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
The Allstate Corporation
(Exact name of registrant as specified in its charter}
Delaware
(State of Incorporation)
36-3871531
(I.R.S. Employer Identification No.)
2775 Sanders Road
Northbrook, Illinois
(Address of principal executive offices)
60062
(Zip Code)
Securities to be registered pursuant to Section 12(b)of the Act:
Title of each class
to be so registered
Share Purchase Rights
Name of each exchange on which
each class is to be registered
New York Stock Exchange
Chicago Stock Exchange
Securities to be registered pursuant to Section 12(g)
of the Act:
None
(Title of Class)
(Page 1 of 68)
<PAGE>
Item 1. Description of Securities to be Registered.
On February 12, 1999, the Board of Directors of The Allstate
Corporation (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.01 per share (the "Common Stock"), of the Company. The distribution is payable
to stockholders of record at the close of business on February 26, 1999 (the
"Record Date"), and with respect to a Common Stock that become outstanding after
the Record Date and prior to the earliest of the Distribution Date (as defined
below), the redemption of the Rights, the exchange of the Rights, and the
expiration of the Rights (and, in certain cases, following the Distribution
Date). Each Right entities the registered holder to purchase from the Company
one one-thousandth of a share of Junior Participating Preferred Stock, Series A,
par value $.01 per share, of the Company (the "Preferred Shares") at a price of
$150 per one one-thousandth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent").
The Rights will be evidenced by Common Share certificates and
not by separate certificates until the earlier to occur of (i) the tenth day
after the date it is publicly announced that a person or group other than
certain exempt persons (an "Acquiring Person"), together with persons affiliated
or associated with such Acquiring Person, has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Shares (a
"Triggering Event") and (ii) the tenth business day after the commencement or
public disclosure of an intention to commence a tender offer or exchange offer
by a person other than an exempt person if, upon consummation of the offer, such
person could acquire beneficial ownership of 15% or more of the outstanding
Common Stock (the earlier of such dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), the Rights will be transferred with and only with
the Common Stock, and the surrender for transfer of any certificate for Common
Stock will also constitute the transfer of the Rights associated with such
Common Shares. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights will first become exercisable after the
Distribution Date (unless sooner redeemed or exchanged). Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends. The Rights will expire at the close of business on February 12, 2009
(the "Expiration Date"), unless earlier redeemed or exchanged by the Company as
described below.
(Page 2 of 68)
<PAGE>
In the event that a person becomes an Acquiring Person, each
Right (other than Rights that are or were beneficially owned by the Acquiring
Person and certain related persons and transferees, which will thereafter be
void) shall thereafter be exercisable not for Preferred Shares, but for a number
of shares of Common Stock having a market value of two times the exercise price
of the Right. In the event that, at the time or after a person becomes an
Acquiring Person, the Company is involved in a merger or other business
combination in which (i) the Company is not the surviving corporation, (ii)
Common Stock is changed or exchanged, or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, then each Right (other than
Rights that are or were owned by the Acquiring Person and certain related
persons and transferees, which will thereafter be void) shall thereafter be
exercisable for a number of shares of common stock of the acquiring company
having a market value of two times the exercise price of the Right.
In addition, at any time after a person has acquired
beneficial ownership of 50% or more of the outstanding Common Stock, the Company
may elect to exchange all or part of the Rights (excluding void Rights held by
an Acquiring Person and certain related persons and transferees) for Common
Stock on a one-for-one basis.
The Purchase Price payable, and the number and kind of
securities, cash or other 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 or distribution on, or a subdivision or combination of, the
Common Stock, (ii) upon the grant to holders of the Common Stock of rights,
options or warrants to subscribe for Common Stock or securities convertible into
Common Stock at less than the current market price, (iii) upon the distribution
to holders of the Common Stock of securities, cash, evidences of indebtedness or
assets (excluding regular periodic cash dividends out of earnings or retained
earnings) and (iv) in connection with recapitalizations of the Company or
reclassifications of the Common Stock.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereto, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
At any time prior to the earlier of (i) the occurrence of a
Triggering Event and (ii) the Expiration Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The Redemption Price will be payable in cash,
shares (including fractional shares) of Common Stock or any other form of
consideration deemed appropriate by the Board of Directors. Immediately upon
action of the Board of Directors ordering redemption of the Rights, the ability
of holders to exercise the Rights will terminate and the only rights of such
holders will be to receive the Redemption Price.
(Page 3 of 68)
<PAGE>
At any time prior to the occurrence of a Triggering Event, the
Board of Directors of the Company may amend or supplement the Rights Agreement
without the approval of the Rights Agent or any holder of the Rights.
Thereafter, the Rights Agreement may not be amended or changed in any manner
which would adversely affect the interests of the holders of the Rights (other
than an Acquiring Person or an affiliate or associate thereof).
The Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment equal to the greater of $25 per share
and 1,000 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment equal to the greater of $100 per share and
1,000 times the payment made per share of Common Stock. Each Preferred Share
will have 1,000 votes per share, voting together with the Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the 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 prior to the occurrence of a Triggering Event, because
until such time the Rights may generally be redeemed by the Company at $.01 per
Right.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to the Application for
Registration on Form 8-A and as an Exhibit to the Company's Current Report on
Form 8-K. 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.
(Page 4 of 68)
<PAGE>
Item 2.
Exhibit Item No. Description
Exhibit 4 Form of Rights Agreement dated as of February 12, 1999
between The Allstate Corporation and First Chicago Trust Company
of New York, as Rights Agent, which includes as Exhibit A the
form of Right Certificate. Pursuant to the Rights Agreement,
Right Certificates will not be mailed until as soon as
practicable after the earlier of the tenth calendar day after
announcement that a person or group has acquired beneficial
ownership of 15% or more of the Common Shares or the tenth
business day after a person commenced, or announces its intention
to commence an offer the consummation of which would result in a
person beneficially owning 15% or more of the Common Shares.
(Page 5 of 68)
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
THE ALLSTATE CORPORATION
By /s/ Robert W. Pike
-------------------
Name: Robert W. Pike
Title: Vice President, Secretary and
General Counsel
February 18, 1999
(Page 6 of 68)
<PAGE>
EXHIBIT INDEX
Exhibit Item Number Description Page Number
Ex. No. 4 Form of Rights Agreement dated as of Exhibit 4
February 12, 1999 between The Allstate (pp. 8)
Corporation and First Chicago Trust
Company of New York
Attachments to
Exhibit 4
(Page 7 of 68)
<PAGE>
EXHIBIT 4
- -------------------------------------------------------------------------------
THE ALLSTATE CORPORATION
AND
RIGHTS AGENT
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
RIGHTS AGREEMENT
DATED AS OF FEBRUARY 12, 1999
- -------------------------------------------------------------------------------
(Page 8 of 68)
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions............................................1
Section 2. Appointment of Rights Agent....................................8
Section 3. Issuance of Rights Certificates................................8
Section 4. Form of Rights Certificates...................................10
Section 5. Execution, Countersignature and Registration..................10
Section 6. Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates..................................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.11
Section 8. Cancellation and Destruction of Rights Certificates...........13
Section 9. Reservation and Availability of Preferred Stock...............14
Section 10. Preferred Stock Record Date...................................15
Section 11. Adjustments to Purchase Price, Number of Shares or Number of
Rights........................................................15
Section 12. Certification of Adjustments..................................26
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.................................................27
Section 14. Fractional Rights and Fractional Shares.......................28
Section 15. Rights of Action..............................................29
Section 16. Agreement of Rights Holders Concerning Transfer and Ownership of
Rights........................................................29
Section 17. Rights Holder Not Deemed a Stockholder........................29
Section 18. Concerning the Rights Agent...................................30
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....30
(Page 9 of 68)
<PAGE>
ii
Section 20. Duties of Rights Agent........................................31
Section 21. Change of Rights Agent........................................32
Section 22. Issuance of New Rights Certificates...........................34
Section 23. Redemption and Termination....................................34
Section 24. Notice of Certain Events......................................35
Section 25. Notices.......................................................36
Section 26. Supplements and Amendments....................................36
Section 27. Successors....................................................37
Section 28. Benefits of this Agreement....................................38
Section 29. Severability..................................................38
Section 30. Governing Law.................................................38
Section 31. Counterparts..................................................38
Section 32. Descriptive Headings..........................................38
Section 33. Grammatical Construction......................................38
(Page 10 of 68)
<PAGE>
RIGHTS AGREEMENT
---------------------------
THIS RIGHTS AGREEMENT, dated as of February 12, 1999, is made
between The Allstate Corporation, a Delaware corporation (the "Company" ), and
First Chicago Trust Company of New York (the "Rights Agent").
RECITALS
--------
The Board of Directors of the Company has authorized and
declared the payment of a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as defined in Section 1) outstanding on
the Record Date (as defined in Section 1) and has authorized the issuance of one
Right for each share of Common Stock issued after the Record Date and before the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Expiration Date (as such terms are defined in Section 1) and in certain
cases following the Distribution Date. Each Right will represent, as of the
Record Date, the right to purchase one one-thousandth of one share of Preferred
Stock (as defined in Section 1) upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth in this Agreement, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" means any Person who or which, together
with all Affiliates and Associates of such Person, is (or has previously been,
at any time after the date of this Agreement, whether or not such Person(s)
continues to be) the Beneficial Owner of 15% or more of the Common Stock then
outstanding (determined without taking into account any securities exercisable
or exchangeable for, or convertible into, Common Stock, other than any such
securities beneficially owned by the Acquiring Person and Affiliates and
Associates of such Person). However, "Acquiring Person" shall not include any
Exempt Person.
Notwithstanding the foregoing, a Person shall not become an
"Acquiring Person" solely as the result of an acquisition of Common Stock by the
Company or any Subsidiary which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 15% or more of the Common Stock then outstanding as determined above;
provided, however, that if a Person becomes the Beneficial Owner of 15% or more
of the Common Stock then outstanding as determined above solely by reason of
such a share acquisition by the Company and such Person shall, after becoming
the Beneficial Owner of such Common Stock, become the Beneficial Owner of any
additional shares of Common Stock by any means whatsoever (other than as a
result of the subsequent occurrence
(Page 11 of 68)
<PAGE>
- 2 -
of a stock dividend or a subdivision of the Common Stock into a larger number of
shares or a similar transaction), then such Person shall be deemed to be an
"Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently, and such Person divests as promptly
as practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement. The determination of whether such
Person's becoming an Acquiring Person shall have been inadvertent and the
determination of whether the divestment of sufficient shares shall have been
made as promptly as practicable shall be made by a majority of the Board of
Directors of the Company.
(b) "Adjustment Number" has the meaning set forth in, and
shall be calculated in accordance with, the Certificate of Designation,
Preferences and Rights of Junior Participating Preferred Stock, Series A,
attached as Exhibit A hereto.
(c) "Affiliate" has the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement; provided that, for purposes of this Agreement,
the term "Affiliate" shall not include any Person that is an Exempt Person.
(d) "Associate" has the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement; provided that for purposes of this Agreement, the
tenn "Associate" shall not include any Person that is an Exempt Person.
(e) Except as provided below, a Person shall be deemed to be
the "Beneficial Owner" of, and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any Affiliate or Associate
of such Person beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate
of such Person has, directly or indirectly, the right or
obligation (whether or not then exercisable or effective) to
acquire pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise;
provided, however, that a Person will not be deemed the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any Affiliate or Associate of such
Person until such tendered securities are accepted for
purchase or exchange;
(Page 12 of 68)
<PAGE>
- 3 -
(iii) which such Person or any Affiliate or Associate
of such Person has, directly or indirectly, the right (whether
or not then exercisable) to vote, or to direct the voting of,
pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security pursuant to this clause (iii)
if the agreement, arrangement or understanding to vote, or to
direct the voting of, such security (A) arises solely from a
revocable proxy or consent given in response to a public proxy
or consent solicitation made pursuant to, and in accordance
with, the Exchange Act and applicable rules and regulations
thereunder and (B) is not also then reportable under Item 6
(or any comparable or successor item) of Schedule 13D under
the Exchange Act (or any comparable or successor schedule or
report);
(iv) which such Person or any Affiliate or Associate
of such Person has "beneficial ownership" of as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act or any successor provision; or
(v) which are beneficially owned, directly or
indirectly, by any other Person or any Affiliate or Associate
of such other Person with whom such Person or any Affiliate or
Associate of such Person has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (iii) of this Section 1(d)) or
disposing of any securities of the Company.
Nothing in the preceding sentence 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 40 days after the date of such acquisition.
Notwithstanding anything in this Agreement to the contrary,
for purposes of this Agreement, no Person shall be treated as the "Beneficial
Owner" of, or be deemed to "beneficially own," any securities solely by reason
of the ownership of those securities by any other Person that is an Exempt
Person.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially under the preceding provisions in
this definition.
(f) "Business Combination" has the meaning set forth in
Section 13 of this Agreement.
(Page 13 of 68)
<PAGE>
- 4 -
(g) "Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(h) "Close of Business" on any given date means 5:00 p.m., New
York, New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m. New York, New York time, on the next
succeeding Business Day.
(i) "Common Equivalent Share" has the meaning set forth in
Section 11(c)(1)(iii) of this Agreement.
(j) "Common Share" has the meaning set forth in Section
11(c)(1)(iii) of this Agreement.
(k) "Common Stock" when used with reference to the Company
means the Common Stock, par value $.01 per share, of the Company (as the same
may be changed by reason of any combination, subdivision or reclassification of
the Common Stock). "Common Stock" when used with reference to any Person (other
than the Company prior to a Business Combination) means shares of capital stock
of such Person (if such Person is a corporation) of any class or series, or
units of equity interests in such Person (if such Person is not a corporation)
of any class or series, the terms of which shares or units do not limit (as a
fixed amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such shares or units or the amount of assets
distributable on such shares or units upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such shares or units are subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that if at any
time there are more than one such class or series of capital stock of or equity
interests in such Person, "Common Stock" of such Person will include all such
classes and series substantially in the proportion of the total number of shares
or other units of each such class or series outstanding at such time.
(l) "Current Market Price" per share of Common Stock, Common
Equivalent Share or any other security on any date is the average of the daily
closing prices per share of such Common Stock, Common Equivalent Share or any
other security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date for the purpose of any computation under
this Agreement; provided, however, that in the event that the Current Market
Price per share of Common Stock, Common Equivalent Share or any other security
is determined during a period following the announcement by the issuer of such
Common Stock, Common Equivalent Share or any other security of (i) a dividend or
distribution on such Common Stock, Common Equivalent Share or any other security
other than a regular quarterly cash dividend, or (ii) any subdivision,
combination or reclassification of such Common Stock, Common Equivalent Share or
any other security, and prior to the expiration of 30 Trading Days after the
"ex-dividend" date for such dividend or distribution or the record date for such
subdivision,
(Page 14 of 68)
<PAGE>
- 5 -
combination or reclassification, then, and in each such case, the "Current
Market Price" must be appropriately adjusted to take into account such dividend,
distribution, subdivision, combination or reclassification. The closing price
for each Trading Day shall be the last sale price, regular way, on such day, or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, 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 ("NYSE") or, if the
Common Stock, Common Equivalent Share or any other security is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
United States national securities exchange on which the Common Stock, Common
Equivalent Share or any other security is listed or admitted to trading or, if
the Common Stock, Common Equivalent Share or any other security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or if on any such date the Common Stock, Common Equivalent Share or any
other security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the security selected by a majority of the Board of Directors of the
Company. If no such market maker is making a market, the fair market value of
such shares on such day shall be determined in good faith by a majority of the
Board of Directors of the Company, which determination shall be described in a
statement filed with the Rights Agent and shall be binding and conclusive for
all purposes. The term "Trading Day" means a day on which the principal United
States national securities exchange on which the Common Stock, Common Equivalent
Share or any other security is listed or admitted to trading is open for the
transaction of business or, if the Common Stock, Common Equivalent Share or any
other security is not listed or admitted to trading on any United States
national securities exchange, but is traded in the over-the-counter market, then
any day for which the high bid and low asked prices in the over-the-counter
market are reported, or if the Common Stock, Common Equivalent Share or any
other security is not traded in the over-the-counter market, then a Business
Day. If the Preferred Stock is not publicly traded, the "current per share
market price" of the Preferred Stock shall be conclusively deemed to be the
current per share market price of the Common Shares as determined pursuant to
this paragraph of Section 1 (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by the Adjustment Number.
(m) "Distribution Date" means the earlier of (i) the tenth day
after the Stock Acquisition Date and (ii) the tenth Business Day after
commencement of or public disclosure of an intention to commence (including,
without limitation, any such commencement or public disclosure which occurs
before or after the date of this Agreement and prior to the issuance of the
Rights) a tender offer or exchange offer by a Person if, after acquiring the
maximum number of securities sought pursuant to such offer, such Person, or any
Affiliate or Associate of such Person, would be an Acquiring Person. A majority
of the Board of Directors of the Company
(Page 15 of 68)
<PAGE>
- 6 -
may defer the date set forth in clause (ii) of the preceding sentence to a
specified later date or to an unspecified later date to be determined by a
subsequent action or event.
(n) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and any successor statute.
(o) "Exchange Date" means the time at which Rights are
exchanged pursuant to Section 11(c)(2).
(p) "Exempt Event" means with respect to any Person, the
acquisition by such Person of Beneficial Ownership of Common Stock solely as a
result of the occurrence of a Triggering Event and the effect of such Triggering
Event on the last proviso of clause (ii) of the definition of Beneficial Owner,
other than a Triggering Event in which such Person becomes an Acquiring Person.
(q) "Exempt Person" means (i) the Company, (ii) any Subsidiary
of the Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company, and (iv) any Person holding Common Stock for any such
employee benefit plan or for employees of the Company or of any Subsidiary of
the Company pursuant to the terms of any such employee benefit plan.
(r) Exercise Amount" means the amount payable by the holder as
a condition to the exercise of one Right. Until and unless it shall be adjusted
in accordance with this Agreement, the Exercise Amount shall be $150.00.
(s) "Expiration Date" means the Close of Business on February
12, 2009.
(t) "Person" means any individual, firm, corporation, limited
liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity, and shall include any "group" as
that term is used in Rule 13d-5(b) under the Exchange Act (or any successor
provision).
(u) "Preferred Stock" means the Company's Junior Participating
Preferred Stock, Series A, par value $.01 per share, having the rights and
preferences set forth in the Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A, attached hereto as Exhibit A.
(v) "Principal Party" means (i) in the case of any Business
Combination described in clause (i), (ii) or (iii) of the first sentence of
Section 13(a), (A) the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted or for which they are
exchanged in such Business Combination or, if there is more than one such
issuer, the issuer of the Common Stock which has the greatest aggregate market
value or (B) if no securities are so issued, the Person that survives or results
from the Business Combination or, if there is more than one such Person, the
Person the Common Stock of which has the greatest
(Page 16 of 68)
<PAGE>
- 7 -
aggregate market value, and (ii) in the case of any Business Combination
described in clause (iv) of the first sentence in Section 13(a), the Person that
receives the greatest portion of the assets or earning power transferred
pursuant to such Business Combination or, if each Person that is a party to such
Business Combination receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets or
earning power cannot reasonably be determined, whichever of such Persons is the
issuer of the Common Stock which has the greatest aggregate market value;
provided, however, that in any such case, 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 one or more other Persons, then (x) "Principal
Party" refers to whichever of such other Persons has Common Stock that is and
has been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act; (y) if the Common Stocks of two or more of such
other Persons are and have been so registered, "Principal Party" refers to
whichever of such other Persons is the issuer of the Common Stock which has the
greatest aggregate market value; or (z) if the Common Stock of none of such
other Persons has been so registered, "Principal Party" refers to whichever of
such other Persons (other than an individual) is the Person which has the equity
securities with the greatest aggregate market value. 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 above apply to each of the chains of ownership having an interest in such
joint venture as if such Person 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 Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(w) "Purchase Price." Until the Trigger Date, the term
Purchase Price means the price at which one-one thousandth of a share of
Preferred Stock shall be purchasable with the Rights. The Purchase Price shall
be $150.00 per one one-thousandth of a share of Preferred Stock until and unless
it shall be adjusted pursuant to this Agreement. Immediately after the Trigger
Date, the term "Purchase Price" shall mean the price per Common Share for which
Common Shares shall be purchasable with the Rights. Thereafter the term
"Purchase Price" as applied with respect to each kind of stock or other property
purchasable with the Rights as a result of adjustments prescribed by this
Agreement shall mean the price at which each share of such stock or the smallest
available unit of such other property is purchasable with the Rights.
(x) "Record Date" means the Close of Business on February 26,
1999.
(y) "Redemption Date" means the time at which the Rights are
scheduled to be redeemed as provided in Section 23.
(z) "Redemption Price" has the meaning given to such term in
Section 23.
(aa) "Securities Act" means the Securities Act of 1933,
as amended, and any successor statute.
(Page 17 of 68)
<PAGE>
- 8 -
(bb) "Stock Acquisition Date" means the first date of public
disclosure by the Company, an Acquiring Person or otherwise that an Acquiring
Person has become such.
(cc) "Subsidiary" has the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement.
(dd) "Trigger Date" means the first date upon which a Person
becomes an Acquiring Person.
(ee) "Triggering Event" shall mean a Person becoming an
Acquiring Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates.
-------------------------------
(a) Until the Distribution Date: (i) the Rights shall be
issued in respect of and shall be evidenced by the certificates representing the
shares of Common Stock issued and outstanding on the Record Date and shares of
Common Stock issued or which become outstanding after the Record Date and prior
to the earliest of the Distribution Date, the Redemption Date, the Exchange Date
and the Expiration Date (which certificates for Common Stock shall be deemed to
also be certificates evidencing the Rights), and not by separate certificates;
(ii) the registered holders of such shares of Common Stock shall also be the
registered holders of the Rights associated with such shares; and (iii) the
Rights shall be transferable only in connection with the transfer of shares of
Common Stock, and the surrender for transfer of any certificate for such shares
of Common Stock shall also constitute the surrender for transfer of the Rights
associated with such shares. As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the Distribution Date, the Rights
Agent shall (except as otherwise provided in Section 7(e)) mail, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of Business on the Distribution Date, as shown by the records of the
Company, at the address of such holder shown on such records, one or more
certificates evidencing the Rights ("Rights Certificates"), in substantially the
form of Exhibit B hereto, evidencing one Right (as adjusted from time to time
pursuant to this Agreement) for each share of Common Stock so held. From and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) Rights shall be issued in respect of all shares of Common
Stock which are issued or sold by the Company after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date, the Exchange Date
and the Expiration Date. In addition, in connection with the issuance or sale of
Common Stock by the Company following the
(Page 18 of 68)
<PAGE>
- 9 -
Distribution Date and prior to the earliest of the Redemption Date, the Exchange
Date and the Expiration Date, the Company shall, with respect to Common Stock so
issued or sold (i) pursuant to the exercise of stock options issued prior to the
Distribution Date or under any employee plan or arrangement created prior to the
Distribution Date, or (ii) upon the exercise, conversion or exchange of
securities issued by the Company prior to the Distribution Date, issue Rights
and Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (x) no such
Rights and Rights Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued and (y) no such Rights
and Rights Certificates shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Certificates issued after the Record Date representing shares of Common Stock
outstanding on the Record Date and shares of Common Stock issued after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date, the Exchange Date and the Expiration Date shall have impressed, printed,
or written on, or otherwise affixed to them a legend substantially in the
following form:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
The Allstate Corporation and First Chicago Trust Company of
New York, as Rights Agent, dated as of February 12, 1999 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of The Allstate
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. First Chicago Trust Company of New York 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, Rights that were, are
or become beneficially owned by Acquiring Persons or their
Associates or Affiliates (as such terms are defined in the
Rights Agreement) may become null and void and the holder of
any of such Rights (including any subsequent holder) shall not
have any right to exercise such Rights.
(c) Notwithstanding any other provision of this Agreement,
neither the Company, the Rights Agent nor anyone else shall have any obligation
to issue any Rights Certificate to an Acquiring Person or to anyone else in
whose hands the Rights nominally represented by such Certificate shall be null
and void either initially or in connection with a request to register a transfer
of Rights represented by a certificate previously issued. Furthermore, neither
the Company, the Rights Agent nor anyone else shall be obligated to issue Rights
Certificates to any person making a tender offer which if consummated could
render such person an Acquiring Person or to any Affiliate or Associate of such
person until and unless the
(Page 19 of 68)
<PAGE>
- 10 -
tender offer is withdrawn and the person shall have established to the Company's
reasonable satisfaction that such person does not intend to become an Acquiring
Person. The Company shall be entitled to require any person claiming the right
to receive a Rights Certificate to present such evidence as the Company shall
require in good faith to establish to the Company's satisfaction that the Rights
represented by that Certificate have not become null and void under the
provisions in Section 7(e) or that the Company is not entitled to withhold such
Certificate under the provisions of the preceding sentence.
Section 4. Form of Rights Certificates. The Rights Certificates (and
----------------------------
the form of election to purchase shares and form of assignment to be printed on
the reverse thereof) shall be in substantially the form of Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any 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 this
Agreement, the Rights Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of shares of Preferred Stock as shall be set forth therein
at the Purchase Price set forth therein, but the number and kind of such
securities and the Purchase Price shall be subject to adjustment as provided in
this Agreement.
Section 5. Execution, Countersignature and Registration.
--------------------------------------------
(a) Each Rights Certificate shall be executed on behalf of the
Company by the Company's Chief Executive Officer, President, Chief Financial
Officer, Treasurer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Company's Secretary or an Assistant
Secretary, either manually or by facsimile signature. Each Rights Certificate
shall be countersigned by the Rights Agent either manually or, if permitted by
the Company, by facsimile signature and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed a Rights Certificate shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificate nevertheless may be countersigned by the Rights Agent
and issued and delivered with the same force and effect as though the Person who
signed such Rights Certificate had not ceased to be such officer of the Company;
and any Rights Certificate may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its principal stock transfer office, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
(Page 20 of 68)
<PAGE>
- 11 -
holders of the Rights Certificates, the number of Rights evidenced by each
Rights Certificate, and the certificate number and the date of issuance of each
Rights Certificate.
Section 6. Transfer, Division, Combination and Exchange of Rights
------------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
- -----------------------------------------------------------------------
(a) Subject to the provisions of Section 3(c) and Section 14,
at any time after the Close of Business on the Distribution Date and at or prior
to the Close of Business on the earliest of the Redemption Date, the Exchange
Date and the Expiration Date, any Rights Certificate or Rights Certificates may
be transferred, divided, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock (or following a Triggering Event or a Business
Combination, other securities, cash or other property, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, divide, combine
or exchange any Rights Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, divided, combined or exchanged at the principal
corporate office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. As a condition to such
transfer, division, combination or exchange, the Company may require payment by
the surrendering holder of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection therewith. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have duly completed and executed the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or such former or proposed Beneficial
Owner) thereof or such Beneficial Owner's Affiliates or Associates as the
Company shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will make and deliver a new Rights
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
------------------------------------------------------
Rights.
- ------
(a) Each Right shall entitle (except as otherwise provided in
this Agreement) the registered holder thereof, upon the exercise thereof as
provided in this Agreement, to purchase, for the Purchase Price, at any time
after the Distribution Date and prior to the earliest
(Page 21 of 68)
<PAGE>
- 12 -
of the Expiration Date, the Exchange Date and the Redemption Date, one
one-thousandth (1/1000) of a share of Preferred Stock, subject to adjustment
from time to time as provided in Sections 11 and 13.
(b) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided in this
Agreement) in whole or in part (except that no fraction of a Right may be
exercised) at any time after the Distribution Date and prior to the earliest of
the Expiration Date, the Exchange Date and the Redemption Date, by surrendering
the Rights Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal stock transfer
office of the Rights Agent, together with payment of the Exercise Amount for
each Right exercised.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Amount for each Right exercised and an
amount equal to any applicable transfer tax required to be paid by the
surrendering holder pursuant to Section 9(d), the Rights Agent shall, subject to
the provisions of this Agreement, thereupon promptly (i)(A) requisition from any
transfer agent for the Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the Preferred Stock (or
other securities, as the case may be) to be purchased (and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests), or
(B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock (or other securities, as the case may be) issuable upon exercise
of the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such Preferred Stock (or other securities, as
the case may be) as are to be purchased (in which case certificates for the
Preferred Stock (or other securities, as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company shall direct the depositary agent to comply with such request; (ii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder; and (iii) if appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 of this Agreement and, promptly after receipt thereof, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities (including shares of Common Stock) of the Company, pay cash and/or
distribute other property pursuant to this Agreement, 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 Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Rights Certificate or to his duly authorized assigns, subject to the
provisions of Section 3(c) and Section 14.
(Page 22 of 68)
<PAGE>
- 13 -
(e) Notwithstanding anything in this Agreement to the
contrary, any Rights that are or were formerly beneficially owned on or after
the earlier of the Distribution Date and the Trigger Date by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a direct or
indirect transferee of an Acquiring Person (or of an Associate or Affiliate of
such Acquiring Person) who becomes or becomes entitled to be a transferee after
the Acquiring Person becomes such, or (iii) a direct or indirect transferee of
an Acquiring Person (or of an Associate or Affiliate of such Acquiring Person)
who becomes or becomes entitled to be a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a direct or indirect transfer (whether or not for consideration) from the
Acquiring Person (or from an Associate or Affiliate of such Acquiring Person) to
holders of equity interests in such Acquiring Person (or to holders of equity
interests in any Associate or Affiliate of such Acquiring Person) or to any
Person with whom the Acquiring Person (or an Associate or Affiliate of such
Acquiring Person) has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a direct or indirect transfer which a
majority of the Board of Directors of the Company determines is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall, immediately upon the occurrence of a
Triggering Event and without any further action, be null and void and no holder
of such Rights shall have any rights whatsoever with respect to such Rights
whether under this Agreement or otherwise, provided; however, that, in the case
of transferees under clause (ii) or clause (iii) above, any Rights beneficially
owned by such transferee shall be null and void only if and to the extent such
Rights were formerly beneficially owned by a Person who was, at the time such
Person beneficially owned such Rights, or who later became, an Acquiring Person
or an Affiliate or Associate of such Acquiring Person. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of a Rights Certificate
or to any other Person as a result of the Company's failure to make, or any
delay in making (including any such failure or delay by the Board of Directors
of the Company) any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to the registered holder of a Rights
Certificate upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former or proposed Beneficial Owner) thereof or the Affiliates or Associates of
such Beneficial Owner (or former or proposed Beneficial Owner) as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
----------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it,
(Page 23 of 68)
<PAGE>
- 14 -
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
-----------------------------------------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred Stock
held in its treasury (and, following the occurrence of a Triggering Event or a
Business Combination, out of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and issued shares of Common
Stock and/or other securities held in its treasury) free from preemptive rights
or any right of first refusal, a sufficient number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) to permit the exercise in full of all Rights from time
to time outstanding.
(b) The Company further covenants and agrees, so long as the
Preferred Stock (and, following the occurrence of a Triggering Event or a
Business Combination, shares of Common Stock and/or other securities) issuable
upon the exercise of Rights may be listed on any United States national
securities exchange or quoted on any automated quotation system, to use its best
efforts to cause, from and after the time that the Rights become exercisable,
all such shares and/or other securities reserved for such issuance to be listed
on such exchange or quoted on such automated quotation system upon official
notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event or a Business Combination,
shares of Common Stock and/or other securities) delivered upon the exercise of
Rights shall, at the time of delivery of the certificates for such shares and/or
such other securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued, fully paid, nonassessable, freely tradeable, not
subject to liens or encumbrances, and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof, of any kind or nature whatsoever.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of the
Rights Certificates or of any certificates for shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to (i) pay any transfer tax
which may be payable in respect of any transfer involved in the issuance or
delivery of any Rights Certificates
(Page 24 of 68)
<PAGE>
- 15 -
or the issuance or delivery of any certificates for shares of Preferred Stock
(or Common Stock and/or other securities as the case may be) to a Person other
than, or in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or (ii) transfer or
deliver any Rights Certificate or issue or deliver any certificates for shares
of Preferred Stock (or Common Stock and/or other securities as the case may be)
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
(e) The Company shall (i) as soon as practicable following a
Triggering Event (or such earlier time following the Distribution Date as may be
required by law), prepare and file a registration statement on an appropriate
form under the Securities Act with respect to the securities purchasable upon
exercise of the Rights, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which Rights are no longer exercisable for such securities and (B)
the Expiration Date. The Company shall also take such action as may be necessary
or appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercise of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days
after the date of a Triggering Event, 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 make a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Stock (or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (and/or such other securities, as the
case may be) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Section 11. Adjustments to Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of securities, cash and other
property obtainable upon exercise of each Right and the number of Rights
outstanding shall be subject to adjustment from time to time as provided in this
Section 11.
(Page 25 of 68)
<PAGE>
- 16 -
(a) Adjustments Prior to Trigger Date:
(1) In the event the Company shall at any time
after the date of this Agreement and prior
to the Trigger Date (i) pay a dividend or
make a distribution on the Common Stock
payable in shares of Common Stock, (ii)
subdivide (by a stock split or otherwise)
the outstanding Common Stock into a larger
number of shares, (iii) combine (by a
reverse stock split or otherwise) the
outstanding Common Stock into a smaller
number of shares (and any of the actions
described in clauses (i), (ii) or (iii) are
herein called a "stock split") then:
(A) The number of Rights outstanding
shall be adjusted so that after
giving effect to such stock split
the number of Rights outstanding
shall be exactly equal to the number
of shares of Common Stock
outstanding (and so that prior to
the Distribution Date one Right
shall be associated with every share
of Common Stock outstanding after
such stock split);
(B) The Exercise Amount shall be
adjusted by multiplying the Exercise
Amount in effect immediately prior
to such stock split by a fraction,
the numerator of which shall be the
number of shares of Common Stock
outstanding immediately prior to
such stock split and the denominator
of which shall be the number of
shares of Common Stock outstanding
immediately after such stock split;
(C) The Purchase Price for each one
one-thousandth of a share of
Preferred Stock shall not change;
and
(D) The fraction of a share of Preferred
Stock purchasable with each Right
immediately after such stock split
shall be equal to the product
derived by multiplying the fraction
of a share of Preferred Stock
purchasable with each Right
immediately prior to such stock
split times the fraction cited in
clause (B) above.
The following example illustrates the intended
operation of the preceding provisions. Assume that
initially, each Right would (when and if it became
exercisable) entitle its holder to purchase one
one-thousandth of a share of Preferred Stock for $150
(and accordingly the initial Exercise Amount and the
initial Purchase Price per one one-thousandth of a
share of Preferred Stock are each $150). Assume
further that prior to the
(Page 26 of 68)
<PAGE>
- 17 -
Distribution Date, the Company splits its Common
Stock two for one (thereby doubling the number of
shares of Common Stock outstanding). The intended
operation of the preceding adjustment provisions is
that: (i) the number of Rights outstanding would also
double; (ii) one Right would be associated with each
share of Common Stock outstanding after the stock
split; (iii) each Right would have an Exercise Amount
equal to $75; (iv) each Right will entitle its holder
(when and if the Right becomes exercisable) to
purchase one two-thousandth of one share of Preferred
Stock; and (v) the Purchase Price for each one
one-thousandth of a share of Preferred Stock would
remain $150 so that the price for each one
two-thousandth of a share of Preferred Stock
purchasable with each Right would be $75.
(2) Adjustment in Rights Certificates: In the
event the Distribution Date shall occur and
the Company shall issue separate
certificates to represent the Rights, the
following provisions shall thereafter apply:
(A) In the event the number of Rights
outstanding are increased pursuant
to Section 11(a)(1), the Company
shall as promptly as reasonably
possible distribute to the record
holders of the Rights on the record
date for the stock split giving rise
to the increase in the number of
Rights certificates representing the
additional Rights issuable by reason
of such stock split.
(B) In the event the-number of Rights
outstanding are reduced pursuant to
Section 11(a) by reason of the
occurrence of a reverse stock split
or its functional equivalent, then
each Rights certificate outstanding
prior to such reverse stock split
shall thereafter represent the
reduced number of Rights into which
the Rights represented by such
certificate immediately prior to
such reverse stock split shall have
been converted by reason of the
occurrence of that reverse stock
split.
(b) Basic Triggering Event Adjustments: Upon the first
occurrence of a Triggering Event (except as otherwise provided in this
Agreement), each Right shall be changed so that immediately after the Triggering
Event:
(1) it shall no longer be exercisable for
Preferred Stock but rather shall be
exercisable for Common Stock;
(Page 27 of 68)
<PAGE>
- 18 -
(2) the number of shares of Common Stock which
may be acquired upon exercise of each Right
shall be equal to the result obtained by
dividing (x) 50% of the Current Market Price
per share of Common Stock on the date of the
occurrence of the Triggering Event into (y)
the Exercise Amount in effect immediately
prior to the Triggering Event; and
(3) the Purchase Price per Common Share
purchasable with each Right shall be equal
to 50% of the Current Market Price per share
of Common Stock on the date of the
occurrence of the Triggering Event.
(c) Other Post Triggering Event Adjustments.
(1) Use of Common Equivalent Shares or Cash: In
the event that the number of shares of
Common Stock which are authorized by the
Company's certificate of incorporation, but
which are not outstanding or reserved for
issuance for purposes other than upon
exercise of the Rights ("Available Common
Stock") is not sufficient to permit the
exercise in full of the Rights after the
adjustment made in accordance with Section
11(b), then:
(i) first, the Available Common
Stock shall be allocated among the
outstanding Rights so that each Right shall
entitle its holder to purchase the same
quantity of Available Common Stock and
(ii) second, each Right shall
additionally entitle its holder to (x)
purchase a fraction of a share of Preferred
Stock which when multiplied times the
Adjustment Number then in effect under the
terms of the Preferred Stock produces a
product equal to the remainder derived by
subtracting the number of shares of Common
Stock purchasable with each Right after the
allocation specified in clause (i) from the
number of shares of Common Stock which would
have been purchasable with such Right if the
Company had a sufficient number of shares of
Common Stock to permit the Right to be
exercisable entirely for Common Stock (such
remainder being referred to herein as the
"Unallocated Shares") or (y) receive cash in
an amount equal to the Current Value of the
Unallocated Shares (calculated as prescribed
in Section 11(c)(1) as of the Trading Day
immediately prior to the date of
substitution of cash for such Shares,) or
(z) receive any combination of the foregoing
so long as each Right entitles its
(Page 28 of 68)
<PAGE>
- 19 -
holder to receive the same amount of
fractional shares of Preferred Stock and
cash. For purposes of the preceding
sentence, the "Current Value" of a
particular number of Unallocated Shares
shall be equal to the product derived by
multiplying that particular number times the
greater of (i) the Current Market Price
(calculated as prescribed in Section 1) or
(ii) the closing price per share (calculated
as prescribed in Section 1) for the Common
Stock on the Trading Day immediately prior
to the day on which the substitution of cash
for such Unallocated Shares shall be made.
(iii) The fraction of a share of
Preferred Stock equal to the reciprocal of
the Adjustment Number in effect at the time
the term shall be applied shall be deemed to
be a "Common Equivalent Share" for purposes
of this Agreement. The Company shall take
all actions reasonably necessary so that as
nearly as possible each Common Equivalent
Share represents substantially the same
interest in the Company, has the same
dividend rate, and has other characteristics
as similar as possible to one share of
Common Stock. The term "Common Share"
whenever it is used in this Agreement means
both a share of Common Stock and a Common
Equivalent Share.
(iv) If circumstances after the
initial Trigger Date require the use of
Common Equivalent Shares, the Company shall
use its best efforts to obtain authorization
to issue a sufficient quantity of Common
Stock to permit Common Stock to be issued
upon exercise of the Rights and/or any
exercise of the exchange right under the
following Section. Each time the Company's
authorized Common Stock shall be increased,
the adjustment required under the preceding
paragraphs shall be redone to maximize the
amount of Common Stock issuable upon
exercise of the Rights. To the extent excess
authorized Common Stock remains after the
readjustment required by the preceding
sentence, the holder of any outstanding
Common Equivalent Share shall have the right
at any time to require the Company to
exchange that share for a share of Common
Stock.
(v) In no event, however, shall the
Company be obligated to reserve any Common
Stock for issuance under the Rights until
and unless a Triggering Event actually
occurs.
(vi) In no event shall the Company
issue any Preferred Stock except for
issuances caused by exercise of the Rights
and
(Page 29 of 68)
<PAGE>
- 20 -
except for issuances required by this
Section 11(c)(1) or Section 11(d)(6).
(2) Exchange Option:
(A) At any time after the occurrence of a Triggering Event and
prior to (i) the time any Person (other than an Exempt
Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding and (ii) the occurrence of a
Business Combination, the Board of Directors of the Company
may, at its option, cause the Company to exchange for all or
part of the then-outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to
the provisions of Section 7(e) hereof) for shares of Common
Stock 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 of this Agreement (such exchange ratio being referred
to herein as the "Exchange Ratio"). Any partial
--------------- exchange shall be effected on a pro rata
basis based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(B) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any particular Rights
pursuant to this Section 11(c)(2) and without any further
action and without any notice, the right to exercise those
particular Rights shall terminate and the only right a
holder shall have thereafter with respect to any of those
particular Rights shall be to receive the 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 and
in addition, the Company shall promptly mail a notice of any
such exchange to all of the holders of such Rights in
accordance with Section 25 of this Agreement; provided,
however, that the failure to give, any delay in --------
------- giving or any defect in, such notice shall not
affect the validity of such exchange. Each such notice of
exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in
the
(Page 30 of 68)
<PAGE>
- 21 -
event of any partial exchange, the
number of Rights which will be
exchanged. The Company shall not be
required to issue fractions of
shares of Common Stock or to
distribute certificates which
evidence fractional shares of Common
Stock. In lieu of such fractional
shares of Common Stock, the Company
shall pay to the registered holders
of the Rights Certificates with
regard to which such fractional
shares of Common Stock would
otherwise be issuable an amount in
cash equal to the product derived by
multiplying (x) the subject
fraction, by (y) the last sale price
of the Company's Common Stock on the
fifth Trading Day following the
public announcement of the exchange
by the Company, or, in case no such
sale takes place on such day, the
average of the closing bid and asked
prices on such day, in either case
on a when issued basis (taking into
account the exchange), as reported
in the principal consolidated
transaction reporting system with
respect to securities listed or
admitted to trading on the NYSE (or,
if the Company's Common Stock is not
so listed or traded, then as
determined in the manner provided
under the definition of "Current
Market Price," adjusted to take into
account the exchange). In
determining whether any particular
holder shall be obligated to receive
cash in lieu of a fractional share,
the holder shall be entitled to have
all Rights beneficially owned by
such holder aggregated so that only
one fractional share shall be
attributable to all the Rights so
beneficially owned.
(d) Antidilution Adjustments After the Trigger Date.
(1) In the event the Company shall at any time
after the Trigger Date effect any stock
split with respect to its Common Stock, then
the Purchase Price to be in effect after
such stock split shall be determined by
multiplying the Purchase Price in effect
immediately prior to such action by a
fraction, the numerator of which shall be
the number of Common Shares outstanding
immediately prior to such stock split and
the denominator of which shall be the number
of Common Shares outstanding immediately
after such stock split.
(2) In case the Company shall at any time after
the Trigger Date fix a record date for the
making of a distribution to holders of
Common Stock (including any such
distribution made in connection with a
(Page 31 of 68)
<PAGE>
- 22 -
reclassification of the Common Stock or a
consolidation or merger in which the Company
is the surviving corporation) of securities
(other than Common Stock and rights, options
or warrants referred to in Section
11(d)(3)), cash (other than a regular
periodic cash dividend at an annual rate not
in excess of (x) 125% of the annual rate of
the regular cash dividend paid on the Common
Stock during the immediately preceding
fiscal year or (y) in the event that a
regular cash dividend was not paid on the
Common Stock during such preceding fiscal
year, 5% of the Current Market Price of the
Common Stock on the date such regular cash
dividend was first declared), property,
evidences of indebtedness or assets, the
Purchase Price to be in effect after such
record date shall be determined by
multiplying the Purchase Price in effect
immediately prior to such record date by a
fraction, the numerator of which shall be
the Current Market Price per share of Common
Stock on such record date, less the fair
market value (as determined in good faith by
a majority of the Board of Directors of the
Company, whose determination shall be
described in a statement filed with the
Rights Agent) of such securities, cash,
property, evidences of indebtedness or
assets to be so distributed in respect of
one share of Common Stock, and the
denominator of which shall be such Current
Market Price per share of Common Stock on
such record date. Such adjustments shall be
made successively whenever such a record
date is fixed; and in the event that such
distribution is not made following such
adjustment, the Purchase Price shall be
readjusted to be the Purchase Price which
would have been in effect if such record
date had not been fixed.
(3) If the Company shall at any time after the
Trigger Date fix a record date for the
issuance of rights, options or warrants to
holders of Common Stock entitling them to
subscribe for or purchase Common Shares (or
securities convertible into Common Stock) at
a price per Common Shares (or, in the case
of a convertible security, having a
conversion price per Common Share) less than
the Current Market Price per share of Common
Stock on such record date and requiring that
the conversion or purchase right be
exercised within 45 calendar days after such
record date, the Purchase Price to be in
effect after such record date shall be
determined by multiplying the Purchase Price
in effect immediately prior to such record
date by a fraction, the numerator of which
shall be the number of shares of Common
Stock outstanding on such record date, plus
the number of Common
(Page 32 of 68)
<PAGE>
- 23 -
Shares which the aggregate exercise and/or
conversion price for the total number of
Common Shares which are obtainable upon
exercise and/or conversion of such rights,
options, warrants or convertible securities
would purchase at such Current Market Price,
and the denominator of which shall be the
number of Common Shares outstanding on such
record date, plus the number of additional
Common Shares which may be obtained upon
exercise and/or conversion of such rights,
options, warrants or convertible securities.
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 a majority of
the Board of Directors of the Company, whose
determination shall be described in a
statement filed with the Rights Agent and
shall be binding on the Rights Agent. Common
Stock owned by or held for the account of
the Company or any Subsidiary of the Company
shall not be deemed outstanding for the
purpose of any such computation. Such
adjustment shall be made successively
whenever such a record date is fixed; and in
the event that such rights, options or
warrants are not issued following such
adjustment, the Purchase Price shall be
readjusted to be the Purchase Price which
would have been in effect if such record
date had not been fixed.
(4) 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 combination 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 or
exercisable for Common Shares, stock
dividends or issuance of rights, options or
warrants referred to in this Section 11,
hereafter made by the Company to holders of
its Common Shares, shall not be taxable to
such stockholders.
(5) After each adjustment of the Purchase Price
pursuant to any of subsections (1) - (4)
immediately above, the number of Common
Shares purchasable with each Right shall be
adjusted to the quotient derived by dividing
the Purchase Price as constituted after
giving effect to such adjustment into the
Exercise Amount.
(Page 33 of 68)
<PAGE>
- 24 -
(6) The Company shall not take any of the
actions described in any of subsections (1)
- (3) above at a time when any Common
Equivalent Shares are outstanding unless the
Company shall take substantively identical
actions with respect to the outstanding
Common Stock and outstanding Common
Equivalent Shares. Conversely, the Company
shall not take any actions with respect to
outstanding Common Equivalent Shares
analogous to those described in any of
subsections (1) - (3) above unless the
Company shall take substantively identical
actions with respect to the outstanding
Common Stock and outstanding Common
Equivalent Shares.
(e) Recapitalizations.
(1) In the event that after the Trigger Date,
the Company shall issue any securities in a
reclassification of the Common Stock or in
any other recapitalization (including any
such reclassification in connection with a
consolidation or merger in which the Company
is the surviving corporation), then in each
such event:
(A) the property purchasable with each
Right shall be adjusted to be
whatever the owner of that Right
would have owned by reason of both
(i) the exercise of that Right
immediately prior to such
recapitalization or reclassification
and (ii) the effect of that
recapitalization or reclassification
on the property assumed to have been
received in such exercise.
(B) The Exercise Amount shall be
allocated among the shares of stock
and/or other units of property for
which the Right shall be exercisable
after giving effect to the
adjustment cited in clause (A) based
on the fair market value of such
property to determine the Purchase
Price for each such share and/or
unit.
(2) To illustrate the intended operation of this
provision, assume that: (i) immediately
prior to a reclassification, each Right were
exercisable for 10 Common Shares and the
Exercise Amount were $150 (resulting in a
purchase price of $15 per Common Share);
(ii) as a result of the Reclassification,
each outstanding shares of Common Stock is
reclassified into two New Common Shares and
one Series B Share; and (iii) immediately
after the reclassification, the market value
of each New Common Shares was $30 and the
market value of each Series B share was $15.
Immediately after the assumed
reclassification, each Right would be
exercisable for
(Page 34 of 68)
<PAGE>
- 25 -
20 New Common Shares at a purchase price of
$6 per share and ten Series B Shares at a
purchase price of $3 per share.
(f) In the event a Triggering Event shall occur, or in the
event there shall be a recapitalization or reclassification pursuant to Section
11(e), or in the event there shall be any merger or other action which shall
cause a change in the property purchasable with the Rights under Section 13, or
in the event there shall be any other occurrence or development which shall
cause the property purchasable with the Rights to consist in whole or in part of
anything other than Preferred Stock, then and in any such event:
(1) The certificates representing the Rights
shall automatically be deemed to represent
the adjusted terms of the Rights without the
need to replace such certificates. The
Company shall thereafter make arrangements
for the production of certificates
representing the revised terms of the Rights
resulting from such adjustment and shall use
such certificates to represent Rights for
which new certificates shall be issuable by
reason of a transfer of record ownership or
by reason of a request by the existing
record owner for a replacement certificate
representing the revised terms of the
Rights.
(2) The principles underlying the adjustment
provisions in this Section 11 and elsewhere
in this Agreement shall be applied to fairly
and proportionately adjust the shares or
other property purchasable with the Rights
and the purchase price for each share or
other property unit purchasable with the
Rights after giving effect to the
adjustments required by reason of such event
to reflect any subsequent capital changes or
other events. Without limiting by
implication the generality of the preceding
sentence, the provisions of Sections 7, 9,
10, 12, 13, 14 and 24 of this Agreement
which related to the Preferred Stock shall
after the occurrence of any such event apply
in a substantively identical manner to the
shares or other property purchasable with
the Rights after giving effect to such
event.
(g) Before taking any action that would cause an adjustment
reducing the Purchase Price per share at which shares are purchasable with the
Rights below the par value of those shares, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares at
such adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the
(Page 35 of 68)
<PAGE>
- 26 -
occurrence of such event the issuance to the holder of any Right exercised after
such record date the shares of Common Stock and other securities, cash or
property of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock and other securities, cash or property of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or other
securities, cash or property upon the occurrence of the event requiring such
adjustment.
(i) The Company covenants and agrees that on and after the
Trigger Date neither it nor any combination of it and its Subsidiaries shall (i)
consolidate with any other Person, or (ii) merge with or into any other Person
or (iii) directly or indirectly sell, lease, or otherwise transfer or dispose of
(in one transaction or a series of related transactions) assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries taken as a whole to any other Person if (A) at the time of or
immediately after such consolidation, merger, sale, lease, transfer, or
disposition there are any rights, warrants, securities or other instruments
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (B)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, lease, transfer, or disposition the stockholders (or equity holders) of
the Person who constitutes, or would constitute, the Principal Party in such
transaction shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (C) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights. The Company shall not consummate any such consolidation, merger,
sale, lease, transfer, or disposition unless prior thereto the Company and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(i).
(j) The Company covenants and agrees that, after the Trigger
Date it will not, except as permitted by Section 11(c)(2) of this Agreement,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will, directly or
indirectly, diminish or otherwise eliminate the benefits intended to be afforded
by the Rights.
Section 12. Certification of Adjustments. 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 stock then purchasable with the Rights a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if no Rights Certificates have been issued, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment. Any adjustment to be made
(Page 36 of 68)
<PAGE>
- 27 -
pursuant to Sections 11 and 13 of this Agreement shall be effective as of the
date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power.
- -------------
(a) A "Business Combination" shall be deemed to occur in the
event that, in or following a Triggering Event, (i) the Company shall, directly
or indirectly, consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(i) and Section 11(j) of this Agreement) in a transaction in which the Company
is not the continuing, resulting or surviving corporation of such merger or
consolidation, (ii) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(i) and Section 11(j) of this
Agreement) shall, directly or indirectly, consolidate with the Company, or shall
merge with and into the Company, in a transaction in which the Company is the
continuing, resulting or surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all or part of the Common
Stock shall be changed (including, without limitation, any conversion into or
exchange for securities of the Company or of any other Person, cash or any other
property), (iii) the Company shall, directly or indirectly, effect a share
exchange in which all or part of the Common Stock shall be changed (including,
without limitation, any conversion into or exchange for securities of any other
Person, cash or any other property) or (iv) the Company shall, directly or
indirectly, sell, lease, exchange, mortgage, pledge or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall directly or indirectly
sell, lease, exchange, mortgage, pledge or otherwise transfer or dispose of), in
one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
any of its Subsidiaries in one or more transactions each and all of which comply
with Section 11(i) and Section 11(j) of this Agreement).
In the event of a Business Combination, proper provision shall
be made so that each holder of a Right (except as otherwise provided in this
Agreement) shall thereafter have the right to receive, upon the exercise of each
Right, such number of shares of Common Stock of the Principal Party as shall be
equal to the result obtained by dividing the Exercise Amount in effect prior to
the Business Combination by 50% of the Current Market Price per share of the
Common Stock of such Principal Party immediately prior to the consummation of
such Business Combination. All shares of Common Stock of any Person for which
any Right may be exercised after consummation of a Business Combination as
provided in this Section 13(a) shall, when issued upon exercise thereof in
accordance with this Agreement, be duly and validly authorized and issued, fully
paid, ensure that the benefits intended to be derived under this Section 13 upon
the exercise of the Rights are assured to the holders thereof.
(Page 37 of 68)
<PAGE>
- 28 -
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractional
Rights or to distribute Rights Certificates which evidence fractional Rights.
(b) The Company shall permit the issuance and trading of
Preferred Stock in fractional shares such that the smallest fractional share
tradeable at any particular time shall equal the reciprocal of the Adjustment
Number in effect at that particular time. The Company shall not be required to
issue fractions of shares of Preferred Stock (other than fractions which are
integral multiples of the reciprocal of the Adjustment Number) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of the
reciprocal of the Adjustment Number). Fractions of shares of Preferred Stock
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Stock. In lieu
of fractional shares of Preferred Stock that are not integral multiples of the
reciprocal of the Adjustment Number, the Company may at its option (i) issue
scrip or warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which shall
entitle the holder to receive the reciprocal of the Adjustment Number of one
share of Preferred Stock upon the surrender of such scrip or warrants
aggregating the reciprocal of the Adjustment Number of one share of Preferred
Stock, or (ii) pay to the registered holders of Rights Certificates at the time
such Rights Certificates are exercised as provided in this Agreement an amount
in cash equal to the same fraction of the relevant closing price of a share of
Preferred Stock. For purposes of this Section 14(b), the relevant closing price
of a share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to the second sentence of the definition of
"Current Market Price" in Section 1) for the Trading Day immediately prior to
the date of such exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or Common Equivalent Share or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the
Rights Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the product derived by
multiplying (x) the subject fraction, by (y) the closing price of a share of
Common Stock (as determined pursuant to the second sentence of the definition of
"Current Market Price" in Section 1) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by his acceptance thereof expressly
waives any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as otherwise provided in this Agreement).
(Page 38 of 68)
<PAGE>
- 29 -
Section 15. Rights of Action. Except as otherwise provided, all rights
of action in respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, any
registered holders of associated Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, any share of associated
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right, 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 rights pursuant to 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 Rights Holders Concerning Transfer and
Ownership of Rights. Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates will
be transferable on the registry books of the Rights Agent only 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 a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificate or the associated Common Stock
certificate made by anyone other than the Company, the transfer agent for the
stock purchasable with such Right 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. Rights Holder Not Deemed a Stockholder. No holder, as such,
of any Rights Certificate shall be entitled to vote or to receive dividends or
distributions or shall be deemed for any purpose the holder of Preferred Stock
or any other securities, cash or other property which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained in this Agreement or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company, including, without limitation, any right (i) to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, (ii) to give or withhold consent to any corporate action,
(iii) to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 24), (iv) to receive dividends, distributions or
subscription rights, (v) to institute, as a holder of Preferred Stock or other
securities issuable on exercise of the
(Page 39 of 68)
<PAGE>
- 30 -
Rights represented by any Rights Certificate, any derivative action on behalf of
the Company, or otherwise, until and only to the extent that the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions of this Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
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, willful misconduct or breach of this Agreement 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.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Preferred Stock or 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 reasonably believed by it to
be genuine and to be signed, executed and, when necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
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 document 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 Rights 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 Rights Certificate so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificate either in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights
(Page 40 of 68)
<PAGE>
- 31 -
Agent may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or the determination of
Current Market Price) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be specifically prescribed in this Agreement) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman,
the Chief Executive Officer, the President, the Chief Financial Officer, the
General Counsel, the Treasurer, any Vice President or the 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 the
negligence, bad faith, willful misconduct or breach of this Agreement by it or
its attorneys or agent.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but a 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 of this
Agreement (except the due execution and delivery of this Agreement by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any change or
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23 or the ascertaining of the
existence of facts that would require any such
(Page 41 of 68)
<PAGE>
- 32 -
change or adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock, Common Stock or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock, 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 performance
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, the Chief Executive Officer, the President the Chief Financial
Officer, the General Counsel, the Treasurer, any Vice President or the Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director, officer or
employ 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 the Rights Agent were not
serving as such under this Agreement. Nothing in this Agreement 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.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon notice of 30 days in writing mailed to the Company and to each transfer
agent of the Common Stock or Preferred Stock by registered or certified mail and
to the holders of the Rights Certificates by either (i) first-class mail or (ii)
by disclosure in a periodic report of the Company required to be filed under
(Page 42 of 68)
<PAGE>
- 33 -
the Exchange Act, any permitted report under the Exchange Act, a press release
of the Company or in any proxy or other communication of the Company with its
stockholders. The Company may remove the Rights Agent or any successor Rights
Agent upon notice of 30 days in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
or Preferred Stock by registered or certified mail, and to the holders of the
Rights Certificates by either (i) first-class mail or (ii) by disclosure in a
periodic report of the Company required to be filed under the Exchange Act, any
permitted report under the Exchange Act a press release of the Company or in any
proxy or other communication of the Company with its stockholders. 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. Notwithstanding any
other provision of this Agreement, in no event shall the resignation or removal
of a Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. 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 any holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then the incumbent Rights Agent or the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (i) 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 conduct a banking, corporate trust or stock transfer business in the State of
New York) in good standing, which is authorized under such laws to exercise
corporate trust or 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 or (ii) a subsidiary of a corporation described in clause (i) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing, with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock; the Company shall also either (i) mail a
notice thereof in writing to the registered holders of the Rights Certificates
or (ii) make a disclosure with respect thereto in a periodic report of the
Company required to be filed under the Exchange Act, any permitted report under
the Exchange Act, a press release of the Company or in any proxy or other
communication of the Company with its stockholders. 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.
(Page 43 of 68)
<PAGE>
- 34 -
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights Certificates to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by a majority of the Board of Directors of the
Company to reflect any adjustment or change in the Purchase Price per share and
the number or kind or class of securities, cash or other property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Trigger Date and (ii) the Expiration
Date, redeem all but not less than all of the then-outstanding Rights at a
redemption price of $.01 per Right (the "Redemption Price") appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement. The Company may, at its option, pay
the Redemption Price in cash, shares (including fractional shares) of Common
Stock (based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors. The redemption of the Rights by the Board of Directors of the
Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company in its sole discretion may
establish.
(b) At the time and date of effectiveness set forth in any
resolution of the Board of Directors of the Company ordering the redemption of
the Rights, 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; provided, however,
that such resolution of the Board of Directors of the Company may be revoked,
rescinded or otherwise modified at any time prior to the time and date of
effectiveness set forth in such resolution, in which event the right to exercise
will not terminate at the time and date originally set for such termination by
the Board of Directors of the Company. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
The Company shall also give notice of such redemption to the Rights Agent. The
Company may elect to 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 or, prior
to the issuance of Rights Certificates, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the manner provided in
this Agreement shall be deemed given, whether or not the holder receives the
notice. In connection with any redemption permitted under this Section 23, the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the issuance of the Rights Certificates,
on the registry books of the transfer agent for the Common Stock, and upon such
action, all outstanding Rights Certificates
(Page 44 of 68)
<PAGE>
- 35 -
shall be null and void without any further action by the Company. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23, and other than in connection with the purchase of
shares of Common Stock prior to the earlier of the Trigger Date and the
Expiration Date.
Section 24. Notice of Certain Events. In case the Company, on or after
the Distribution Date, shall propose to (a) pay any dividend payable in stock of
any class to the holders of its Common Shares or to make any other distribution
to the holders of its Common Shares (other than a regular periodic cash dividend
at an annual rate not in excess of 125% of the annualized rate of the cash
dividend paid on the Common Shares during the immediately preceding fiscal
year), or (b) offer to the holders of its Common Shares rights, options or
warrants to subscribe for or to purchase any additional shares of Common Shares
or shares of stock of any class or any other securities, rights or options, or
(c) effect any reclassification of the Common Shares (other than a
reclassification involving only the subdivision of outstanding shares of Common
Shares, a change in the par value of such Common Shares or a change from par
value to no par value), or (d) directly or indirectly effect any consolidation
or merger into or with, or effect any sale, lease, exchange, or other transfer
or disposition (or to permit one or more of its Subsidiaries to effect any sale,
lease, exchange or other transfer or disposition), in one transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any other Person, or
(e) 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 any
record date for the purposes of such stock dividend or distribution of rights,
or the date on which such reclassification, consolidation, merger, sale, lease,
exchange, transfer, disposition, liquidation, dissolution or winding up is to
take place and if such holders will or may participate therein, the date of
participation therein by the holders of Common Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Common Shares for purposes of such action, and in the
case of any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein, if any, by the
holders of Common Shares, whichever shall be the earlier. The failure to give
notice as 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.
In case any Triggering Event or Business Combination shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 25, notice of the occurrence of such Triggering Event or Business
Combination, which shall specify the Triggering Event or Business Combination
and include a description of the consequences of such event to holders of Rights
under Section 11 or 13.
(Page 45 of 68)
<PAGE>
- 36 -
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 Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
The Allstate Corporation
2775 Sanders Road-F8
Northbrook, Illinois 60062-6127
Attn: 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 Rights 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
P.O. Box 2500
Jersey City, New Jersey 07303
Attn: .................................
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate 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 (or, if no Rights Certificates have been issued, if sent by
first-class mail, postage prepaid, addressed to each holder of a certificate
representing shares of Common Stock at the address of such holder as shown on
the Company's Common Stock registry books).
Section 26. Supplements and Amendments.
--------------------------
(a) At any time prior to the Trigger Date, a majority of the
Board of Directors of the Company may, and the Rights Agent shall, if so
directed, supplement or amend any provision of this Agreement, without the
approval of any holders of Rights, in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other revisions or changes with
respect to the Rights or the Agreement which the Company may deem necessary or
desirable, including without limitation the modification or amendment of the
definition of Acquiring Person set forth in Section 1(a), the amendment of the
definition of Exempt Person in Section 1(g) to include any other Person or
Persons, the amendment of the Purchase Price set forth in Section 1(w) or the
extension or shortening of the period for redemption of the Rights.
(b) Except as otherwise provided in Section 26(c):
(Page 46 of 68)
<PAGE>
- 37 -
(1) The Board of Directors of the Company shall
have the exclusive power and authority to
administer this Agreement and to exercise
all rights and powers specifically granted
to the Board of Directors or the Company, or
as may be necessary or advisable in the
administration of this Agreement, including,
without limitation, the right and power to
(i) interpret the provisions of this
Agreement and (ii) make all determinations
deemed necessary or advisable for the
administration of this Agreement (including
a determination to redeem or not redeem the
Rights, to exchange or not exchange the
Rights for Common Stock, or to amend or
supplement this Agreement).
(2) All such actions, calculations,
interpretations and determinations
(including, for purposes of clause (y)
below, all omissions with respect to the
foregoing) which are done or made by the
Board of Directors of the Company in good
faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent,
the holders of the Rights and all other
Persons and (y) not subject the Board of
Directors of the Company to any liability to
the holders of the Rights.
(c) From and after the Trigger Date:
(1) No amendment or other change shall be made
in this Agreement or the terms of the Rights
which is prohibited by Section 11(j) or
Section 13(f) or which would otherwise
adversely affect the interests of the
holders of Rights Certificates (other than
an Acquiring Person or any other Person in
whose hands the Rights are void under the
provisions of Section 7(e)). Notwithstanding
the foregoing, a majority of the Board of
Directors may, and the Rights Agent shall,
if so directed, amend this Agreement prior
to the Trigger Date effective upon the
Trigger Date.
(2) The Board of Directors of the Company shall
not be entitled to exercise the powers
specified in Section 26(b) after the Trigger
Date unless the Board of Directors can
establish by clear and convincing evidence
that its action satisfies the requirement in
Section 26(c)(1).
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.
(Page 47 of 68)
<PAGE>
- 38 -
Section 28. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of Rights any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights.
Section 29. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid and enforceable
under applicable law, but if any provision of this Agreement shall be held to be
prohibited by or unenforceable under applicable law, (i) such provision shall be
applied to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (ii) all other provisions of this
Agreement shall remain in full force and effect. No rule of strict construction,
rule resolving ambiguities against the person who drafted the provision giving
rise to such ambiguities, or other such rule of interpretation shall be applied
against any party with respect to this Agreement.
Section 30. Governing Law. This Agreement and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the internal laws of Delaware applicable to contracts to be made
and performed entirely within Delaware.
Section 31. Counterparts. This Agreement may be executed in counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and both such counterparts shall together constitute but one and the
same instrument.
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 of this
Agreement.
Section 33. Grammatical Construction. Throughout this Agreement where
such meanings would be appropriate, (a) any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms (e.g., references to "he"
shall also include "she" and "it" and references to "who" and "whom" shall also
include "which") and (b) the plural form of nouns and pronouns shall include the
singular and vice-versa.
(Page 48 of 68)
<PAGE>
- 39 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
The Allstate Corporation
By: ......................................
Title: ...................................
First Chicago Trust Company of New York, as
Rights Agent
By: ......................................
Title: ...................................
(Page 49 of 68)
<PAGE>
Exhibit A
---------
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF JUNIOR PARTICIPATING PREFERRED STOCK, SERIES A
OF
THE ALLSTATE CORPORATION
PURSUANT TO SECTION 151 OF THE CORPORATION LAW
OF THE STATE OF DELAWARE
The Allstate Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware, in accordance with
the provisions of Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the Board of
Directors on __________________ __, ___, adopted the following resolution
creating a series of _________ shares of Preferred Stock designated as Junior
Participating Preferred Stock, Series A:
RESOLVED, that pursuant to the authority vested in the Board
of Directors by ARTICLE FOUR of the Certificate of Incorporation and out of the
Preferred Stock authorized therein, the Board hereby authorizes that a series of
Preferred Stock of the Corporation be, and it hereby is, created and approved
for issuance in accordance with the Rights Agreement dated as of_____________,
____, between the Corporation and ________________, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof be, and hereby are, as
follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Junior Participating Preferred Stock, Series A" (the
"Series A Preferred Stock") and the number of shares constituting such series
shall be __________. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
(Page 50 of 68)
<PAGE>
- 2 -
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock and of
any other junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the fifteenth day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $25.00 or (b) the Adjustment Number (as defined
below) times the aggregate per share amount of all cash dividends, and the
Adjustment Number times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. The "Adjustment Number" shall
initially be 1000. In the event the Corporation shall at any time after
_________ ___, ___ (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock into a
greater number of shares or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $25.00 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
(Page 51 of 68)
<PAGE>
- 3 -
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the
holder thereof to a number of votes equal to the Adjustment Number (as adjusted
from time to time pursuant to Section 2(A) hereof) on all matters submitted to a
vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, by law or in the
Certificate of Incorporation or By-Laws, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(i) If at any time dividends on any Series A
Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein
called a "default period") that shall extend until such time
when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly
period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, (1) the number of
Directors shall be increased by two, effective as of the time
of election of such Directors as herein provided, and (2) the
holders of Series A Preferred Stock and the holders of other
Preferred Stock upon which these or like voting rights have
been conferred and are exercisable (the "Voting Preferred
Stock") with dividends in arrears equal to six quarterly
dividends thereon, voting as a class, irrespective of series,
shall have the right to elect such two Directors.
(ii) During any default period, such voting right of
the holders of Series A Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph
(iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of
stockholders, provided that such voting right shall not be
exercised unless the holders of at least one-third in number
of the shares of Voting Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the
holders of Common Stock
(Page 52 of 68)
<PAGE>
- 4 -
shall not affect the exercise by the holders of Voting
Preferred Stock of such voting right.
(iii) Unless the holders of Voting Preferred Stock
shall, during an existing default period, have previously
exercised their right to elect Directors, the Board of
Directors may order, or any stockholder or stockholders owning
in the aggregate not less than 10% of the total number of
shares of Voting Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the
holders of Voting Preferred Stock, which meeting shall
thereupon be called by the Chairman of the Board, the
President, an Executive Vice President, a Vice President or
the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Voting Preferred
Stock are entitled to vote pursuant to this paragraph (B)(iii)
shall be given to each holder of record of Voting Preferred
Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 10
days and not later than 60 days after such order or request
or, in default of the calling of such meeting within 60 days
after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in
the aggregate not less than 10% of the total number of shares
of Voting Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (B)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, after the holders of
Voting Preferred Stock shall have exercised their right to
elect-Directors voting as a class, (x) the Directors so
elected by the holders of Voting Preferred Stock shall
continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may be
filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class or classes of
stock which elected the Director whose office shall have
become vacant. References in this paragraph (B) to Directors
elected by the holders of a particular class or classes of
stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Voting Preferred Stock
as a class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Voting Preferred Stock as
a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Certificate of
Incorporation or By-Laws irrespective of any increase made
pursuant to the provisions of paragraph (B) of this Section 3
(such
(Page 53 of 68)
<PAGE>
- 5 -
number being subject, however, to change thereafter in any
manner provided by law or in the Certificate of Incorporation
or By-Laws). Any vacancies in the Board of Directors effected
by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining
Directors.
(C)......Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up), with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(Page 54 of 68)
<PAGE>
- 6 -
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereto. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation or Bylaws or otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (A) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, and (ii) an aggregate amount per
share, equal to the Adjustment Number (as adjusted from time to time pursuant to
Section 2(A) hereto times the aggregate amount to be distributed per share to
holders of Common Stock, or (B) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation. merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock then outstanding shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number (as
adjusted from time to time pursuant to Section 2(A) hereof) times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
(Page 55 of 68)
<PAGE>
- 7 -
Section 9. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this ___ day of _______, ___.
-------------------------------------------
(Page 56 of 68)
<PAGE>
Exhibit B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- ________Rights
NOT EXERCISABLE AFTER ______________ [EXPIRATION DATE] OR EARLIER IF
NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO
REDEMPTION OR EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
Rights Certificate
The Allstate Corporation
This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entities the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of ___________, ___ (the "Rights
Agreement") between The Allstate Corporation, a Delaware corporation (the
"Company"), and ______________, a _____________ (the "Rights Agent"), unless
notice of redemption or exchange shall have been previously given by the
Company, to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (New
York, New York time) on __________ __, ____, at the principal corporate trust
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-thousandth of a fully paid nonassessable share of the Junior
Participating Preferred Stock, Series A, par value $.01 per share, of the
Company (the "Preferred Stock"), at a purchase price (the "Purchase Price") of
$____ per one one-thousandth share, upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase duly executed. The
Purchase Price may be paid in cash or by certified bank check or bank draft
payable to the order of the Company.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used but not defined in this Rights Certificate that are
defined in the Rights Agreement shall have the same meanings ascribed to them in
the Rights Agreement. Copies of the Rights Agreement
(Page 57 of 68)
<PAGE>
- 2 -
are on file at the principal executive offices of the Company and the above-
mentioned office of the Rights Agent.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Preferred Stock or other securities, cash or other
property which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment upon the
happening of certain events.
If the Rights evidenced by this Rights Certificate are or were
formerly beneficially owned, on or after the earlier of the Distribution Date
and the Trigger Date, by (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a direct or indirect transferee of an Acquiring
Person (or of any Associate or Affiliate of an Acquiring Person) who becomes or
becomes entitled to be a transferee after the Acquiring Person becomes such; or
(iii) a direct or indirect transferee of an Acquiring Person (or of an Associate
or Affiliate of such Acquiring Person) who becomes or becomes entitled to be a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a direct or indirect transfer
(whether or not for consideration) from the Acquiring Person (or from an
Associate or Affiliate of such Acquiring Person) to holders of equity interests
in such Acquiring Person (or to holders of equity interests in any Associate or
Affiliate of such Acquiring Person) or to any Person with whom the Acquiring
Person (or an Associate or Affiliate of such Acquiring Person) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a direct or indirect transfer which a majority of the Board of
Directors of the Company determines is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) of the Rights Agreement, such Rights shall, immediately upon the occurrence
of a Triggering Event and without any further action, be null and void and no
holder of such Rights (including any subsequent holder) shall have any rights
whatsoever with respect to such Rights whether under the Rights Agreement or
otherwise, provided, however, that, in the case of transferees under clause (ii)
or clause (iii) above, any Rights beneficially owned by such transferee shall be
null and void only if and to the extent such Rights were formerly beneficially
owned by a Person who was, at the time such Person beneficially owned such
Rights, or who later became, an Acquiring Person or an Affiliate or Associate of
such Acquiring Person.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal corporate trust office of the
Rights Agent, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Preferred Stock or other property
as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of whole
Rights not exercised.
(Page 58 of 68)
<PAGE>
- 3 -
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (a) may be redeemed by the Board of Directors of
the Company at its option at a redemption price of $.01 per Right, subject to
adjustment, payable, at the election of the Company, in cash or shares
(including fractional shares) of Common Stock or such other consideration as the
Board of Directors of the Company may determine, at any time prior to the
earlier of (i) the Trigger Date and (ii) the Expiration Date, or (b) may be
exchanged by the Board of Directors of the Company, at its option, in whole or
in part, for shares of the Company's Common Stock on a one for-one basis, at any
time after the Trigger Date and prior to (i) any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becoming
the Beneficial Owner of 50% or more of the Common Stock then outstanding and
(ii) the occurrence of a Business Combination.
No fractional shares of Preferred Stock (other than fractions
that are integral multiples of one one-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depository receipts)
are required to be issued upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof the Company may elect to (i) evidence fractional
shares by depositary receipts, (ii) issue scrip or warrants in registered form
(either represented by a certificate or uncertificated) or in bearer form
(represented by a certificate) which shall entitle the holder to receive a full
share upon the surrender of such scrip or warrants aggregating a full share, or
(iii) make a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or to receive dividends on, or shall be deemed for any purpose
the holder of, Preferred Stock or any other securities, cash or property which
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or this Certificate be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company,
including, without limitation, 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 to institute, as
a holder of Preferred Stock or other securities issuable on the exercise of the
Rights represented by this Certificate, any derivative action, or otherwise,
until and only to the extent the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
* * * * *
(Page 59 of 68)
<PAGE>
- 4 -
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal dated as of __________, ___.
The Allstate Corporation
By: ....................
Title: .................
Countersigned:
(Page 60 of 68)
<PAGE>
- 5 -
First Chicago Trust Company of New York
By: .............................
Authorized Officer
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE RIGHTS
CERTIFICATE.)
FOR VALUE RECEIVED the undersigned _______________________
hereby sells, assigns and transfers unto ______________________________________
- ------------------------------------------------------------------------------
(Please print name and address of transferee)
______ Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
_________ with a power of attorney to transfer the said Rights and a Rights
Certificate evidencing such Rights on the books of _____________, with full
power of substitution.
A new Rights Certificate evidencing the remaining balance, if
any, of such Rights not hereby sold, assigned and transferred shall be mailed to
and registered in the name of the undersigned unless such person requests that
such Rights Certificate be registered in the name of and mailed to (complete
only if a Rights Certificate evidencing any remaining balance of Rights is to be
registered in a name other than the undersigned):
Please insert Social Security or
other identifying number of transferee: ______________________
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
(Page 61 of 68)
<PAGE>
CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES BY CHECKING THE
APPROPRIATE BOXES THAT:
(1) this Rights Certificate or any Rights evidenced hereby
"are" are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned "did" did not acquire any of the Rights evidenced
by this Rights Certificate from any Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated: ..................... ..................................
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as approved by
the Stock Transfer Association.
(Page 62 of 68)
<PAGE>
NOTICE
The signature on the foregoing Form of Assignment must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an assignment or other transfer of this Rights Certificate or any Rights
evidenced hereby, will affix a legend to that effect on any Rights Certificate
issued in whole or partial exchange for this Rights Certificate.
(Page 63 of 68)
<PAGE>
FORM OF ELECTION TO PURCHASE
(TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE)
To: The Allstate Corporation
The undersigned hereby irrevocably elects to exercise
___________ Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock or other securities, cash or other property issuable upon the
exercise of such Rights and requests that certificates for such shares or other
securities be issued in the name of, and such cash or other property be paid to:
Please insert social security
or other identifying number:______________________________
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
A new Rights Certificate evidencing the remaining balance, if
any, of such Rights not hereby exercised shall be mailed to and registered in
the name of the undersigned unless such person requests that such Rights
Certificate be registered in the name of and mailed to (complete only if Rights
Certificate evidencing any remaining balance of Rights is to be registered in a
name other than the undersigned):
Please insert social security
or other identifying number: ____________________________
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
(Page 64 of 68)
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate " are "
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned " did " did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ................... ...................................
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as approved by
the Stock Transfer Association.
NOTICE
The signature on the foregoing Form of Election to Purchase
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an assignment or other transfer of this Rights Certificate
or any Rights evidenced hereby, will affix a legend to that effect on any Rights
Certificate issued in whole or partial exchange for this Rights Certificate.
(Page 65 of 68)
<PAGE>
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On February 12, 1999, the Board of Directors of The Allstate
Corporation (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.01 per share (the "Common Stock"), of the Company. The distribution is payable
to stockholders of record at the close of business on February 26, 1999 (the
"Record Date"), and with respect to a Common Stock that become outstanding after
the Record Date and prior to the earliest of the Distribution Date (as defined
below), the redemption of the Rights, the exchange of the Rights, and the
expiration of the Rights (and, in certain cases, following the Distribution
Date). Each Right entities the registered holder to purchase from the Company
one one-thousandth of a share of Junior Participating Preferred Stock, Series A,
par value $.01 per share, of the Company (the "Preferred Shares") at a price of
$150 per one one-thousandth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and as Rights Agent (the
"Rights Agent").
The Rights will be evidenced by Common Share certificates and
not by separate certificates until the earlier to occur of (i) the tenth day
after the date it is publicly announced that a person or group other than
certain exempt persons (an "Acquiring Person"), together with persons affiliated
or associated with such Acquiring Person, has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Shares (a
"Triggering Event") and (ii) the tenth business day after the commencement or
public disclosure of an intention to commence a tender offer or exchange offer
by a person other than an exempt person if, upon consummation of the offer, such
person could acquire beneficial ownership of 15% or more of the outstanding
Common Stock (the earlier of such dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), the Rights will be transferred with and only with
the Common Stock, and the surrender for transfer of any certificate for Common
Stock will also constitute the transfer of the Rights associated with such
Common Shares. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights will first become exercisable after the
Distribution Date (unless sooner redeemed or exchanged). 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
(Page 66 of 68)
<PAGE>
- 2 -
receive dividends. The Rights will expire at the close of business on February
12, 2009 (the "Expiration Date"), unless earlier redeemed or exchanged by the
Company as described below.
In the event that a person becomes an Acquiring Person, each
Right (other than Rights that are or were beneficially owned by the Acquiring
Person and certain related persons and transferees, which will thereafter be
void) shall thereafter be exercisable not for Preferred Shares, but for a number
of shares of Common Stock having a market value of two times the exercise price
of the Right. In the event that, at the time or after a person becomes an
Acquiring Person, the Company is involved in a merger or other business
combination in which (i) the Company is not the surviving corporation, (ii)
Common Stock is changed or exchanged, or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, then each Right (other than
Rights that are or were owned by the Acquiring Person and certain related
persons and transferees, which will thereafter be void) shall thereafter be
exercisable for a number of shares of common stock of the acquiring company
having a market value of two times the exercise price of the Right.
In addition, at any time after a person has acquired
beneficial ownership of 50% or more of the outstanding Common Stock, the Company
may elect to exchange all or part of the Rights (excluding void Rights held by
an Acquiring Person and certain related persons and transferees) for Common
Stock on a one-for-one basis.
The Purchase Price payable, and the number and kind of
securities, cash or other 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 or distribution on, or a subdivision or combination of, the
Common Stock, (ii) upon the grant to holders of the Common Stock of rights,
options or warrants to subscribe for Common Stock or securities convertible into
Common Stock at less than the current market price, (iii) upon the distribution
to holders of the Common Stock of securities, cash, evidences of indebtedness or
assets (excluding regular periodic cash dividends out of earnings or retained
earnings) and (iv) in connection with recapitalizations of the Company or
reclassifications of the Common Stock.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereto, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
(Page 67 of 68)
<PAGE>
- 3-
At any time prior to the earlier of (i) the occurrence of a
Triggering Event and (ii) the Expiration Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The Redemption Price will be payable in cash,
shares (including fractional shares) of Common Stock or any other form of
consideration deemed appropriate by the Board of Directors. Immediately upon
action of the Board of Directors ordering redemption of the Rights, the ability
of holders to exercise the Rights will terminate and the only rights of such
holders will be to receive the Redemption Price.
At any time prior to the occurrence of a Triggering Event, the
Board of Directors of the Company may amend or supplement the Rights Agreement
without the approval of the Rights Agent or any holder of the Rights.
Thereafter, the Rights Agreement may not be amended or changed in any manner
which would adversely affect the interests of the holders of the Rights (other
than an Acquiring Person or an affiliate or associate thereof).
The Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment equal to the greater of $25 per share
and 1,000 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment equal to the greater of $100 per share and
1,000 times the payment made per share of Common Stock. Each Preferred Share
will have 1,000 votes per share, voting together with the Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the 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 prior to the occurrence of a Triggering Event, because
until such time the Rights may generally be redeemed by the Company at $.01 per
Right.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to an Application for
Registration on Form 8-A and as an Exhibit to the Company's Current Report on
Form 8-K. 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.
(Page 68 of 68)
