of Common
Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (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 New York) in good standing, having its principal stock transfer office
in the State of New York, which is authorized under such laws to exercise stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
56
<PAGE>
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 Common Stock, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Expiration Date, the Purchase Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
57
<PAGE>
Section 23. Redemption. The Company may, at its option and as
----------
provided herein, elect to redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right (such redemption price being
hereinafter referred to as the "Redemption Price") at any time up to and
including the tenth Business Day after a Stock Acquisition Date. Immediately
upon the action of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make a public announcement thereof, and from and after
the date of such announcement, without any further action and without any
further notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. As soon as practicable after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent. 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. Notice of Proposed Actions. In case at any time after
--------------------------
the Distribution Date the Company shall propose (a) to pay any dividend payable
in stock of any class to the holders of its Common Stock or to make any other
distribution
58
<PAGE>
to the holders of its Common Stock (other than a regular periodic cash dividend
at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid), or (b) to offer to the holders of its Common Stock rights or
warrants to subscribe for or to purchase any additional shares of Common Stock
or shares of stock of any class or any other securities, rights or options, or
(c) to effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding shares of Common
Stock), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its subsidiaries (taken as
a whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 25, 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, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (a) or
(b) above at least twenty days prior to the record date for determining holders
of the Common Stock
59
<PAGE>
for purposes of such action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of Common Stock, whichever shall be the
earlier. The failure to give notice required by this Section 24 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
Section 25. Notices. Notices or demands authorized by this Agreement
-------
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Martin Marietta Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
Attention: Frank H. Menaker, Jr.
Vice President and
General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard, 3rd Floor
Jersey City, New Jersey 07310
Attention: Joanne Gorostiola
60
<PAGE>
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments. The Company and the Rights
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Rights Agent may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates. The Company may at
its sole option and at any time elect to change the Expiration Date; provided,
--------
however, that in no event may the duration of the Rights be shortened without
- -------
the written consent of the registered holders thereof (other than by a
redemption of the Rights pursuant to Section 23).
Section 27. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person or
61
<PAGE>
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates.
Section 29. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State except for Sections 18, 19, 20 and 21,
which for all purposes shall be governed by and construed in accordance with the
laws of the State of New York.
Section 30. 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 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority having jurisdiction with respect thereto to be invalid, illegal,
or unenforceable, (a) such invalid, illegal or unenforceable term, provision,
covenant or restriction shall nevertheless be valid, legal and enforceable to
the extent, if any, provided
62
<PAGE>
by such court or authority, and (b) 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.
Section 32. Descriptive Headings. Descriptive headings of the
--------------------
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MARTIN MARIETTA CORPORATION
By:_________________________Seal
Name:
Title:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By:_________________________Seal
Name:
Title:
63
<PAGE>
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF REDEMPTION IS MADE. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
MARTIN MARIETTA 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 August 29, 1994 (the "Rights Agreement"),
between Martin Marietta Corporation, a Maryland corporation (the "Corporation"),
and First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent"), to purchase from the Corporation at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to the
Expiration Date (as such term is defined in the Rights Agreement), or the date,
if any, on which the Rights evidenced by this Certificate may be redeemed, at
the principal stock transfer office of the Rights Agent, or its successors as
Rights Agent, in New York, New York, one fully paid nonassessable share of the
Common Stock of the par value of $1.00 per share of the Corporation
A-1
<PAGE>
("Common Stock") (or other shares, securities or property, as the case may be,
of equivalent value determined in accordance with the terms of the Rights
Agreement), at a purchase price of $190 per share (the "Purchase Price") upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of 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 September 9, 1994, based on the shares of
Common Stock of the Corporation as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock (or other shares, securities or property, as the case
may be), which may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and at the principal office of the Corporation.
A-2
<PAGE>
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase such number of shares of
Common Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at its option
at a redemption price of $.01 per Right.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment may
be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Stock or of
any other securities of the Corporation which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the
A-3
<PAGE>
Corporation or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of ___________.
Attest: MARTIN MARIETTA
CORPORATION
- -------------------------- By:______________________
Secretary Name:
Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By:_________________________
Authorized Signatory
A-4
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto
_____________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ____________, ____
----------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
A-5
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
Dated:_____________ _________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
A-6
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the Right Certificate.)
To Martin Marietta Corporation:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Common
Stock (or other shares, securities or property, as the case may be) issuable
upon the exercise of such Rights and requests that certificates for such shares
(or other shares, securities or property, as the case may be) be issued in the
name of:
Please insert social security
or other identifying number
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
If such number of rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
Dated: ______________, _____
Signature
(Signature must conform in all respects to name of
holder as
A-7
<PAGE>
specified on the face of this Right Certificate)
Signature Guaranteed:
A-8
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Associate or an
Affiliate thereof (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
Dated:_____________ _________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
A-9
<PAGE>
Exhibit B
---------
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On August 27, 1994, the Board of Directors of Martin Marietta
Corporation (the "Company") authorized the distribution of one Right for each
outstanding share of common stock of the par value of $1.00 per share of the
Company ("Common Stock"). The distribution is to be made to the stockholders of
record on September 9, 1994 and, in addition, the Company has authorized the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between September 9, 1994 and the earlier of the Distribution
Date or Expiration Date (as such terms are hereinafter defined) or the date, if
any, on which Rights may be redeemed. When exercisable each Right entitles the
registered holder to purchase from the Company one share of Common Stock (or
other shares, securities or property, as the case may be, of equivalent value)
at a price of $190 per share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and the Rights Agent (First Chicago
Trust Company of New York and its successors).
Up to and including the earlier of 10 business days following (i) a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire, in a
transaction or series of transactions not approved by the Board, beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) the commencement of a tender or exchange offer by any
person (other than the Company or an employee benefit plan of the Company or any
of its subsidiaries) for 30% or more of the outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of September 9, 1994, by such Common Stock certificates, whether
or not a copy of this Summary of Rights is attached thereto. General Electric
Company will not be an "Acquiring Person" so long as the Standstill Agreement,
dated April 2, 1993, between the Company and General Electric Company is in
effect, and General Electric is not in material breach thereof, notice of which
breach has been given to it by the Company specifying that as a result thereof
it is no longer excluded from the definition of "Acquiring Person."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and
B-1
<PAGE>
only with Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after September
9, 1994, upon transfer or new issuance of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Stock outstanding on or after September 9, 1994,
with or without a copy of this Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with Common Stock represented
by such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until after the date on which the
Company's right to redeem the Rights has expired. The Rights will expire
immediately prior to the consummation of the transactions contemplated by the
Agreement and Plan of Reorganization, dated as of August 29, 1994, among Parent
Corporation, the Company and Lockheed Corporation; provided, however, that if
such Agreement is terminated without consummation of the transactions
contemplated thereby, then at or prior to the close of business on September 9,
2004, or on such later date to which the Rights may be extended by the Company
(the "Expiration Date"), unless earlier redeemed by the Company as described
below.
The Purchase Price payable, and number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, Common Stock,
(ii) upon the grant to holders of Common Stock of certain rights or warrants to
subscribe for Common Stock or convertible securities at less than the current
market price of Common Stock or (iii) upon the distribution to holders of Common
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings at a rate not in excess of 125%
of the rate of the last cash dividend theretofore paid or dividends payable in
Common Stock) or of subscription rights or warrants (other than those referred
to above).
In the event that, at any time after the tenth business day after a
Stock Acquisition Date, the Company is acquired in a merger or other business
combination transaction or 50% or more of its assets or earning power is sold,
proper provision shall be made so that each holder of a Right (except as noted
below), shall thereafter have the right to receive,
B-2
<PAGE>
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction would have a market value of two times the exercise price of
the Right. In the event that the Company is the surviving corporation in a
merger or other combination and Common Stock was not changed or exchanged, or in
the event that an Acquiring Person engages with the Company in one or more self-
dealing transactions specified in the Rights Agreement, proper provision shall
be made so that each holder of a Right (except as noted below) will thereafter
have the right to receive upon exercise that number of shares of Common Stock
(or other shares, securities or property, as the case may be) having a market
value of two times the exercise price of the Right. In addition, in the event
that a person or group of affiliated or associated persons becomes an Acquiring
Person, then proper provision shall be made so that each holder of a Right
(except as noted below) shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of Common Stock (or other shares, securities or property, as the case may
be) which at the time of such transaction would have a market value of two times
the exercise price of the Right.
The holder of any Rights that are, or were, beneficially owned by an
Acquiring Person or an affiliate or associate thereof or certain transferees
thereof which engaged in, or realized the benefit of, an event or transaction or
transactions described in the immediately preceding paragraph, shall be entitled
to exercise his Right, but without the two for one benefit described in the
immediately preceding paragraph.
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person, and until the beneficial ownership level of
such Acquiring Person, together with all affiliates and associates of such
Acquiring Person, reaches 50%, the Board of Directors may exchange the Rights,
(other than Rights held by the Acquiring Person, affiliates or associates of the
Acquiring Person and certain other persons whose Rights can be traced to an
Acquiring Person) in whole or in part, at an exchange ratio of one share of the
Company's Common Stock (or shares of preferred stock or principal amount of debt
securities of equivalent market value, as determined in good faith by the Board
of Directors) per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof an
adjustment in cash will be made based on the market price of Common Stock on the
last trading date prior to the date of exercise.
B-3
<PAGE>
Up to and including the tenth business day after a Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Immediately upon the action of the
Board of Directors of the Company electing to redeem the Rights, the Company
shall make an announcement thereof and, upon such announcement, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
September 1, 1994. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
B-4
