SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 22, 1997
SNAP-ON INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-7724 39-0622040
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number Identification
incorporation Number)
2801 80th Street
Kenosha, Wisconsin 53141-1410
(Address of principal executive offices) (Zip Code)
(414) 656-5200
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 22, 1997, the Board of Directors of Snap-
on Incorporated (the "Company") approved the extension of
the Company's existing rights by adopting a stockholder
rights plan substantially similar to the Company's
current rights plan. Pursuant to the new Rights
Agreement between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "1997 Rights
Agreement"), one Right will be issued for each
outstanding share of common stock, par value $1.00 per
share, of the Company simultaneous with the expiration of
the existing rights (November 3, 1997). Each of the new
Rights will entitle the registered holder to purchase
from the Company one one-hundred and fiftieth of a share
of Series A Junior Preferred Stock, par value $1.00 per
share, at a price of $190.00 per one one-hundred and
fiftieth of a share. The new Rights are redeemable under
certain circumstances at $.01 per Right and will expire,
unless earlier redeemed, on November 3, 2007 or such
later date as may be established pursuant to the 1997
Rights Agreement.
The description and terms of the new Rights are set
forth in the 1997 Rights Agreement, a copy of which is
filed herewith and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
4 Rights Agreement, dated as of August 22,
1997, between Snap-on Incorporated and
First Chicago Trust Company of New York,
which includes as Exhibit A, the
Certificate of Designation, Exhibit B, the
Form of Rights Certificate and Exhibit C,
the Summary of Rights.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SNAP-ON INCORPORATED
(Registrant)
By:/s/ Susan F. Marrinan
_________________________
Susan F. Marrinan
General Counsel
Dated: September 8, 1997
INDEX TO EXHIBITS
Exhibit Description Page
No. No.
4 Rights Agreement, dated as of 6
August 22, 1997, between Snap-on
Incorporated and First Chicago
Trust Company of New York, which
includes as Exhibit A, the
Certificate of Designation,
Exhibit B, the Form of Rights
Certificate and Exhibit C, the
Summary of Rights.
SNAP-ON INCORPORATED
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF AUGUST 22, 1997
TABLE OF CONTENTS
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . 3
2. Appointment of Rights Agent . . . . . . . . . . . . 8
3. Issuance of Rights Certificates . . . . . . . . . . 8
4. Form of Rights Certificates . . . . . . . . . . . . 11
5. Countersignature and Registration . . . . . . . . . 12
6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . . . . 13
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . . 14
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . 17
9. Reservation and Availability of Capital Stock . . . 18
10. Preferred Stock Record Date . . . . . . . . . . . 20
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . . . 20
12. Certificate of Adjusted Purchase Price or Number
of Shares . . . . . . . . . . . . . . . . . . . . 32
13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power . . . . . . . . 33
14. Fractional Rights and Fractional Shares . . . . . 36
15. Rights of Action . . . . . . . . . . . . . . . . . 38
16. Agreement of Rights Holders . . . . . . . . . . . 38
17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . 39
18. Concerning the Rights Agent . . . . . . . . . . . 40
19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . 41
20. Duties of Rights Agent . . . . . . . . . . . . . . 41
21. Change of Rights Agent . . . . . . . . . . . . . . 44
22. Issuance of New Rights Certificates . . . . . . . 45
23. Redemption and Termination . . . . . . . . . . . . 46
24. Exchange . . . . . . . . . . . . . . . . . . . . . 48
25. Notice of Certain Events . . . . . . . . . . . . . 49
26. Notices . . . . . . . . . . . . . . . . . . . . . 50
27. Supplements and Amendments . . . . . . . . . . . . 51
28. Successors . . . . . . . . . . . . . . . . . . . . 52
29. Determinations and Action by the Board, etc. . . . . 52
30. Benefits of this Agreement . . . . . . . . . . . . . 53
31. Severability . . . . . . . . . . . . . . . . . . . . 53
32. Governing Law . . . . . . . . . . . . . . . . . . . 54
33. Counterparts . . . . . . . . . . . . . . . . . . . . 54
34. Descriptive Headings . . . . . . . . . . . . . . . . 54
EXHIBITS
Exhibit A -- Form of Certificate of Designation,
Preferences and Rights
Exhibit B -- Form of Rights Certificates
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 22, 1997
(the "Agreement"), between SNAP-ON INCORPORATED, a
Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, a New York banking corporation
(the "Rights Agent").
W I T N E S S E T H
WHEREAS, on October 23, 1987, the Board of
Directors of the Company authorized and declared a
dividend distribution of one right for each share of
Common Stock (as such term is hereinafter defined) of the
Company outstanding at the close of business on November
3, 1987 (the "1987 Record Date"), and authorized the
issuance of one right for each share of Common Stock of
the Company issued between the 1987 Record Date (whether
originally issued or delivered from the Company's
treasury) and the earlier of the Distribution Date or the
Expiration Date (as such terms are defined in the Rights
Agreement, dated as of October 23, 1987 and amended on
May 21, 1992, on January 24, 1994 and on June 28, 1996
(the "1987 Agreement")) between the Company and Harris
Trust and Savings Bank, an Illinois banking corporation,
each right initially representing the right to purchase
one one-hundredth of a share of Series A Junior Preferred
Stock of the Company having the rights, powers and
preferences set forth in the Certificate of Incorporation
of the Company, upon the terms and subject to the
conditions set forth in the 1987 Agreement (the "1987
Rights");
WHEREAS, effective as of May 21, 1992, the
Board of Directors of the Company in accordance with the
terms and conditions of the 1987 Agreement, determined it
desirable and in the best interests of the Company and
its stockholders for the Company to amend the 1987
Agreement and on such date implemented such changes by
executing an amendment to the 1987 Agreement;
WHEREAS, effective as of January 24, 1994, the
Board of Directors of the Company, in accordance with the
terms and conditions of the 1987 Agreement, determined it
desirable and in the best interests of the Company and
its stockholders for the Company to amend certain
provisions of the 1987 Agreement and on such date
implemented such changes by executing an amendment to
the 1987 Agreement;
WHEARAS, effective as of June 28, 1996, the
Board of Directors of the Company, in accordance with the
terms and conditions of the 1987 Agreement, determined it
desirable and in the best interests of the Company and
its stockholders for the Company to amend certain
provisions of the 1987 Agreement and on such date
implemented such changes by executing an amendment to
the 1987 Agreement;
WHEREAS, on August 22, 1997, the Board of
Directors of the Company determined it desirable and in
the best interests of the Company and its stockholders
for the Company to extend the benefits of the 1987
Agreement and to implement such extension by executing
this Agreement; and
WHEREAS, on August 22, 1997 (the "Rights
Dividend Declaration Date"), the Board of Directors of
the Company authorized and declared a dividend
distribution of one Right for each share of common stock,
par value $1.00 per share, of the Company (the "Common
Stock") outstanding upon the Expiration Date (as defined
in the 1987 Agreement) (the "Record Date"), and
authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of
the Company issued between the Record Date (whether
originally issued or delivered from the Company's
treasury) and the Distribution Date (as hereinafter
defined), each Right initially representing the right to
purchase one one-hundred and fiftieth of a share of
Series A Junior Preferred Stock of the Company having the
rights, powers and preferences set forth in the
Certificate of Incorporation of the Company, upon the
terms and subject to the conditions hereinafter set forth
(the "Rights").
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the
parties hereby agree as follows:
Section 1. Certain Definitions. For purposes
of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any
Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit
plan of the Company, or of any Subsidiary of the Company,
or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms
of any such plan, or (iv) any Person who becomes the
Beneficial Owner of fifteen percent (15%) or more of the
shares of Common Stock then outstanding as a result of a
reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common
Stock by the Company unless and until such Person, after
becoming aware that such Person has become the Beneficial
Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock, acquires beneficial
ownership of additional shares of Common Stock
representing one percent (1%) or more of the shares of
Common Stock then outstanding, or (v) any such Person who
has reported or is required to report such ownership (but
less than 20%) on Schedule 13G under the Securities and
Exchange Act of 1934, as amended and in effect on the
date of the Agreement (the "Exchange Act") (or any
comparable or successor report) or on Schedule 13D under
the Exchange Act (or any comparable or successor report)
which Schedule 13D does not state any intention to or
reserve the right to control or influence the management
or policies of the Company or engage in any of the
actions specified in Item 4 of such schedule (other than
the disposition of the Common Stock) and, within 10
Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such
Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the
Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional shares
of Common Stock while the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding; provided,
however, that if the Person requested to so certify fails
to do so within 10 Business Days, then such Person shall
become an Acquiring Person immediately after such 10-
Business-Day period.
(b) "Act" shall mean the Securities Act
of 1933.
(c) "Affiliate" and "Associate" shall
have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
(d) A Person shall be deemed the
"Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase
or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event (as hereinafter defined), or (C)
securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date
(as hereinafter defined) or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the
Exchange Act, (B) is not reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or
successor report) and (C) does not constitute a trust,
proxy, power of attorney or other device with the purpose
or effect of allowing two or more persons, acting in
concert, to avoid being deemed "beneficial owners" of
such security or otherwise avoid the status of "Acquiring
Person" under the terms of this Agreement or as part of a
plan or scheme to evade the reporting requirements under
Schedule 13D or Sections 13(d) or 13(g) of the Exchange
Act.
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph
(d)) or disposing of any voting securities of the
Company; provided, however, that nothing in this
paragraph (d) shall cause a Person engaged in business as
an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a
firm commitment underwriting until the expiration of
forty days after the date of such acquisition, and then
only if such securities continue to be owned by such
Person at such expiration of forty days.
(e) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which banking
institutions in the State of Illinois are authorized or
obligated by law or executive order to close.
(f) "Close of Business" on any given date
shall mean 5:00 P.M., Chicago, Illinois time, on such
date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., Chicago, Illinois
time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common
stock, par value $1.00 per share, of the Company, except
that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or
the equity securities or other equity interest having
power to control or direct the management, of such
Person.
(h) "Common Stock Equivalents" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(i) "Current Market Price" shall have the
meaning set forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the
meaning set forth in Section 3(a) hereof.
(l) "Equivalent Preferred Stock" shall
have the meaning set forth in Section 11(b) hereof.
(m) "Exchange Act" shall mean the
Securities and Exchange Act of 1934.
(n) "Exchange Ratio" shall have the
meaning set forth in Section 24 hereof.
(o) "Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(p) "Final Expiration Date" shall have
the meaning set forth in Section 7(a) hereof.
(q) "Person" shall mean any individual,
firm, corporation, partnership or other entity, or any
group of Persons acting in concert.
(r) "Preferred Stock" shall mean shares
of Series A Junior Preferred Stock, par value $1.00 per
share, of the Company, and, to the extent that there are
not a sufficient number of shares of Series A Junior
Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Preferred Stock.
(s) "Principal Party" shall have the
meaning set forth in Section 13(b) hereof.
(t) "Purchase Price" shall have the
meaning set forth in Section 4(a)(ii) hereof.
(u) "Qualified Offer" shall have the
meaning set forth in Section 11(a)(ii) hereof.
(v) "Record Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of this
Agreement.
(w) "Rights" shall have the meaning set
forth in the WHEREAS clause at the beginning of this
Agreement.
(x) "Rights Agent" shall have the meaning
set forth in the parties clause at the beginning of this
Agreement.
(y) "Rights Certificate" shall have the
meaning set forth in Section 3(a) hereof.
(aa) "Rights Dividend Declaration Date"
shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(bb) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii) hereof.
(cc) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(dd) "Spread" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ee) "Stock Acquisition Date" shall mean
the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such
other than pursuant to a Qualified Offer.
(ff) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(gg) "Substitution Period" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(hh) "Summary of Rights" shall have the
meaning set forth in Section 3(b) hereof.
(ii) "Trading Day" shall have the meaning
set forth in Section 11(d)(i) hereof.
(jj) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common
Stock)in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of
Business on the tenth Business Day after the Stock
Acquisition Date (or, if the tenth Business Day after the
Stock Acquisition Date occurs before the Record Date, the
Close of Business on the Record Date), or (ii) the Close
of Business on the tenth Business Day (or such later date
as the Board shall determine) after the date that a
tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules
and Regulations under the Exchange Act, if upon
consummation thereof, such Person would become an
Acquiring Person, in either instance other than pursuant
to a Qualified Offer (as defined herein)(the earlier of
(i) and (ii) being herein referred to as the
"Distribution Date"),(x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer
to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-
class, insured, postage-prepaid mail, to each record
holder of the Common Stock as of the Close of Business on
the Distribution Date, at the address of such holder
shown on the records of the Company, one or more right
certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) The Company will make available, as
promptly as practicable following the Record Date, a copy
of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights") to
any holder of Rights who may so request from time to time
prior to the Expiration Date. With respect to
certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for the Common Stock
and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7(a)
hereof), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in the Rights Agreement between Snap-on
Incorporated(the "Company") and the Rights
Agent thereunder (the "Rights Agreement"), the
terms of which are hereby incorporated herein
by reference and a copy of which is on file at
the principal offices of the Company. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be
evidenced by this certificate. The Company
will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on
the date of mailing, without charge, promptly
after receipt of a written request therefor.
Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights
Agreement), whether currently held by or on
behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such
certificates shall be evidenced by such certificates
alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and
the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the
forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation
and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof
to purchase such number of one one-hundred and fiftieths
of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise
price per one one-hundred and fiftieth of a share, the
"Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued
pursuant to Section 3(a), Section 11(i) or Section 22
hereof that represents Rights beneficially owned by: (i)
an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either
manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates 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 Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep, or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section
4(b), Section 7(e) and Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Certificates (other than
Rights Certificates representing Rights that may have
been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-
hundred and fiftieths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then
entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e), Section 14 hereof and Section
24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, at
any time after the Distribution Date the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part
upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number
of one one-hundred and fiftieths of a share (or other
securities, cash or other assets, as the case may be) as
to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) 5:00 P.M., Chicago,
Illinois time, on November 3, 2007, or such later date as
may be established by the Board of Directors prior to the
expiration of the Rights (such date, as it may be
extended by the Board, the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed or
exchanged as provided in Section 23 and Section 24 hereof
(the earlier of (i) and (ii) being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each one one-
hundred and fiftieth of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be
$190.00, and shall be subject to adjustment from time to
time as provided in Section 11 and Section 13(a) hereof
and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-hundred and
fiftieth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to
be purchased as set forth below and an amount equal to
any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for
the total number of one one-hundred and fiftieths of a
share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares
of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such
number of one one-hundred and fiftieths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same
to be delivered to or, upon the order of the registered
holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or
other property are available for distribution by the
Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of
a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares
of Preferred Stock would be issued.
(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, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its
failure to make 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 a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed
and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of
Capital Stock.
(a) The Company covenants and agrees that
it will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares
of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed
on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best
efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Act, with
respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and
(B) the date of the expiration of the Rights. The
Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed
ninety (90)days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file
such registration statement and permit it to become
effective. Upon any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time
as the suspension has been rescinded. In addition, if
the Company shall determine that a registration statement
is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been
declared effective. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted
under applicable law, or a registration statement shall
not have been declared effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to
ensure that all one one-hundred and fiftieths of a share
of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and
agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number
of one one-hundred and fiftieths of a share of Preferred
Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than,
or the issuance or delivery of a number of one one-
hundred and fiftieths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be)
in respect of a name other than that of the registered
holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any
certificates for a number of one one-hundred and
fiftieths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name
other than that of the registered holder upon the
exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
one-hundred and fiftieths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of
such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes)
was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of
a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company shall at any
time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior
to such date and at a time when the Preferred Stock
transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs
which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person shall, at
any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such
Person to become an Acquiring Person is a transaction set
forth in Section 13(a) hereof, or is an acquisition of
shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by at least a majority
of the members of the Board of Directors who are not
officers of the Company and who are not representatives,
nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more
investment banking firms, to be (a) at a price which is
fair to stockholders and not inadequate (taking into
account all factors which such members of the Board deem
relevant, including, without limitation, prices which
could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the
Company and its stockholders (a "Qualified Offer")
then, promptly following the occurrence of such event,
proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a
number of one one-hundred and fiftieths of a share of
Preferred Stock, such number of shares of Common Stock of
the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of one one-hundred and fiftieths of a share of
Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current
Market Price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment
Shares").
(iii) In the event that the number of
shares of Common Stock which are authorized by the
Company's Restated Certificate of Incorporation, but
which are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, are not
sufficient to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall (A) determine the
value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value"), and (B) with respect to
each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment
Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock, such as
the Preferred Stock, which the Board has deemed to have
essentially the same value or economic rights as shares
of Common Stock (such shares of preferred stock being
referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any
reduction in the Purchase Price), where such aggregate
value has been determined by the Board based upon the
advice of a nationally recognized investment banking firm
selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30)days
following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "Spread"
shall mean the excess of (i) the Current Value over (ii)
the Purchase Price. If the Board determines in good
faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30)day period
set forth above may be extended to the extent necessary,
but not more than ninety(90)days after the Section
11(a)(ii) Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such
additional shares (such thirty (30)day period, as it may
be extended, is herein called the "Substitution Period").
To the extent that action is to be taken pursuant to the
first and/or third sentences of this Section 11(a)(iii),
the Company (1) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all
outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek such shareholder
approval for such authorization of additional shares
and/or to decide the appropriate form of distribution to
be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating
that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of
each Adjustment Share shall be the current market price
per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any
Common Stock Equivalent shall be deemed to equal the
current market price per share of the Common Stock on
such date.
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible
into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on
such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock outstanding on
such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred
Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery
of consideration, part or all of which may be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed
outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such
a record date is fixed, and in the event that such rights
or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of
Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or evidences of
indebtedness, or of subscription rights or warrants
(excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date,
less the fair market value (as determined in good faith
by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a
share of Preferred Stock, and the denominator of which
shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred
Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days
immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is
determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth
above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day shall
be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system
with respect to securities listed on the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board. If
on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board shall be
used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares
of Common Stock are not listed or admitted to trading on
any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the
fair value per share as determined in good faith by the
Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause
(i) of this Section 11(d), the Current Market Price per
share of Preferred Stock shall be conclusively deemed to
be an amount equal to 150 (as such number may be
appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Preferred Stock
shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes
of this Agreement, the Current Market Price of a Unit
shall be equal to the Current Market Price of one share
of Preferred Stock divided by 150.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a) hereof,
the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-
hundred and fiftieths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of
one one-hundred and fiftieths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained
by (i) multiplying (x) the number of one one-hundred and
fiftieths of a share covered by a Right immediately prior
to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the
number of one one-hundred and fiftieths of a share of
Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number
of one one-hundred and fiftieths of a share of Preferred
Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one-ten-
thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make
a public announcement of its election to adjust the
number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section
14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or
change in the Purchase Price or the number of one one-
hundred and fiftieths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-
hundred and fiftieth of a share and the number of one
one-hundred and fiftieths of a share which were expressed
in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then stated value, if any, of the number of one one-
hundred and fiftieths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
such number of one one-hundred and fiftieths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11
shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right
exercised after such record date the number of one one-
hundred and fiftieths of a share of Preferred Stock and
other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of
one one-hundred and fiftieths of a share of Preferred
Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith
judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock
at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that
it shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets, cash flow or earning power
aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding
or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees
that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or
permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date,
shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common
Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the
total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is
made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred,
mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets, Cash Flow or Earning Power.
(a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of
related transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o)
hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision
shall be made so that: (i) each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have
the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number
of one one-hundred and fiftieths of a share of Preferred
Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number
of such one one-hundred and fiftieths of a share for
which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by (2) 50% of the
Current Market Price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the
reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:(i) in
the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger
or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or
consolidation; and (ii) in the case of any transaction
described in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the greatest
portion of the assets, cash flow or earning power transferred
pursuant to such transaction or transactions; provided, however,
that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of
two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will (i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements
of the Act) until the Expiration Date; and (ii) take such
all such other action as may be necessary to enable the
Principal Party to issue the securities purchasable upon
exercise of the Rights, including but not limited to the
registration or qualification of such securities under
all requisite securities laws of jurisdictions of the
various states and the listing of such securities on such
exchanges and trading markets as may be necessary or
appropriate; and(iii) will deliver to holders of the
Rights historical financial statements for the Principal
Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form
10 under the Exchange Act. The provisions of this
Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares
of Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock which is
a Qualified Offer as such term is defined in Section
11(a)(ii) hereof (or a wholly owned subsidiary of any
such Person or Persons), (ii) the price per share of
Common Stock offered in such transaction is not less than
the price per share of Common Stock paid to all holders
of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer and (iii)
the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional
Shares.
(a) The Company shall not be required to
issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
the Company shall pay to the registered holders of the
Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of
a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the
closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
a market in the Rights, selected by the Board of
Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to
issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundred
and fiftieth of a share of Preferred Stock) upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundred
and fiftieth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not
integral multiples of one one-hundred and fiftieth of a
share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market
value of one one-hundred and fiftieth of a share of
Preferred Stock. For purposes of this Section 14(b), the
current market value of one one-hundred and fiftieth of a
share of Preferred Stock shall be one one-hundred and
fiftieth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a
Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market
value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share
of Common Stock shall be the closing price of one share
of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares
upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder
of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in
this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the
obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of
one one-hundred and fiftieth of a share of Preferred
Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon
the holder of any Rights Certificate, as such, any of the
rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected
and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged,
by the proper Person or Persons.
Section 19. Merger or Consolidation' or Change
of Name of Rights Agent.
(a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate
trust, stock transfer or other shareholder services
business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any
paper or any further act on the part of any of the
parties hereto; but only if such corporation would be
eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person and the determination of Current Market
Price) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or
in any Rights Certificate; nor shall it be responsible
for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized
and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of
the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with
its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds
or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any 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
thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail,
and, if such resignation occurs after the Distribution
Date, to the registered holders of the Rights
Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred
Stock, by registered or certified mail, and, if such
removal occurs after the Distribution Date, to the
holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a
legal business entity organized and doing business under
the laws of the United States or of the State of
Wisconsin or of the States of Illinois or New York or of
any other state of the United States so long as such
corporation is authorized to do business as a banking
institution in the State of Wisconsin or the States of
Illinois or New York, in good standing, having a
principal office in the State of Wisconsin, which is
authorized under such laws to exercise corporate trust or
stock transfer or shareholder services powers and which
has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000.
After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and
responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred
Stock, and, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to
the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the
Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under
the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of
Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would
create a significant risk of material adverse tax
consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of
(i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record
Date, the Close of Business on the tenth Business Day
following the Record Date), or (ii) the Final Expiration
Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof(such
redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired. The Company may, at
its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as
defined in Section 11(d)(i) hereof, of the Common Stock
at the time of redemption) or any other form of
consideration deemed appropriate by the Board of
Directors.
(b) Immediately upon the action of the
Board of Directors of the Company ordering the redemption
of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of
redemption will state the method by which the payment of
the Redemption Price will be made.
(c) Notwithstanding the provisions of
Section 23(a) hereof, in the event that a majority of the
Board of Directors of the Company is elected by
stockholder action by written consent, or is comprised of
persons elected at a meeting of stockholders who were not
nominated by the Board of Directors of the Company in
office immediately prior to such meeting, then for a
period of one hundred and eighty (180) days following the
effectiveness of such election the Rights shall not be
redeemed if such redemption is reasonably likely to have
the purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence
of a Triggering Event or a transaction with an Acquiring
Person.
Section 24. Exchange.
(a) The Board of Directors of the Company
may, at its option, at any time after any Person becomes
an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to
as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors of the Company shall not be
empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Stock for
or pursuant to the terms of any such plan), together with
all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the
Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be
to receive that number of shares of Common Stock equal to
the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common
Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this
Section 24, the Company, at its option, may substitute
Preferred Stock (or Equivalent Preferred Stock, as such
term is defined in paragraph (b) of Section 11 hereof)
for Common Stock exchangeable for Rights, at the initial
rate of one one-hundred and fiftieth of a share of
Preferred Stock (or Equivalent Preferred Stock) for each
share of Common Stock, as appropriately adjusted to
reflect stock splits, stock dividends and other similar
transactions after the date hereof.
(d) In the event that there shall not be
sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with
this Section 24, the shares of Company shall take all
such acton as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the
Rights.
(e) The Company shall not be required to
issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered
holders of the Rights Certificates with regard to which
such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of
the current market value of a whole share of Common
Stock. For the purposes of this subsection (e), the
current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities,
rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect
any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or to effect
any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions,
of more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants,
or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20)
days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) In case any of the events set forth
in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing by the Rights
Agent with the Company) as follows:
Snap-on Incorporated
2801 80th Street
Kenosha, Wisconsin 53140
Attention: Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate
to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by
the Rights Agent with the Company) as follows:
First Chicago Trust Company
of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders & Exchanges Administration
Notices or demands authorized by this Agreement
to be given or made by the Company or the Rights Agent to
the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior
to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the
approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution
Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein
which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided,
this Agreement may not be supplemented or amended,
pursuant to clause (iii) of this sentence, to lengthen
(A) any time period hereunder relating to when the Rights
may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Company which states
that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Prior
to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of
the holders of Common Stock. Notwithstanding anything
herein to the contrary, this Agreement may not be amended
at a time when the Rights are not redeemable.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the
Board of Directors, etc. For all purposes of this
Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time,
including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the
administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a
determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights
and all other parties, and (y) not subject the Board, or
any of the directors on the Board to any liability to the
holders of the Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable
and the Board of Directors of the Company determines in
its good faith judgment that severing the invalid
language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of
such determination by the Board of Directors. Without
limiting the foregoing, if any provision requiring a
specific group of Directors of the Company to act is held
to by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of
Directors of the Company in accordance with applicable
law and the Company's Restated Certificate of
Incorporation and Bylaws.
Section 32. Governing Law. This Agreement,
each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of
such State applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may
be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several sections of this Agreement are
inserted for convenience only and shall not control or
affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as
of the day and year first above written.
Attest: Snap-on Incorporated
By /s/ Susan F. Marrinan By /s/ Robert A. Cornog
Name: Susan F. Marrinan Name: Robert A. Cornog
Title: Vice President, Title: Chairman, Presi-
Secretary and dent and Chief
General Counsel Executive Officer
Attest: First Chicago Trust Company
of New York
By /s/ Edward Burnett By /s/ James R. Kuzmich
Name: Edward Burnett Name: James R. Kuzmich
Title: Assistant Vice Title: Assistant Vice
President President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PREFERRED STOCK
OF
SNAP-ON TOOLS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, W. B. Rayburn, Chairman of the Board of
Directors, and J. R. Olson, Secretary, of SNAP-ON TOOLS
CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon
the Board of Directors by Article Fourth the Certificate
of Incorporation of said Corporation, and in accordance
with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, its Board of
Directors on October 23, 1987, adopted the following
resolution creating a series of its Preferred Stock, par
value $1.00 per share, designated as Series A Junior
Preferred Stock:
RESOLVED, that pursuant to the authority vested
in the Board of Directors of this Corporation in
accordance with the provisions of Article Fourth its
Certificate of Incorporation, a series of Preferred
Stock, without par value, of the Corporation be and it
hereby is created, 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 are as follows:
Section 1. Designation and Amount. The shares
of such series shall be designated as "Series A Junior
Preferred Stock" (the "Series Preferred Stock") and the
number of shares constituting such series shall be
450,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series Preferred
Stock shall be entitles 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 Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a)
$20.00, or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock of the
Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a
share of Series Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend
on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each of
those cases the multiplier set forth in clause (b) of the
preceding sentence shall be adjusted by multiplying such
multiplier 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.
The Corporation shall declare a dividend or
distribution on the Series Preferred Stock as provided in
this paragraph (A) 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
$20.00 per share on the Series Preferred Stock shall
nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
Dividends shall begin to accrue and be
cumulative on outstanding shares of Series Preferred
Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series
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
Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series
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 Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be
no more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of
shares of Series Preferred Stock shall have the following
voting rights:
(A) Subject to the provisions for adjustment
hereinafter set forth, each share of Series Preferred
Stock shall entitle the holder thereof to 100 votes on
all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock
payable in shares of Common Stock; or effect a
subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which
holders of shares of Series Preferred Stock were entitled
immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by
law, the holders of shares of Series Preferred Stock and
the holders of shares of Common Stock shall vote together
as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (If at any time dividends on any Series
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") which shall extend until such
time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series
Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default
period, the holders of Preferred Stock, voting as a
class, irrespective of series, shall have the right to
elect two Directors, which Directors shall be in addition
to the then otherwise authorized number of Directors.
(During any default period, such voting right
of the holders of Series 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, provided that such voting right
shall not be exercised unless the holders of 25% in
number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting
right. After the holders of the Preferred Stock shall
have exercised their right to elect Directors in any
default period and during the continuance of such period,
the number of Directors shall not be increased of
decreased except by vote of the holders of Preferred
Stock as herein provided.
(Unless the holders of Preferred Stock shall,
during an existing default period, have previously
exercised their right to elect Directors, the Board of
Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the Chairman of the
Board, the President, a Vice-President or the Secretary
of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him 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 20 days and not later than 60 days after
such order or request or in default of the calling of
such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not
less than 10% of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of
this paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of
the stockholders.
(In any default period the holders of Common
Stock, and other classes of stock of the Corporation, if
applicable, shall continue to be entitled to elect the
whole number of Directors then otherwise authorized.
(The Directors elected by the holders of
Preferred Stock shall continue in office until the next
annual meeting of stockholders and until their successors
shall have been elected by such holders or until the
expiration of the default period. 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 of stock which elected the Director
whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of
a particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided
in the foregoing sentence.
(Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock
as a class to elect Directors shall cease, (y) the term
of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may then be authorized
by the Board of Directors.
(D) Except as set forth herein, holders of
Series 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
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 Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series
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 Preferred
Stock, except dividends paid ratably on the Series
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 on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series
Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series Preferred Stock, or
any shares of stock ranking on a parity with the Series
Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may
be reissued as part of a new series of Preferred Stock to
be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding
Up. Upon any voluntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be
made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series Preferred Stock unless,
prior thereto, the holders of shares of Series Preferred
Stock shall have received $125.00 per share, plus an
amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares
of Series Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times
the aggregate amount to be distributed per share to
holders of Common Stock, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series
Preferred Stock, except distributions made ratably on the
Series 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. In the event the Corporation
shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series Preferred
Stock were entitled immediately prior to such event under
the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In
case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or other property,
then in any such case the shares of Series Preferred
Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times
the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall
at any time declare or pay any dividend on Common Stock
payable in share of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares
of Series Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of
Series Preferred Stock shall not be redeemable.
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
Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, we have executed and
subscribed this Certificate and do affirm the foregoing
as true under the penalties of perjury this 23rd day of
October, 1987.
W. B. Rayburn,
Chairman of the Board
of Directors
J. R. Olson,
Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER November 3, 2007 UNLESS
EXTENDED PRIOR THERETO BY THE BOARD OF
DIRECTORS OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
Rights Certificate
SNAP-ON INCORPORATED
This certifies that , or
registered assigns, is the registered owner of the number
of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of August 3,
1997 (the "Rights Agreement"), between Snap-on
Incorporated, a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York, a New York
banking corporation (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (Chicago,
Illinois time) on November 3, 2007 (unless such date is
extended prior thereto by the Board of Directors) at the
office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-
hundred and fiftieth of a fully paid, non-assessable
share of Series A Junior Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $190.00
per one one-hundred and fiftieth of a share (the
"Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed.
The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number
and Purchase Price as of August 22, 1997, based on the
Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement),
if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares of
Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and
adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include
the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent
and are also available upon written request to the Rights
Agent.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of one one-hundred and fiftieths of a share of
Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may
be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier
of the Close of Business on (i) the tenth Business Day
following the Stock Acquisition Date (as such time period
may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. The foregoing
notwithstanding, the Rights generally may not be redeemed
for one hundred eighty (180) days following a change in a
majority of the Board as a result of a proxy contest. In
addition, under certain circumstances following the Stock
Acquisition Date, the Rights may be exchanged, in whole
or in part, for shares of the Common Stock, or shares of
preferred stock of the Company at an exchange ratio of
one share of Common Stock per Right. Immediately upon
the action of the Board of Directors of the Company
authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which
are not subject to such exchange) will terminate and the
Rights will only enable holders to receive the shares
issuable upon such exchange. Notwithstanding the
foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Person
together with all Affiliates and Associates, becomes the
Beneficial Owner of 50% or more of the Common Stock then
outstanding.
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples
of one one-hundred and fiftieth of a share of Preferred
Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be
entitled to vote or receive dividends or be deemed for
any purpose the holder of shares of Preferred Stock or of
any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to
give consent to or withhold consent from any corporate
action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of _________ __, ____
ATTEST: SNAP-ON INCORPORATED
By
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
Authorized Signature
[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
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint __________________ Attorney, to
transfer the within Rights Certificate on the books of
the within named Company, with full power of
substitution.
Dated: __________________, _____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _______________, _____
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon
the face of this Rights Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: SNAP-ON INCORPORATED:
The undersigned hereby irrevocably elects to
exercise __________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________, _____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on
behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: ______________, _____
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any
change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On August 22, 1997, the Board of Directors of
Snap-On Incorporated (the "Company") declared a dividend
distribution of one Right for each outstanding share of
Company Common Stock to stockholders of record at the close
of business on November 3, 1997 (the "Record Date"). The
Rights Agreement (hereinafter defined) also contemplates the
issuance of one Right for each share of Common Stock which
is issued between the Record Date and the Distribution Date.
Each Right entitles the registered holder to purchase from
the Company a unit consisting of one one-hundred and
fiftieth of a share (a "Unit") of Series A Junior Preferred
Stock, par value $1.00 per share (the "Series A Preferred
Stock") at a Purchase Price of $190.00 per Unit, subject to
anti-dilutive adjustments. 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.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will be represented by the
Common Stock certificates and will not be exercisable or
transferable apart from the Common Stock until the earlier
to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date"), other
than as a result of repurchases of stock by the Company or
certain inadvertent actions by institutional or certain
other stockholders or (ii) 10 business days (or such later
date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would
result in a person or group becoming an Acquiring Person
(the earlier of such dates being called the "Distribution
Date"). Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender
for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate. Pursuant to the Rights Agreement, the Company
reserves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise
of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the
Distribution Date and will expire at 5:00 P.M. (Chicago,
Illinois time) on November 3, 2007, unless such date is
extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will
be issued with Rights.
In the event that a Person becomes an Acquiring
Person, except pursuant to an offer for all outstanding
shares of Common Stock determined by at least a majority of
the independent directors to be at a price which is fair
and not inadequate and to otherwise be in the best interests
of the Company and its stockholders, after receiving advice
from one or more investment banking firms (a "Qualified
Offer"), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of
the Company) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as
the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $[A] per
Right, each Right not owned by an Acquiring Person (or by
certain related parties) following an event set forth in the
preceding paragraph would entitle its holder to purchase
$[2A] worth of Common Stock (or other consideration, as
noted above) for $[A]. Assuming that the Common Stock had a
per share value of $[current market] at such time, the
holder of each valid Right would be entitled to purchase
shares of Common Stock for $[A].
In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or
other business combination transaction in which the Company
is not the surviving corporation (other than with an entity
which acquired the shares pursuant to a Qualified Offer),
(ii) the Company engages in a merger or other business
combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is
changed or exchanged, or (iii) 50% or more of the Company's
assets, cash flow or earning power is sold or transferred,
each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the
exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person or group
of fifty percent (50%) or more of the outstanding Common
Stock, the Board may exchange the Rights (other than Rights
owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of
Common Stock, or one one-hundred and fiftieth of a share of
Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to
adjustment).
At any time prior to the earlier of (i) the Close
of Business on the tenth business day following the Stock
Acquisition Date, (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of
Business on the tenth Business Day following the Record
Date), or (ii) Final Expiration Date, the Board of Directors
may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board
of Directors). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the $.01 redemption price. The foregoing
notwithstanding, in the event that a majority of the Board
of Directors of the Company is elected by Stockholder action
by written consent, or is comprised of persons elected at a
meeting of stockholders who were not nominated by the Board
of Directors in office immediately prior to such meeting,
then the Rights shall not be redeemed if such redemption is
reasonably likely to have the purpose or effect of allowing
any person to become an Acquiring Person or otherwise
facilitating the occurrence of Triggering Event or a
transaction with an Acquiring Person, for a period of one
hundred eighty (180) days following the effectiveness of
such election.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in
the event of the redemption of the Rights as set forth
above.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights,
or to shorten or lengthen any time period under the Rights
Agreement with a few exceptions. The foregoing
notwithstanding, no amendment may be made at such time as
the Rights are not redeemable.
A copy of the Rights Agreement is being filed
with the Securities and Exchange Commission as an Exhibit to
a Registration Statement on Form 8-A/Current Report on Form
8-K dated , 199 . A copy of the Rights Agreement
is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to
the Rights Agreement, which is incorporated herein by
reference.