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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Olympic Steel, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Ohio 34-1245650
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(State of Incorporation or Organization) (I.R.S. Employer
Identification No.)
5096 Richmond Road, Cleveland, Heights, Ohio 44146-1392
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(Address of Principal Executive Officer) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of debt registration of a class of debt
securities and is effective upon filing securities and is to become effective
pursuant to General simultaneously with the
Instruction A(c)(1) please check effectiveness of a concurrent
the following box. [ ] registration statement under the
Securities Act of 1933 pursuant to
General Instruction A(c)(2) please
check the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None
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Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Preferred Shares
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Series A Junior Participating Preferred Stock
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(Title of Class)
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FORM 8-A
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Item 1. Description of Registrant's Securities to be Registered.
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On January 31, 2000, the Directors of Olympic Steel, Inc., an Ohio
corporation (the "Company"), declared a dividend distribution of one right (a
"Right") for each share of common stock, without par value ("Common Shares"), of
the Company outstanding as of March 6, 2000 (the "Record Date"). The dividend
was declared pursuant to the terms of a Rights Agreements (the "Rights
Agreement") by and between the Company and National City Bank, as Rights Agent.
The Rights Agreement also provides, subject to specified exceptions and
limitations, that Common Shares issued or delivered from the Company's treasury
after the Record Date will be entitled to and accompanied by a Right. The Rights
are in all respects subject to and governed by the provisions of the Rights
Agreement, a copy of which (including all Exhibits thereto) is filed as Exhibit
4.1 hereto and incorporated herein by reference. A summary description of the
Rights is set forth in Exhibit C to the Rights Agreement.
Item 2. Exhibits.
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Exhibit No. Description
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4.1 Rights Agreement (including a Form of Certificate of Adoption of
Amended Articles of Incorporation as Exhibit A thereto, a Form of Right
Certificate as Exhibit B thereto and a Summary of Rights to Purchase
Preferred stock as Exhibit C thereto).
99.1 Form of letter to shareholders, dated February 15, 2000.
99.2 Press release, dated February 3, 2000.
SIGNATURE
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Olympic Steel, Inc.
February 15, 2000
By: /s/ Michael D. Siegal
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Name: Michael D. Siegal
Title: Chairman and Chief Executive Officer
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FORM 8-K CURRENT REPORT
Exhibit Index
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Exhibit No. Description
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4.1 Rights Agreement (including a Form of Certificate of Adoption
of Amendment to Amended Articles of Incorporation as Exhibit A
thereto, a Form of Right Certificate as Exhibit B thereto and
a Summary of Rights to Purchase Preferred Stock as Exhibit C
thereto).
99.1 Form of letter to shareholders, dated February 15, 2000
99.2 Press Release, dated February 3, 2000
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Exhibit 4.1
RIGHTS AGREEMENT
Dated as of January 31, 2000
By and Between
OLYMPIC STEEL, INC.
and
NATIONAL CITY BANK
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Recitals..........................................................................................1
1. Certain Definitions .........................................................................2
2. Appointment of Rights Agent..................................................................8
3. Issue of Right Certificates..................................................................9
4. Form of Right Certificates..................................................................12
5. Countersignature And Registration...........................................................12
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates .........................................................................13
7. Exercise of Rights; Purchase Price; Expiration Date of Rights...............................15
8. Cancellation and Destruction of Right Certificates..........................................17
9. Company Covenants Concerning Securities and Rights..........................................18
10. Record Date.................................................................................21
11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights............................................................................22
12. Certificate of Adjusted Purchase Price or Number of Securities..............................39
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power........................39
14. Fractional Rights and Fractional Securities.................................................44
15. Rights of Action............................................................................48
16. Agreement of Rights Holders.................................................................48
17. Right Certificate Holder Not Deemed a Shareholder...........................................50
18. Concerning the Rights Agent.................................................................50
19. Merger or Consolidation or Change of Name of Rights Agent...................................51
</TABLE>
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<TABLE>
<S> <C> <C>
20. Dates of Rights Agent.......................................................................52
21. Change of Rights Agent......................................................................56
22. Issuance of New Right Certificates..........................................................58
23. Redemption..................................................................................59
24. Exchange....................................................................................60
25. Notice of Certain Events....................................................................62
26. Notices.....................................................................................63
27. Supplements and Amendments..................................................................65
28. Successors, Certain Covenants...............................................................66
29. Benefits Of This Agreement..................................................................66
30. Governing Law...............................................................................67
31. Severability................................................................................67
32. Descriptive Headings, etc...................................................................67
33. Determinations and Actions by the Directors.................................................68
34. Counterparts................................................................................68
</TABLE>
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RIGHTS AGREEMENT
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This RIGHTS AGREEMENT, dated as of January 31, 2000 (this "Agreement"),
is made and entered into by and between Olympic Steel, Inc., an Ohio corporation
(the "Company"), and National City Bank, as rights agent (the "Rights Agent").
RECITALS
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WHEREAS, on January 31, 2000, pursuant to the authority provided in
Section 1701.16 of the Ohio Revised Code, the Directors of the Company
authorized and declared a dividend distribution of one right (the "Rights") for
each common share, without par value, of the Company (the "Common Shares")
outstanding as of the Close of Business (as hereinafter defined) on March 6,
2000 (the "Record Date"), each Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined) or as provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
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1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person (other than the
Company or any Related Person or any Exempted Person) who or which, together
with all Affiliates and Associates of such Person, is the Beneficial Owner of
15% or more of the then-outstanding Common Shares; PROVIDED, HOWEVER, that a
Person will not be deemed to have become an Acquiring Person solely as a result
of a reduction in the number of Common Shares outstanding unless and until such
time as (i) such Person or any Affiliate or Associate of such Person thereafter
becomes the Beneficial Owner of additional Common Shares representing 1% or more
of the then-outstanding Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally, or (ii) any other Person who
is the Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person. Notwithstanding the foregoing, if the Directors of the Company
determine in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person" as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
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(b) "AFFILIATE" and "ASSOCIATE" will have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement,
PROVIDED HOWEVER, that a Person will not be deemed to be the Affiliate or
Associate of another Person solely because either or both Persons are or were
Directors of the Company.
(c) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:
(i) the beneficial ownership of 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, warrants, options or other
rights in each case, other than upon exercise or exchange of
the rights); PROVIDED, HOWEVER, that a Person will not be
deemed the Beneficial Owner of, or to Beneficially Own,
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has or
shares the right to vote or dispose of, including pursuant to
any agreement, arrangement or understanding (whether or not in
writing); or
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(iii) of which any other Person is the Beneficial
Owner, if such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any of
such other Person's Affiliates or Associates) with respect to
acquiring, holding, voting or disposing of any securities of
the Company; PROVIDED, HOWEVER, that a Person will not be
deemed the Beneficial Owner of, or to Beneficially Own, any
security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or
understanding (whether or not in writing) which (1) arises
solely from a revocable proxy given to such Person in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing
agency," as defined in Section 3(a)(23) of the Exchange Act;
PROVIDED FURTHER, HOWEVER, that nothing in this paragraph (c)
will 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 an underwriting syndicate until
the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Directors of the
Company may determine in any specific case.
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(d) "BUSINESS DAY" means any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Ohio or New York (or such
other state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date means 5:00 P.M.,
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it means 5:00 P.M., Eastern time, on the next succeeding Business
Day.
(f) "COMMON SHARES" has the meaning set forth in the Recitals
to this Agreement; PROVIDED, HOWEVER, that, if the Company is the continuing or
surviving corporation in a transaction described in Section 13(a)(ii), "Common
Shares" when used with reference to the Company means shares of the capital
stock or units of the equity interests with the greatest aggregate voting power
of the Company. "Common Shares" when used with reference to any corporation or
other legal entity other than the Company, including an Issuer, means shares of
the capital stock or units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity.
(g) "COMPANY" means Olympic Steel, Inc., an Ohio corporation.
(h) "DISTRIBUTION DATE" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share Acquisition Date, or (ii)
the Close of Business on the tenth Business Day (or, unless the Distribution
Date shall have previously occurred, such later date as may be specified by the
Directors of the Company) after the commencement of a tender or exchange offer
by any Person (other
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than the Company or any Related Person), if upon the consummation thereof such
Person would be the Beneficial Owner of 15% or more of the then-outstanding
Common Shares.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(j) "EXEMPTED PERSON" means Michael D. Siegal, Chairman and
Chief Executive Officer of the Company.
(k) "EXPIRATION DATE" means the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 24.
(l) "FINAL EXPIRATION DATE" means the tenth anniversary of the
Record Date.
(m) "FLIP-IN EVENT" means any event described in clauses (A),
(B) or (C) of Section 11(a)(ii).
(n) "FLIP-OVER EVENT" means any event described in clauses
(i), (ii) or (iii) of Section 13(a).
(o) "ISSUER" has the meaning set forth in Section 13(b).
(p) "NASDAQ" means The Nasdaq Stock Market.
(q) "PERSON" means any individual, firm, corporation or other
legal entity, and includes any successor (by merger or otherwise) of such
entity.
(r) "PREFERRED SHARES" means shares of Series A Junior
Participating Preferred Stock, without par value, of the Company having the
rights and
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preferences set forth in the form of Certificate of Adoption of Amendment to
Amended Articles of Incorporation attached as EXHIBIT A.
(s) "PURCHASE PRICE" means initially $20.00 per one
one-hundredth of a Preferred Share, subject to adjustment from time to time as
provided in this Agreement.
(t) "RECORD DATE" has the meaning set forth in the Recitals to
this Agreement.
(u) "REDEMPTION PRICE" means $.01 per Right, subject to
adjustment by resolution of the Directors of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the Record Date.
(v) "RELATED PERSON" means (i) any Subsidiary of the Company
or (ii) any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan.
(w) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.
(x) "RIGHT CERTIFICATES" means the certificate evidencing the
Rights, substantially in the form attached as Exhibit B.
(y) "RIGHTS AGENT" means National City Bank, unless and until
a successor Rights Agent has become such pursuant to the terms of this
Agreement, and thereafter, "Rights Agent" means such successor Rights Agent.
(z) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
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(aa) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.
(bb) "SUBSIDIARY" when used with reference to any Person means
any corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; PROVIDED, HOWEVER, that for purposes of Section
13(b), "Subsidiary" when used with reference to any Person means any corporation
or other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.
(cc)"TRADING DAY" means any day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day.
(dd)"TRIGGERING EVENT" means any Flip-in Event or Flip-over
Event.
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, will also be, prior to the Distribution Date, the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and hereby
certifies that it complies with the requirements of the NASDAQ governing
transfer agents and registrars. The Company may from time to time act as
Co-Rights Agent or appoint such Co-Rights Agents as it
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may deem necessary or desirable. Any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent. To the extent that any Co-Rights Agent takes any action pursuant to this
Agreement, such Co-Rights Agent will be entitled to all of the rights and
protections of, and subject to all of the applicable duties and obligations
imposed upon, the Rights Agent pursuant to the terms of this Agreement.
3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be
evidenced by the certificates representing Common Shares registered in the names
of the record holders thereof (which certificates representing Common Shares
will also be deemed to be Right Certificates), (ii) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares, and (iii) the surrender for transfer of any certificates evidencing
Common Shares in respect of which Rights have been issued will also constitute
the transfer of the Rights associated with the Common Shares evidenced by such
certificates. On or as promptly as practicable after the Record Date, the
Company will send by first class, postage prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company as of such date, a copy of a
Summary of Rights to Purchase Preferred Stock in substantially the form attached
as EXHIBIT C.
(b) Rights will be issued by the Company in respect of
all Common Shares (other than Common Shares issued upon the exercise or exchange
of any Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date
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and the Expiration Date. Certificates evidencing such Common Shares will have
stamped on, impressed on, printed on, written on, or otherwise affixed to them
the following legend or such similar legend as the Company may deem appropriate
and as is 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 or
transaction reporting system on which the Common Shares may from time to time be
listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Olympic Steel, Inc. and National City Bank, as Rights Agent,
dated as of January 31, 2000 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of Olympic Steel, Inc. The Rights are not exercisable prior to
the occurrence of certain events specified in the Rights
Agreement. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may be
exchanged, may expire, may be amended, or may be evidenced by
separate certificates and no longer be evidenced by this
Certificate. Olympic Steel, Inc. 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 as
set forth in the Rights Agreement, Rights that are or were
beneficially owned by an Acquiring Person or any Affiliate or
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement) may become null and void.
(c) Any Right Certificate issued pursuant to this Section
3 that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate and
any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall be subject to and contain the following
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legend or such similar legend as the Company may deem appropriate and as is 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:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may become null
and void in the circumstances specified in Section 11(a)(ii)
or Section 13 of the Rights Agreement.
(d) As promptly as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send, at the expense of the Company), by first class, insured,
postage prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(e) In the event that the Company purchases or otherwise
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares will be deemed canceled and
retired so that the Company will not be entitled to exercise any Rights
associated with the Common Shares so purchased or acquired.
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4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the reverse
thereof) will be substantially in the form attached as EXHIBIT B with such
changes and 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 or transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 22, the Right
Certificates, whenever issued, on their face will entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as are set forth
therein at the Purchase Price set forth therein, but the Purchase Price, the
number and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding will be subject to adjustment as provided herein.
5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates will be executed on behalf of the
Company by its Chairman, its President or any Vice President, either manually or
by facsimile signature, and will have affixed thereto the Company's seal or a
facsimile thereof which will be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent and will not be
valid for any purpose unless so countersigned. In case any officer of the
Company who signed any of the Right Certificates ceases to be such officer of
the Company before countersignature by the
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Rights Agent and issuance and delivery by the Company, such Right 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 Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, is a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at the principal office of the Rights Agent
designated for such purpose and at such other offices 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 or any transaction
reporting system on which the Rights may from time to time be listed or quoted,
books for registration and transfer of the Right Certificates issued hereunder.
Such books will show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a) Subject to the
provisions of Sections 7(d) and 14, at any time after the Close of Business on
the Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates representing exercisable Rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling
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the registered holder to purchase a like number of one one-hundredths of a
Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any such Right Certificate
or Rights Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office 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 Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right 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 or as promptly as practicable thereafter, subject
to the provisions of Sections 7(d) and 14, the Company will prepare, execute and
deliver to the Rights Agent, and the Rights Agent will countersign and deliver,
a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate and, in case of loss, theft or destruction, of
indemnity or security reasonably
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satisfactory to them, and, if requested by the Company, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will prepare, execute and deliver a new Right Certificate
of like tenor to the Rights Agent and the Rights Agent will countersign and
deliver such new Right Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the exercise price
for the total number of securities as to which such surrendered Rights are
exercised and (ii) an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with the provisions
of Section 9(d).
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly executed,
accompanied by payment as described above, the Rights Agent will promptly (i)
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates representing the number
of one one-hundredths of a Preferred Share to be
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purchased (and the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), or, if the Company elects to
deposit Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (and the Company hereby irrevocably authorizes and directs such
depositary agent to comply with all such requests), (ii) after receipt of such
certificates (or depositary receipts, as the case may be), cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, (iii) when appropriate, requisition from the Company or any transfer
agent therefor (or make available, if the Rights Agent is the transfer agent)
certificates representing the number of Common Shares to be issued in accordance
with the provisions of Section 11(a)(ii) or the number of equivalent common
shares to be issued in lieu of the issuance of Common Shares in accordance with
the provisions of Section 11(a)(iii), (iv) when appropriate, after receipt of
such certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (v) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 or in lieu of the
issuance of Common Shares in accordance with the provisions of Section
11(a)(iii), (vi) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate, and (vii) when
appropriate, deliver any due bill or other instrument provided to the Rights
Agent by the
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<PAGE> 20
Company for delivery to the registered holder of such Right Certificate as
provided by Section 11(l).
(c) In case the registered holder of any Right
Certificate exercises less than all the Rights evidenced thereby, the Company
will prepare, execute and deliver a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised and the Rights Agent will
countersign and deliver such new Right Certificate to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be obligated to
undertake any action with respect to any purported transfer, split up,
combination or exchange of any Right Certificate pursuant to Section 6 or
exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Right Certificate has (i) completed and signed the
certificate following the form of assignment or the form of election to
purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or 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
may reasonably request.
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, will be canceled by it,
and no Right Certificates will
17
<PAGE> 21
be issued in lieu thereof except as expressly permitted by the provisions of
this Agreement. The Company will deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent will so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent will deliver all canceled Right Certificates
to the Company, or will, at the written request of the Company, destroy such
canceled Right Certificates, and in such case will deliver a certificate of
destruction thereof to the Company.
9. COMPANY COVENANTS CONCERNING SECURITIES AND RIGHTS. The Company
covenants and agrees that:
(a) It will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, a number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
issuable upon the exercise of the Rights may be listed on a national securities
exchange, or quoted on Nasdaq, it will endeavor to cause, from and after such
time as the Rights become exercisable, all securities reserved for issuance upon
the exercise of Rights to be listed on such exchange, or quoted on Nasdaq, upon
official notice of issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) delivered upon exercise of Rights, at the
time of delivery of the
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<PAGE> 22
certificates for such securities, will be (subject to payment of the Purchase
Price) duly authorized, validly issued, fully paid and nonassessable securities.
(d) It will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; PROVIDED, HOWEVER, that the
Company will not be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depositary receipts
representing securities issued upon the exercise of Rights in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates or depositary
receipts representing securities issued upon the exercise of any Rights until
any such tax or charge has been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
(e) It will use its best efforts (i) to file on an
appropriate form, as soon as practicable following the later of the Share
Acquisition Date and the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. The Company
will also take
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<PAGE> 23
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 after the date set forth in clause (i) of the first sentence of this
Section 9(e), the exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective. Upon any such
suspension, the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company determines that a registration statement should be filed under
the Securities Act or any state securities laws following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights in each
relevant jurisdiction until such time as a registration statement has been
declared effective and, upon any such suspension, the Company will 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. Notwithstanding anything in this Agreement to
the contrary, the Rights will not be exercisable in any jurisdiction if the
requisite registration or qualification in such jurisdiction has not been
effected or the exercise of the Rights is not permitted under applicable law.
(f) Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the Distribution
Date it will not 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
eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.
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<PAGE> 24
(g) In the event that the Company is obligated to issue
other securities of the Company and/or pay cash pursuant to Section 11, 13, 14
or 24 it will make all arrangements necessary so that such other securities
and/or cash are available for distribution by the Rights Agent, if and when
appropriate.
10. RECORD DATE. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case may be)
is issued upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right 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 transfer books of the Company for
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) are closed, such Person will be deemed to have become the record holder of
such securities on, and such certificate will be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any security for
which the Rights are or may become exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
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<PAGE> 25
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SECURITIES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities issuable
upon exercise of 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 that the Company at any time
after the Record Date (A) declares a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivides the outstanding Preferred
Shares, (C) combines the outstanding Preferred Shares into a smaller
number of Preferred Shares, or (D) issues any shares of its capital
stock in a reclassification of the Preferred Shares (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), 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/or the number and/or kind of shares of capital stock issuable on
such date upon exercise of a Right, will be proportionately adjusted
so that the holder of any Right exercised after such time is entitled
to receive upon payment of the Purchase Price then in effect the
aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company for the Preferred Shares were
open, the holder of such Right would have owned upon such exercise
(and, in the case of a reclassification, would have retained after
giving effect to such reclassification) and would have been entitled
to receive by virtue of such dividend, subdivision,
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<PAGE> 26
combination or reclassification; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section
11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person;
or
(B) any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, directly or indirectly, (1)
merges into the Company or otherwise combines with the Company
and the Company is the continuing or surviving corporation of
such merger or combination (other than in a transaction
subject to Section 13), (2) merges or otherwise combines with
any Subsidiary of the Company, (3) in one or more transactions
(otherwise than in connection with the exercise, exchange or
conversion of securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries) transfers cash, securities
or any other property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of
any class of capital stock of the Company or any of its
Subsidiaries or for securities exercisable or exchangeable for
or convertible into shares of any class of capital stock of
the Company or any
23
<PAGE> 27
of its Subsidiaries, or otherwise obtains from the Company or
any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company
or any of its Subsidiaries or securities exercisable or
exchangeable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries
(otherwise than as part of a pro rata distribution to all
holders of shares of any class of capital stock of the
Company, or any of its Subsidiaries), (4) sells, purchases,
leases, exchanges, mortgages, pledges, transfers or otherwise
disposes (in one or more transactions) to, from, with or of,
as the case may be, the Company or any of its Subsidiaries
(otherwise than in a transaction subject to Section 13), any
property, including securities, on terms and conditions less
favorable to the Company than the Company would be able to
obtain in an arm's-length transaction with an unaffiliated
third party, (5) receives any compensation from the Company or
any of its Subsidiaries other than compensation as a director
or a regular full-time employee, in either case at rates
consistent with the Company's (or its Subsidiaries') past
practices, or (6) receives the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by the Company
or any of its Subsidiaries; or
(C) during such time as there is an
Acquiring Person, there is any reclassification of securities
of the Company (including any
24
<PAGE> 28
reverse stock split), or any recapitalization of the Company,
or any merger or consolidation of the Company with any of its
Subsidiaries, or any other transaction or series of
transactions involving the Company or any of its Subsidiaries
(whether or not with or into or otherwise involving an
Acquiring Person), other than a transaction subject to Section
13, which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities of the
Company or any of its Subsidiaries, or of securities
exercisable or exchangeable for or convertible into equity
securities of the Company or any of its Subsidiaries, of which
an Acquiring Person, or any Affiliate or Associate of any
Acquiring Person, is the Beneficial Owner; then, and in each
such case, from and after the latest of the Distribution Date,
the Share Acquisition Date and the date of the occurrence of
such Flip-in Event, proper provision will be made so that each
holder of a Right, except as provided below, will thereafter
have the right to receive, upon exercise thereof in accordance
with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to
the date of the occurrence of such Flip-in Event (or, if any
other Flip-in Event shall have previously occurred, the
product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the
first
25
<PAGE> 29
occurrence of a Flip-in Event), in lieu of Preferred Shares,
such number of Common Shares as equals the result obtained by
(x) multiplying the then-current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right
was exercisable immediately prior to the date of the
occurrence of such Flip-in Event (or, if any other Flip-in
Event shall have previously occurred, multiplying the
then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the first
occurrence of a Flip-in Event), and dividing that product by
(y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(d)) on the date of
the occurrence of such Flip-in Event. Notwithstanding anything
in this Agreement to the contrary, from and after the first
occurrence of a Flip-in Event, any Rights that are
Beneficially Owned by (A) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (B) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the occurrence of a
Flip-in Event, or (C) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who became a transferee prior
to or concurrently with the occurrence of a Flip-in Event
pursuant to either (1) a transfer from an Acquiring Person to
holders of its equity securities or to any Person with whom it
has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (2) a transfer which the
Directors of the Company have determined is part of a plan,
26
<PAGE> 30
arrangement or understanding which has the purpose or effect
of avoiding the provisions of this Section 11(a)(ii), and
subsequent transferees of any of such Persons, will be void
without any further action and any holder of such Rights will
thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company will
use all reasonable efforts to ensure that the provisions of
this Section 11(a)(ii) are complied with, but will have no
liability to any holder of Right 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. Upon the occurrence of a
Flip-in Event, no Right Certificate that represents Rights
that are or have become void pursuant to the provisions of
this Section 11(a)(ii) will thereafter be issued pursuant to
Section 3 or Section 6, and any Right Certificate delivered to
the Rights Agent that represents Rights that are or have
become void pursuant to the provisions of this Section
11(a)(ii) will be canceled. Upon the occurrence of a Flip-over
Event, any Rights that shall not have been previously
exercised pursuant to this Section 11(a)(ii) shall thereafter
be exercisable only pursuant to Section 13 and not pursuant to
this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if
there are not sufficient Common Shares authorized but unissued
or issued but not outstanding to permit the issuance of all
the Common Shares issuable in accordance with Section
11(a)(ii) upon the exercise of a Right, the
27
<PAGE> 31
Directors of the Company will use their best efforts promptly
to authorize and, subject to the provisions of Section 9(e),
make available for issuance additional Common Shares or other
equity securities of the Company having equivalent voting
rights and an equivalent value (as determined in good faith by
the Directors of the Company) to the Common Shares, as the
case may be (for purposes of this Section 11(a)(iii),
"equivalent common shares"). In the event that equivalent
common shares are so authorized, upon the exercise of a Right
in accordance with the provisions of Section 7, the registered
holder will be entitled to receive (A) Common Shares, to the
extent any are available, and (B) a number of equivalent
common shares, which the Directors of the Company have
determined in good faith to have a value equivalent to the
excess of (x) the aggregate current per share market value on
the date of the occurrence of the most recent Flip-in Event of
all the Common Shares, issuable in accordance with Section
11(a)(ii) upon the exercise of a Right (the "Exercise Value")
over (y) the aggregate current per share market value on the
date of the occurrence of the most recent Flip-in Event of any
Common Shares, available for issuance upon the exercise of
such Right; PROVIDED, HOWEVER, that if at any time after 90
calendar days after the latest of the Share Acquisition Date,
the Distribution Date and the date of the occurrence of the
most recent Flip-in Event, there are not sufficient Common
Shares, and/or equivalent common shares available for issuance
upon the exercise of a Right, then the Company will be
obligated to deliver, upon the
28
<PAGE> 32
surrender of such Right and without requiring payment of the
Purchase Price, Common Shares, as the case may be (to the
extent available), equivalent common shares (to the extent
available) and then cash (to the extent permitted by
applicable law and any agreements or instruments to which the
Company is a party in effect immediately prior to the Share
Acquisition Date), which securities and cash have an aggregate
value equal to the excess of (1) the Exercise Value over (2)
the product of the then-current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the date of
the occurrence of the most recent Flip-in Event (or, if any
other Flip-in Event shall have previously occurred, the
product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right would have been exercisable immediately prior to the
date of the occurrence of such Flip-in Event if no other
Flip-in Event had previously occurred). To the extent that any
legal or contractual restrictions prevent the Company from
paying the full amount of cash payable in accordance with the
foregoing sentence, the Company will pay to holders of the
Rights as to which such payments are being made all amounts
which are not then restricted on a pro rata basis and will
continue to make payments on a pro rata basis as promptly as
funds become available until the full amount due to each such
Rights holder has been paid.
29
<PAGE> 33
(b) In the event that the Company fixes a record date for
the issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current per share market price of the Preferred Shares
(determined pursuant to Section 11(d)) on such record date, the Purchase Price
to be in effect after such record date will be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which is the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which is the number of Preferred
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which is in a
30
<PAGE> 34
form other than cash, the value of such consideration will be as determined in
good faith by the Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. Preferred Shares owned by
or held for the account of the Company will not be deemed outstanding for the
purpose of any such computation. Such adjustment will be made successively
whenever such a record date is fixed, and in the event that such rights, options
or warrants are not so issued, the Purchase Price will be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In the event that the Company fixes a record date for
the making of a distribution to all holders of Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on such record date
or, if earlier, the date on which Preferred Shares begin to trade on an
ex-dividend or when issued basis for such distribution, less the fair market
value (as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent) of
the portion of the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants applicable to
one Preferred
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<PAGE> 35
Share, and the denominator of which is such current per share market price of
the Preferred Shares; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. Such adjustments will be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any date will be deemed to
be the average of the daily closing prices per share of such Common Shares for
the 30 consecutive Trading Days immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the current per share market price of the Common
Shares is determined during a period following the announcement by the issuer of
such Common Shares of (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares
(other than the Rights) or (B) any subdivision, combination or reclassification
of such Common Shares, and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
current per share market price will be appropriately adjusted to take into
account ex-dividend trading or to reflect the current per share market price per
Common Share equivalent. The closing price for each day will 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
32
<PAGE> 36
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Common Shares 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 Common Shares are listed or admitted
to trading or, if the Common Shares 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
Common Shares 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 Shares selected by the Directors of the Company. If the
Common Shares are not publicly held or not so listed or traded, or are not the
subject of available bid and asked quotes, "current per share market price" will
mean the fair value per share as determined in good faith by the Directors of
the Company, whose determination will be described in a statement filed with the
Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares will be determined in
the same manner as set forth above for Common Shares in Section 11(d)(i), other
than the last sentence thereof. If the current per share market price of the
Preferred Shares cannot be determined in the manner provided above, the "current
per share market price" of the Preferred Shares will be conclusively deemed to
be an amount equal to the current per share market price of the Common Shares
multiplied by one hundred (as such number may be appropriately adjusted to
reflect events such as stock splits, stock dividends, recapitalizations or
33
<PAGE> 37
similar transactions relating to the Common Shares occurring after the date of
this Agreement). If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, or the subject of available bid and asked
quotes, "current per share market price" of the Preferred Shares will mean the
fair value per share as determined in good faith by the Directors of the
Company, whose determination will be described in a statement filed with the
Rights Agent. For all purposes of this Agreement, the current per share market
price of one one-hundredth of a Preferred Share will be equal to the current per
share market price of one Preferred Share divided by one hundred.
(e) Except as set forth below, no adjustment in the
Purchase Price will be required unless such adjustment would require an increase
or decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not required to be made
will be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 will be made to the nearest cent or to the
nearest one one-millionth of a Preferred Share or one ten-thousandth of a Common
Share or other security, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 will be made
no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised becomes entitled to
receive any securities of the Company other than Preferred Shares, thereafter
the number and/or kind of such other securities so receivable upon exercise of
any Right (and/or the Purchase Price in respect thereof) will be subject to
adjustment from time to time in a manner and on terms as
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nearly equivalent as practicable to the provisions with respect to the Preferred
Shares (and the Purchase Price in respect thereof) contained in this Section 11,
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares (and the Purchase Price in respect thereof) will apply on like terms to
any such other securities (and the Purchase Price in respect thereof).
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder will evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share issuable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price pursuant
to Section 11(b) or Section 11(c), each Right outstanding immediately prior to
the making of such adjustment will thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred Share)
obtained by (i) multiplying (x) the number of one one-hundredths of a Preferred
Share issuable upon exercise of a Right immediately prior to such adjustment of
the Purchase Price by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights in substitution
for any adjustment in the number of one one-hundredths of a Preferred Share
issuable upon the exercise of a
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Right. Each of the Rights outstanding after such adjustment of the number of
Rights will be exercisable for the number of one one-hundredths of a Preferred
Share 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 will
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 will 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. Such record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, will be at least 10 calendar days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company will, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to the
provisions of Section 14, the additional Rights to which such holders are
entitled as a result of such adjustment, or, at the option of the Company, will
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof if required by the Company, new Right
Certificates evidencing all the Rights to which such holders are entitled after
such adjustment. Right Certificates so to be distributed will 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 will be registered
in the names
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of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Without respect to any adjustment or change in the
Purchase Price and/or the number and/or kind of securities issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number and kind of securities
which were expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the then par
value, if any, of the Preferred Shares or below the then par value, if any, of
any other securities of the Company issuable upon exercise of the Rights, the
Company will 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 Preferred Shares or such other securities, as the case may be,
at such adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise
requires 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 Preferred Shares or other securities of the
Company, if any, issuable upon such exercise over and above the number of
Preferred Shares or other 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 delivers to such holder a due bill or other
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appropriate instrument evidencing such holder's right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring
such adjustment.
(m) Notwithstanding anything in this Agreement to the
contrary, the Company will 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 its good faith judgment the Board of Directors of
the Company determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred
Shares at less than the current per share market price therefor, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (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 Shares is not taxable
to such shareholders.
(n) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the Record Date prior
to the Distribution Date (i) pays a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivides the outstanding Common Shares, (iii)
combines the outstanding Common Shares into a smaller number of shares, or (iv)
issues any shares of its capital stock in a reclassification of the outstanding
Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, will be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event equals the result
obtained by multiplying the
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number of Rights associated with each Common Share immediately prior to such
event by a fraction the numerator of which is the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the denominator
of which is the total number of Common Shares outstanding immediately following
the occurrence of such event. The adjustments provided for in this Section 11(n)
will be made successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SECURITIES. Whenever an
adjustment is made as provided in Section 11 or Section 13, the Company will
promptly (a) prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Preferred Shares and the Common
Shares a copy of such certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to each holder of a
Right Certificate in accordance with Section 26. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate. Failure to give any notice or
filing provided for in this Section 12 to any transfer agent or holder of a
Right, or any defect therein, will not affect the legality of the adjustment.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that:
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(i) at any time after a Person has become an Acquiring Person,
the Company consolidates with, or merges with or into, any other Person
and the Company is not the continuing or surviving corporation of such
consolidation or merger; or
(ii) at any time after a Person has become an Acquiring
Person, any Person consolidates with the Company, or merges with or
into the Company, and the Company is the continuing or surviving
corporation of such merger or consolidation and, in connection with
such merger or consolidation, all or part of the Common Shares is
changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or
(iii) at any time after a Person has become an Acquiring
Person, the Company, directly or indirectly, sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one or more transactions, assets or earning power
(including without limitation securities creating any obligation on the
part of the Company and/or any of its Subsidiaries) representing in the
aggregate more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons other
than the Company or one or more of its wholly owned Subsidiaries; then,
and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date
and the date of the occurrence of such Flip-over Event (A) each holder
of a Right thereafter has the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement at an exercise
price per Right equal to the product of the then-current Purchase Price
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<PAGE> 44
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the Share
Acquisition Date, such number of duly authorized, validly issued, fully
paid, nonassessable and freely tradable Common Shares of the Issuer,
free and clear of any liens, encumbrances and other adverse claims and
not subject to any rights of call or first refusal, as equals the
result obtained by (x) multiplying the then-current Purchase Price
by the number of one one-hundredths of a Preferred Share for which a
Right is exercisable immediately prior to the Share Acquisition Date
and dividing that product by (y) 50% of the current per share market
price of the Common Shares of the Issuer (determined pursuant to
Section 11(d)), on the date of the occurrence of such Flip-over Event;
(B) the Issuer will thereafter be liable for, and will assume, by
virtue of the occurrence of such Flip-over Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term
"Company" will thereafter be deemed to refer to the Issuer; and (D) the
Issuer will take such steps (including without limitation the
reservation of a sufficient number of its Common Shares to permit the
exercise of all outstanding Rights) in connection with such
consummation as may be necessary to assure that the provisions hereof
are thereafter applicable, as nearly as reasonably may be possible, in
relation to its Common Shares thereafter deliverable upon the exercise
of the Rights.
(b) For purposes of this Section 13, "Issuer" means (i)
in the case of any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above),
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and (ii) in the case of any Flip-over Event described in Section 13(a)(iii)
above, the Person that is the party receiving the greatest portion of the assets
or earning power (including without limitation securities creating any
obligation on the part of the Company and/or any of its Subsidiaries)
transferred pursuant to such transaction or transactions; PROVIDED, HOWEVER,
that, in any such case, (A) if (1) no class of equity security of such Person
is, at the time of such merger, consolidation or transaction and has been
continuously over the preceding 12-month period, registered pursuant to Section
12 of the Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of which is and has
been so registered, the term "Issuer" means such other Person; and (B) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person, a
class of equity security of two or more of which are and have been so
registered, the term "Issuer" means whichever of such Persons is the issuer of
the equity security having the greatest aggregate market value. Notwithstanding
the foregoing, if the Issuer in any of the Flip-over Events listed above is not
a corporation or other legal entity having outstanding equity securities, then,
and in each such case, (x) if the Issuer is directly or indirectly wholly owned
by a corporation or other legal entity having outstanding equity securities,
then all references to Common Shares of the Issuer will be deemed to be
references to the Common Shares of the corporation or other legal entity having
outstanding equity securities which ultimately controls the Issuer, and (y) if
there is no such corporation or other legal entity having outstanding equity
securities, (I) proper provision will be made so that the Issuer creates or
otherwise makes available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a kind or kinds of security or
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<PAGE> 46
securities having a fair market value at least equal to the economic value of
the Common Shares which each holder of a Right would have been entitled to
receive if the Issuer had been a corporation or other legal entity having
outstanding equity securities; and (II) all other provisions of this Agreement
will apply to the issuer of such securities as if such securities were Common
Shares.
(c) The Company will not consummate any Flip-over Event
if, (i) at the time of or immediately after such Flip-over Event, there are or
would be any rights, warrants, instruments or securities outstanding or any
agreements or arrangements in effect which would eliminate or substantially
diminish the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event, the shareholders
of the Person who constitutes, or would constitute, the Issuer for purposes of
Section 13(a) shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates, or (iii) the form or nature
of the organization of the Issuer would preclude or limit the exercisability of
the Rights. In addition, the Company will not consummate any Flip-over Event
unless the Issuer has a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) 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 to such consummation the Company and the
Issuer have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section 13
and further providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer will:
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(i) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such
registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(ii) take all 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; and
(iii) deliver to holders of the Rights historical
financial statements for the Issuer and each of its Affiliates
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).
14. FRACTIONAL RIGHTS AND FRACTIONAL SECURITIES. (a) The Company will
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the
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<PAGE> 48
Company will pay as promptly as practicable to the registered holders of the
Right Certificates with regard to which such fractional Rights otherwise would
be issuable, an amount in cash equal to the same fraction of the current market
value of one Right. For the purposes of this Section 14(a), the current market
value of one Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights otherwise would
have been issuable. The closing price for any day is 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 Directors of the
Company. If the Rights are not publicly held or are not so listed or traded, or
are not the subject of available bid and asked quotes, the current market value
of one Right will mean the fair value thereof as determined in good faith by the
Directors of the Company, whose determination will be described in a statement
filed with the Rights Agent.
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(b) The Company will not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement provides that the
holders of such depositary receipts have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company may pay to any Person to whom or which such fractional
Preferred Shares would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For purposes of
this Section 14(b), the current market value of one Preferred Share is the
closing price of the Preferred Shares (as determined in the same manner as set
forth for Common Shares in the second sentence of Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise; PROVIDED, HOWEVER,
that if the closing price of the Preferred Shares cannot be so determined, the
closing price of the Preferred Shares for such Trading Day will be conclusively
deemed to be an amount equal to the closing price of the Common Shares
(determined pursuant to the second sentence of Section 11(d)(i)) for such
Trading Day multiplied by one hundred (as such number may be appropriately
adjusted to reflect events such as stock splits, stock dividends,
recapitalizations or similar
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transactions relating to the Common Shares occurring after the date of this
Agreement); PROVIDED FURTHER, HOWEVER, that if neither the Common Shares nor the
Preferred Shares are publicly held or listed or admitted to trading on any
national securities exchange, or the subject of available bid and asked quotes,
the current market value of one Preferred Share will mean the fair value thereof
as determined in good faith by the Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the
Company will not be required to issue fractions of Common Shares or other
securities issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities. In lieu of issuing
any such fractional securities, the Company may pay to any Person to whom or
which such fractional securities would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of one such security. For
purposes of this Section 14(c), the current market value of one Common Share or
other security issuable upon the exercise or exchange of Rights is the closing
price thereof (as determined in the same manner as set forth for Common Shares
in the second sentence of Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise or exchange; PROVIDED, HOWEVER, that if
neither the Common Shares nor any such other securities are publicly held or
listed or admitted to trading on any national securities exchange, or the
subject of available bid and asked quotes, the current market value of one
Common Share or such other security will mean the fair value thereof as
determined in good faith by the Directors of the Company, whose
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determination will mean the fair value thereof as will be described in a
statement filed with the Rights Agent.
15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), 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 Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.
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 are
transferable only in connection with the transfer of the Common Shares;
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(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will 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.
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17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends, or
be deemed for any purpose the holder of Preferred Shares or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of Directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.
18. CONCERNING THE RIGHTS AGENT. (a) The Company will pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company will also indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding or expense,
incurred without negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done 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
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arising therefrom, directly or indirectly. The indemnity provided for herein
shall survive the expiration of the Rights, the termination of this Agreement,
and the resignation or removal of the Rights Agent. The costs and expenses of
enforcing this right of indemnification shall also be paid by the Company.
(b) The Rights Agent may conclusively rely upon and will be
protected and will incur no liability for or in respect of any action taken,
suffered, or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate evidencing
Preferred Shares or Common Shares or 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. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of the action.
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 is a party, or any corporation succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further
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act on the part of any of the parties hereto, PROVIDED that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. If at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates will have the full force provided in the Right Certificates
and in this Agreement.
(b) If at any time the name of the Rights Agent changes and at
such time any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates have not been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates will have the full force provided in the
Right Certificates and in this Agreement.
20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions
(and no implied duties or obligations, except the duty of good faith, shall be
read into this Agreement against the Rights Agent), by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, will be
bound:
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(a) Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal counsel for
the Company), and the opinion of such counsel will 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 deems it necessary or desirable that any fact or
matter 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, the President, any Vice
President, the Secretary or the Treasurer of the Company and delivered to the
Rights Agent, and such certificate will 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 will be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in respect
of the validity or
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execution of any Right Certificate (except its countersignature thereof); nor
will it be responsible for any breach by the Company of any covenant contained
in this Agreement or in any Right Certificate; nor will it be responsible for
any adjustment required under the provisions of Sections 11 or 13 (including any
adjustment which results in Rights becoming void) or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice of any
such adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of stock or other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of stock or other securities will,
when issued, be duly authorized, validly issued, fully paid and nonassessable.
(f) The Company 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
any person believed in good faith by the Rights Agent to be the Chairman, the
President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it will 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 or for
any delay in acting while waiting for such instructions.
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(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein will preclude the Rights Agent
from acting in any other capacity for the Company or for any other Person.
(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 will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof. The Rights Agent will not be
under any duty or responsibility to ensure compliance with any applicable
federal or state securities laws in connection with the issuance, transfer or
exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise, transfer, split up, combination or exchange,
either (i) 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 or 2 thereof, or (ii) any other
actual or suspected irregularity exists, the Rights Agent will not take any
further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company, and will
thereafter
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take further action with respect thereto only in accordance with the Company's
written instructions.
(k) 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.
(l) The Rights Agent shall not be required to take notice or
be deemed to have any notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate) under
this Agreement unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
calendar days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Shares or the Common Shares by registered or certified
mail, and, at the expense of the Company, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 calendar 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 Preferred Shares and the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
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Company will appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 calendar 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
Right Certificate (who will, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, will be a corporation or other legal entity organized and doing
business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in such state, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent will 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 will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will not affect
the
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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.
22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable or exchangeable for, or
convertible into Common Shares, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Directors of the Company, issue Right
Certificates representing an equivalent number of Rights as would have been
issued in respect of such Common Shares if they had been issued or sold prior to
the Distribution Date, as appropriately adjusted as provided herein as if they
had been so issued or sold; PROVIDED, HOWEVER, that (i) no such Right
Certificate will be issued if, and to the extent that, in its good faith
judgment the Directors of the Company determine that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to
the Person to whom or which such Right Certificate otherwise would be issued and
(ii) no such Right Certificate will be issued if, and to the extent that,
appropriate adjustment otherwise has been made in lieu of the issuance thereof.
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23. REDEMPTION. (a) Prior to the Expiration Date, the Directors of the
Company may, at their option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the Close
of Business on the later of (i) the Distribution Date and (ii) Share Acquisition
Date. Any such redemption will be effective immediately upon the action of the
Directors of the Company ordering the same, unless such action of the Directors
of the Company expressly provides that such redemption will be effective at a
subsequent time or upon the occurrence or nonoccurrence of one or more specified
events (in which case such redemption will be effective in accordance with the
provisions of such action of the Directors of the Company).
(b) Immediately upon the effectiveness of the redemption
of the Rights as provided in Section 23(a), 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 will be to receive the Redemption
Price, without interest thereon. Promptly after the effectiveness of the
redemption of the Rights as provided in Section 23(a), the Company will publicly
announce such redemption and, within 10 calendar days thereafter, will give
notice of such redemption to the holders of the then-outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Company; PROVIDED, HOWEVER, that the failure to
give, or any defect in, any such notice will not affect the validity of the
redemption of the Rights. Any notice that is mailed in the manner herein
provided will be deemed given, whether or not the holder receives the notice.
The notice of redemption mailed to the holders of Rights will state the method
by which the payment of the Redemption Price
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will be made. The Company may, at its option, pay the Redemption Price in cash,
Common Shares (based upon the current per share market price of the Common
Shares (determined pursuant to Section 11(d)) at the time of redemption), or any
other form of consideration deemed appropriate by the Directors of the Company
(based upon the fair market value of such other consideration, determined by the
Directors of the Company in good faith) or any combination thereof. The Company
may, at its option, combine the payment of the Redemption Price with any other
payment being made concurrently to holders of Common Shares and, to the extent
that any such other payment is discretionary, may reduce the amount thereof on
account of the concurrent payment of the Redemption Price. If legal or
contractual restrictions prevent the Company from paying the Redemption Price
(in the form of consideration deemed appropriate by the Directors) at the time
of redemption, the Company will pay the Redemption Price, without interest,
promptly after such time as the Company ceases to be so prevented from paying
the Redemption Price.
24. EXCHANGE. (a) The Directors of the Company may, at their option, at
any time after the Share Acquisition Date, exchange all or part of the
then-outstanding and exercisable Rights (which will not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)) for Common Shares
at an exchange ratio of one Common Share for each Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the Record Date (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Any such exchange will be effective immediately upon the
action of the Directors of the Company ordering the same, unless such action of
the Directors of the Company expressly provides that such
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exchange will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such exchange will
be effective in accordance with the provisions of such action of the Directors
of the Company). Notwithstanding the foregoing, the Directors of the Company
will not be empowered to effect such exchange at any time after any Person
(other than the Company or any Related Person), who or which, together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of
any Rights as provided in Section 24(a), and without any further action and
without any notice, the right to exercise such Rights will terminate and the
only right with respect to such Rights thereafter of the holder of such Rights
will be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. Promptly after the
effectiveness of the exchange of any Rights as provided in Section 24(a), the
Company will publicly announce such exchange and, within 10 calendar days
thereafter, will give notice of 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; PROVIDED, HOWEVER, that the failure to give, or any defect in,
such notice will not affect the validity of such exchange. Any notice that is
mailed in the manner herein provided will 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 Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange will be effected pro rata based on the
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number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any Common Share exchangeable for a
Right (i) equivalent common shares (as such term is used in Section 11(a)(iii)),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Directors of the Company (whose determination
will be described in a statement filed with the Rights Agent), equal to the
current market value of one Common Share (determined pursuant to Section 11(d))
on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.
25. NOTICE OF CERTAIN EVENTS. (a) If, after the Distribution Date, the
Company proposes (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend), (ii) to offer to
the holders of Preferred Shares rights, options or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the
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assets and earning power of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons other than the Company or one or more of its
wholly owned Subsidiaries, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
reclassification of the Common Shares then, in each such case, the Company will
give to each holder of a Right Certificate, to the extent feasible and in
accordance with Section 26, a notice of such proposed action, which specifies
the record date for the purposes of such stock dividend, distribution or
offering of rights, options 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 Common Shares and/or Preferred Shares, if any such date is
to be fixed, and such notice will be so given, in the case of any action covered
by clause (i) or (ii) above, at least 10 calendar days prior to the record date
for determining holders of the Preferred Shares for purposes of such action,
and, in the case of any such other action, at least 10 calendar days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
is the earlier.
(b) In case any Triggering Event occurs, then, in any
such case, the Company will as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 26, a
notice of the occurrence of such event, which specifies the event and the
consequences of the event to holders of Rights.
26. NOTICES. (a) Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the
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Company will be sufficiently given or made if sent by first class mail, postage
prepaid, and the Rights Agent recommends that any notice or demand authorized by
this Agreement to be given or made by any holder of a Rights Certificate or the
Company on the Rights Agent shall be sent or given by registered or certified
mail, and shall be deemed given or made on receipt. The holders of Rights
Certificates and the Company agree to assume the risk of giving notice or demand
on the Rights Agent if given by any other means. Any such notice or demand shall
be addressed (until another address is filed in writing with the Rights Agent)
as follows:
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
Attn: Corporate Trust Department
(b) Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights Agent will be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Olympic Steel, Inc.
5096 Richmond Road
Cleveland, Ohio 44146-1393
Attn: Michael D. Siegal,
Chairman & Chief Executive Officer
with a copy to:
Marc H. Morgenstern, Esq.
Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A.
1301 East Ninth Street, Suite 2600
Cleveland, Ohio 44114-1824
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(c) Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any
certificate evidencing Common Shares) will 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.
27. SUPPLEMENTS AND AMENDMENTS. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last two
sentences of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of Rights or Common Shares. From
and after the time at which the Rights cease to be redeemable pursuant to
Section 23, and subject to the last two sentences of this Section 27, the
Company may, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend this Agreement without the approval
of any holders of Rights or Common Shares 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 supplement or amend the
provisions hereunder in any manner which the Company may deem desirable;
provided that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), and no such supplement or
amendment shall cause the Rights again to become redeemable or cause this
Agreement again to become supplementable or amendable
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otherwise than in accordance with the provisions of this sentence. Without
limiting the generality or effect of the foregoing, this Agreement may be
supplemented or amended to provide for such voting powers for the Rights and
such procedures for the exercise thereof, if any, as the Directors of the
Company may determine to be appropriate. Upon the delivery of a certificate from
an 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 will
execute such supplement or amendment; PROVIDED, HOWEVER, that the failure or
refusal of the Rights Agent to execute such supplement or amendment will not
affect the validity of any supplement or amendment adopted by the Directors of
the Company, any of which will be effective in accordance with the terms
thereof. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment may be made which decreases the stated Redemption Price
to an amount less than $.01 per Right. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent.
28. SUCCESSORS; CERTAIN COVENANTS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.
29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the
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Common Shares) any legal or equitable right, remedy or claim under this
Agreement. This Agreement will be for the sole and exclusive benefit of the
Company, the Rights Agent, and the registered holders of the Right Certificates
(or prior to the Distribution Date, the Common Shares).
30. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Ohio and for all purposes will be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within such
State, except as to the rights and obligations of the Rights Agent, which shall
be governed by and construed in accordance with the laws of the State of
Illinois.
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 will remain in full force and
effect and will in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that nothing contained in this Section 31 will affect the ability of
the Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.
32. DESCRIPTIVE HEADINGS, ETC. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
Unless otherwise
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expressly provided, references herein to Articles, Sections, Schedules and
Exhibits are to Articles, Sections, Schedules and Exhibits of or to this
Agreement.
33. DETERMINATIONS AND ACTIONS BY THE DIRECTORS. For all purposes of
this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, will be made in accordance with Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Directors of the
Company will have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Directors of
the Company 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 any determination as to whether particular Rights shall
have become void). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, any omission with
respect to any of the foregoing) which are done or made by the Directors of the
Company in good faith will (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 Directors of the Company to any liability to any Person, including
without limitation the Rights Agent and the holders of the Rights.
34. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to be
an
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original, and all such counterparts will together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
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.
OLYMPIC STEEL, INC.
By: /s/ Michael D. Siegal
-----------------------------------
Name: Michael D. Siegal
Title: Chairman & Chief Executive Officer
NATIONAL CITY BANK
By: /s/ Marlayna Jeanclerc
-----------------------------------
Name: Marlayna Jeanclerc
Title: Vice President
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EXHIBIT A
---------
FORM OF CERTIFICATE OF ADOPTION OF AMENDMENT
TO AMENDED ARTICLES OF INCORPORATION
OF OLYMPIC STEEL, INC.
We, Michael D. Siegal, Chairman & Chief Executive Officer, and Marc H.
Morgenstern, Secretary, of OLYMPIC STEEL, INC., an Ohio corporation (the
"Company"), do hereby certify that pursuant to the authority conferred upon the
Directors of the Company (the "Directors") by the Articles of Incorporation of
the Company, the Directors at a meeting duly called and held on January 31, 2000
at which a quorum was present and acting throughout, adopted the following
resolution to amend the Amended Articles of Incorporation of the Company
pursuant to Section 1701.70(B)(1) of the Ohio Revised Code to create a series of
Serial Preferred Stock designated as Series A Junior Participating Preferred
Stock:
RESOLVED, that Article IV of the Amended Articles of
Incorporation of this Company be, and it hereby is, amended by adding after
subdivision A of Article IV of the Amended Articles of Incorporation a new
subdivision A-1 as set forth below:
SUBDIVISION A-1
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. There is established hereby a series of Serial
Preferred Stock that shall be designated Series A Junior Participating Preferred
Stock (hereinafter sometimes called this "Series" or the "Series A Junior
Participating Preferred Shares") and that shall have the terms set forth in this
Subdivision A-1.
A-1
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Section 2. The number of shares of this Series shall be
150,000.
Section 3. (a) The holders of record of Series A Junior
Participating Preferred Shares shall be entitled to receive, when and as
declared by the Directors in accordance with the terms hereof, out of funds
legally available for the purpose, cumulative quarterly dividends payable in
cash on the first day of January, April, July and October 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 Series A Junior Participating Preferred Share or fraction of a Series A
Junior Participating Preferred Share in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 per share or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares or Common Stock, or a subdivision of the outstanding
Common Stock (by reclassification or otherwise)), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any Series A Junior Participating Preferred Share or fraction of a Series A
Junior Participating Preferred Share. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in 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 Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled
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immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such Series A Junior
Participating Preferred Shares, 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 issues is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Shares 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. No dividends shall be paid upon or declared and set apart for any
Series A Junior Participating Preferred Shares for any dividend period unless at
the same time a dividend for the same dividend period, ratably in proportion to
the respective annual dividend rates fixed therefor, shall be paid upon or
declared and set apart for all Serial Preferred Stock of all series then
outstanding and entitled to receive such dividend. The Directors may fix a
record date for the determination of holders of Series A Junior Participating
Preferred Shares entitled to
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receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 40 days prior to the date fixed for the payment
thereof.
Section 4. The Series A Junior Participating Preferred Shares
are not redeemable.
Section 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Junior Participating Preferred Shares, unless,
prior thereto, the holders of Series A Junior Participating Preferred Shares
shall have received at least an amount per share equal to one hundred times the
then applicable Purchase Price as defined in the Rights Agreement, as the same
may be from time to time amended in accordance with its terms (which Purchase
Price is $20.00 as of January 31, 2000, subject to adjustment from time to time
as provided in the Rights Agreement, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, provided that the holders of shares of Series A Junior
Participating Preferred Shares shall be entitled to receive at least 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 (the "Series A Junior Participating Preferred Shares
Liquidation Preference").
(b) In the event, however, that the net assets of the Company
are not sufficient to pay in full the amount of the Series A Junior
Participating Preferred Shares Liquidation Preference and the liquidation
preferences of all other series of Serial
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Preferred Stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Shares as to distribution of assets in Liquidation, all
shares of this Series and of such other series of Serial Preferred Stock shall
share ratably in the distribution of assets (or proceeds thereof) in Liquidation
in proportion to the full amounts to which they are respectively entitled.
(c) In the event the Company shall at any time declare or pay
any dividend on the Common Stock payable in consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of a dividend in
Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled immediately prior to such event pursuant to the
proviso set forth in paragraph (a) above, 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.
(d) The merger or consolidation of the Company into or
with any other corporation, or the merger of any other corporation into it, or
the sale, lease or conveyance of all or substantially all the property or
business of the Company, shall not be deemed to be a Liquidation for the purpose
of this Section 5.
Section 6. The Series A Junior Participating Preferred Shares shall not
be convertible into Common Stock.
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Section 7. The Series A Junior Participating Preferred Shares shall
have the voting rights provided for in Subdivision A of this Article IV and such
other voting rights as are provided by law.
Section 8. The Articles of Incorporation of the Corporation shall not
be further amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Junior Participating
Preferred Shares so as to affect them adversely without the affirmative vote of
the holders of two-third (2/3) or more of the outstanding shares of Series A
Junior Participating Preferred Shares, voting separately as a class.
Section 9. Series A Junior Participating Preferred Shares may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holders fractional shares, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Junior
Participating Preferred Shares.
IN WITNESS WHEREOF, Michael D. Siegal, President, and Marc H. Morgenstern,
Secretary, of Olympic Steel, Inc., acting for and on behalf of the Company, have
hereunto subscribed their names this 31st day of January, 2000.
-----------------------------------
President
------------------------------------
Secretary
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EXHIBIT B
---------
FORM OF RIGHT CERTIFICATE
Certificate No. R- ____________ __________ Rights
NOT EXERCISABLE AFTER JANUARY 31, 2010 (SUBJECT TO POSSIBLE EXTENSION
AT THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
OLYMPIC STEEL, INC.
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 January 31, 2000 (the "Rights Agreement"), between
Olympic Steel, Inc., an Ohio corporation (the "Company"), and National City
Bank, as rights agent (the "Rights Agent"), to purchase
B-1
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from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on the
Expiration Date (as such term is defined in the Rights Agreement) at the
principal office or offices of the Rights Agent designated for such purpose, one
one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $20.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election and related Certificate duly executed. If
this Right Certificate is exercised in part, the holder will be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised. The number of Rights evidenced by
this Right Certificate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of the date
of the Rights Agreement, based on the Preferred Shares as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right
B-2
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Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the Rights
Agreement. Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and can be obtained from the Company without charge
upon written request therefor. Terms used herein with initial capital letters
and not defined herein are used herein with the meanings ascribed thereto in the
Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered
B-3
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to the Rights Agent that represents Rights that are or have become void pursuant
to the provisions of the Rights Agreement will be canceled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the
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Right or Rights represented hereby, nor will anything contained herein or in the
Rights Agreement be construed to confer upon the holder hereof, as such, any of
the rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate have
been exercised in accordance with the provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________________, 20___.
ATTEST: Olympic Steel, Inc.
By: By:
-------------------------- ---------------------------
Name: Name:
Title: Title:
Countersigned:
National City Bank
By:
--------------------------
Authorized Signature
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<PAGE> 84
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers
unto______________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _________________, 20___
--------------------------
Signature
Signature Guaranteed:
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<PAGE> 85
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in 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 Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _________________, 20___
--------------------------
Signature
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<PAGE> 86
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
Olympic Steel, Inc.
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities 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 is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
Please insert social security or other identifying number: ____________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ________________, 20____
---------------------------
Signature
Signature Guaranteed:
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<PAGE> 87
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ________________, 20___
--------------------------
Signature
B-9
<PAGE> 88
NOTICE
------
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17Ad-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
B-10
<PAGE> 89
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
---------------------------------------------
The Directors (the "Directors") of Olympic Steel, Inc. (the "Company")
have declared a dividend distribution of one right (the "Rights") for each
outstanding share of common stock, without par value (the "Common Shares"), of
the Company. The distribution is payable on March 6, 2000 (the "Record Date") to
the shareholders of record as of the close of business on the Record Date. Each
Right entitles the registered holder thereof to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company at a price (the
"Purchase Price") $20.00 per one one-hundredth of a Preferred Share, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of January 31, 2000 (the "Rights Agreement"), between the
Company and National City Bank, as Rights Agent (the "Rights Agent").
Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the "Distribution
Date") of: (i) the close of business on the tenth calendar day following the
first date (the "Share Acquisition Date") of a public announcement that a person
or group (other than a Related Person or an Exempted Person), together with its
affiliates and associates, has acquired beneficial ownership of 15% or more of
the outstanding Common Shares (any such person or group being hereinafter called
an "Acquiring Person") or (ii) the close of business on the tenth business day
(or such later date as may be specified by the Directors) following the
commencement of a tender offer or exchange offer by a person (other than the
Company or a Related Person), the consummation of which would result in
beneficial ownership by such person of 15% or more of the outstanding Common
Shares. "Related Person"
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includes any subsidiary of the Company or any employee benefit or stock
ownership plan of the Company or any of its subsidiaries. "Exempted Person"
means Michael D. Siegal, the Company's Chairman & Chief Executive Officer who
presently owns approximately 15% of the outstanding shares. The Rights Agreement
provides that, until the Distribution Date, the Rights may be transferred with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), any certificate dated after
the Record Date evidencing Common Shares of the Company will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), the surrender for
transfer of any certificates evidencing Common Shares will also constitute the
transfer of the Rights associated with such certificates. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of Common Shares as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. No Right is exercisable at any time
prior to the Distribution Date. The Rights will expire on the tenth anniversary
of the Record Date (the "Final Expiration Date") unless earlier redeemed,
exchanged or amended by the Company as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a shareholder of
the Company, including the right to vote or to receive dividends.
The Purchase Price payable, and the number of the Preferred Shares or
other securities issuable, upon exercise of the Rights will be subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of
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<PAGE> 91
Preferred Shares of certain rights or warrants to subscribe for or purchase the
Preferred Shares at a price, or securities convertible into the Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness, cash (excluding regular periodic cash
dividends), assets, stock (excluding dividends payable in the Preferred Shares)
or subscription rights or warrants (other than those referred to above). The
number of outstanding Rights and the number of Preferred Shares issuable upon
exercise of each Right will be subject to adjustment in the event of a stock
dividend on the Common Shares payable in Common Shares or a subdivision,
combination or reclassification of Common Shares occurring, in any such case,
prior to the Distribution Date.
The Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled, in connection with the
declaration of a dividend on the Common Shares, to a preferential dividend
payment equal to the greater of (i) $1.00 per share and (ii) an amount equal to
100 times the related dividend declared per Common Share. Subject to customary
anti-dilution provisions, in the event of liquidation, the holders of Preferred
Shares will be entitled to a preferential liquidation payment equal to the
greater of (a) $100 per share and (b) an amount equal to 100 times the
liquidation payment made per Common Share.
Rights will be exercisable to purchase Preferred Shares only after the
Distribution Date occurs and prior to the occurrence of a Flip-in Event as
described below. A Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second paragraph of this
summary could precede the
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<PAGE> 92
occurrence of a Flip-in Event and thus result in the Rights being exercisable to
purchase Preferred Shares. A Distribution Date resulting from any occurrence
described in clause (i) of the second paragraph of this summary would
necessarily follow the occurrence of a Flip-in Event and thus result in the
Rights being exercisable to purchase Common Shares or other securities as
described below.
Under the Rights Agreement, in the event (a "Flip-in Event") that (i)
any person or group, together with its affiliates and associates, becomes an
Acquiring Person, (ii) any Acquiring Person or any affiliate or associate
thereof merges into or combines with the Company and the Company is the
surviving corporation, (iii) any Acquiring Person or any affiliate or associate
thereof effects certain other transactions with the Company, or (iv) during such
time as there is an Acquiring Person, the Company effects certain transactions,
in each case as described in the Rights Agreement, then, in each such case,
proper provision will be made so that, from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-in Event, each holder of a Right, other than Rights that are or were owned
beneficially by an Acquiring Person (which, from and after the date of a Flip-in
Event, will be void), will have the right to receive, upon exercise thereof at
the then-current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) that at the time of such Flip-in Event have a market value of
two times the exercise price of the Right.
In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person and
the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the
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Company is the surviving corporation, but all or part of the Common Shares are
changed or exchanged for stock or other securities of any other person or cash
or any other property, or (iii) 50% or more of the Company's assets or earning
power, including securities creating obligations of the Company, are sold, in
each case as described in the Rights Agreement, then, and in each such case,
proper provision will be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip- over Event, each holder of a Right, other than Rights which have become
void, will thereafter have the right to receive, upon the exercise thereof at
the then-current exercise price of the Right, that number of shares of common
stock (or, under certain circumstances, an economically equivalent security or
securities) of such other person that at the time of such Flip-over Event have a
market value of two times the exercise price of the Right.
From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will be
exercisable as described above, upon payment of the aggregate exercise price in
cash. In addition, at any time after the Share Acquisition Date and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Company may exchange the Rights
(other than any rights that have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
Preferred Shares (other than fractions
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<PAGE> 94
that are integral multiples of one one-hundredth of a Preferred Share, which
may, at the option of the Company, be evidenced by depositary receipts) or
fractional Common Shares or other securities issuable upon the exercise of
Rights. In lieu of issuing such securities, the Company may make a cash payment,
as provided in the Rights Agreement.
The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of the
Distribution Date and the Share Acquisition Date. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The Rights Agreement may be amended by the Company without the approval
of any holders of Rights Certificates, including amendments that increase or
decrease the Purchase Price, that add other events requiring adjustment to the
Purchase Price payable and the number of the Preferred Shares or other
securities issuable upon the exercise of the Rights or that modify procedures
relating to the redemption of the Rights, except that no amendment may be made
that decreases the stated Redemption Price to an amount less than $.01 per
Right.
The Directors will have the exclusive power and authority to administer
the Rights Agreement and to exercise all rights and powers specifically granted
to the Directors or to the Company therein, or as may be necessary or advisable
in the administration of the Rights Agreement, including without limitation the
right and power to interpret the provisions of the Rights Agreement and to make
all determinations deemed necessary or advisable for the administration of the
Rights Agreement (including
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<PAGE> 95
any determination to redeem or not redeem the Rights or to amend or not amend
the Rights Agreement). All such actions, calculations, interpretations and
determinations (including any omission with respect to any of the foregoing)
which are done or made by the Directors in good faith will be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and will not subject the Directors to any liability to any person,
including without limitation the Rights Agent and the holders of the Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.
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<PAGE> 1
OLYMPICSTEEL [LOGO]
Corporate Headquarters
5096 Richmond Road
Cleveland, Ohio 44146
(216) 292-3800
(216) 682-4065/FAX
February 15, 2000
To Our Shareholders:
We are pleased to inform you that Olympic Steel, Inc. has adopted
a share purchase rights plan. This action was taken after long and careful
study and was not taken in response to any pending takeover or proposed
change in control of the Company. The plan is intended to protect the
Company and its shareholders from potentially coercive takeover practices
or takeover bids which are inconsistent with the interests of the Company
and its shareholders. The adoption of a share purchase rights plan has
become common practice in major American companies and a well accepted
approach to ensuring that all shareholders receive a fair price and are
treated equally in the event of a takeover.
To effect the plan, the Directors declared a dividend of one share
purchase right for each outstanding share of the Company's common stock.
The distribution is being made to shareholders of record as of the close of
business on March 6, 2000.
Under the plan, the rights will initially trade together with the
Company's common stock and will not be exercisable. In the absence of
further action by the Directors, the rights issued under the plan generally
will become exercisable and allow shareholders to acquire shares of the
Company's common stock at a discounted price if a person or group acquires
15 percent or more of the Company's common stock. Rights held by persons
who exceed the applicable threshold(s) will be void. Under certain
circumstances, the rights will entitle the holder to buy shares in an
acquiring entity at a discounted price.
The plan also includes an exchange option. In general, after the
rights become exercisable, the Directors may, at their option, effect an
exchange of part or all of the rights (other than rights that have become
void) for shares of the Company's common stock. Under this option, the
Company would issue one share of common stock for each right, subject to
adjustment in certain circumstances.
The Company's Board of Directors may, at its option, redeem all
rights for $.01 per right, generally at any time prior to the rights
becoming exercisable. The rights will expire January 31, 2010, unless
earlier redeemed, exchanged, or amended by the Directors.
The issuance of the rights is not a taxable event, will not affect
the Company's reported financial condition or results of operations
(including earnings per share), should not interfere with the Company's
operating, financing, or investing activities, and will not change the way
in which the Company's common stock is currently traded.
<PAGE> 2
A summary of the share purchase rights plan (which explains the
terms and nature of the rights) is enclosed. Shareholders are encouraged to
review the summary carefully and retain it with their permanent records.
In adopting the share purchase rights plan, the Board has
expressed its confidence in the Company's future and its determination that
you, our shareholders, be given every opportunity to participate fully in
that future.
On behalf of the directors,
---------------------
Michael D. Siegal
Chairman
<PAGE> 1
NEWS CONTACT: CATHY S. KISH
R E L E A S E DIRECTOR-INVESTOR RELATIONS
TELEPHONE: (216) 292-3800
FAX: (216) 682-4065
OLYMPIC STEEL REPORTS 1999 ANNUAL AND FOURTH QUARTER RESULTS
AND ANNOUNCES ADOPTION OF SHARE PURCHASE RIGHTS PLAN
Cleveland, Ohio -- (February 3, 2000) Olympic Steel, Inc., (Nasdaq:
ZEUS), a leading national steel service center, today announced financial
results for the fourth quarter and year ended December 31, 1999. The Company
also announced today that its Board of Directors has approved the adoption of a
share purchase rights plan.
Tons sold for the year decreased 2.2% to 1.272 million, and net sales
decreased 8.9% to $524.8 million from $576.2 million. Earnings totaled $3.2
million, or $.30 per share. These results compare to a net loss of $8.4 million,
or $.79 per share for 1998. The 1998 results included a fourth quarter one-time
pretax charge of $19.1 million, or $1.17 per share after tax. Operating income
was $13.6 million, or 2.6% of net sales for 1999, compared to a loss of $4.5
million, or -0.8% for 1998.
Tons sold for the fourth quarter of 1999 increased 6.7% to 334 thousand
and net sales increased 0.5% to $136.9 million from $136.2 million. The company
reported a fourth quarter net loss of $1.0 million, or $0.10 per share. These
results compare to a loss of $12.4 million, or $1.16 per share for 1998.
Operating income was $991 thousand, or 0.7% of net sales, compared to an
operating loss of $16.9 million, or -12.4% for 1998.
"Our fourth quarter results were negatively impacted by the continued
poor agricultural marketplace. This has significantly affected our Iowa
facility's performance and start up. In addition, our laser welding joint
venture continues to proceed with research and development advancements but has
yet to reach the critical mass necessary to achieve profitability. Our core
business, including automotive, remains solid and it appears the steel market is
now improving," stated Michael D. Siegal, Chairman and Chief Executive Officer.
"Our accomplishments in 1999 included a successful startup of a new
machining and plate processing facility in Chambersburg, Pennsylvania,
establishment of a number of large national account programs, an extensive
investment in management development and training, a strategic focus in
positioning ourselves in the metals electronic marketplace, and successful
completion of Y2K compliance. As we begin 2000, we are focusing intensely on our
internal processes and cost reduction efforts. All of the Company's operations
have been charged with implementing five major operating objectives including
reducing operating expenses, increasing tonnage, and improving on-time delivery,
quality and inventory turns," continued Mr. Siegal.
PAGE 1 OF 4
<PAGE> 2
"We adopted the share purchase rights plan after careful study and the
action was not taken in response to any threatened takeover of the Company. The
rights plan is intended to protect the Company and its shareholders from
potentially coercive takeover practices or takeover bids that are inconsistent
with the interests of the Company and its shareholders. The adoption of a share
purchase rights plan has become common practice in major American companies and
a well accepted approach to ensuring that all shareholders are treated equally.
In enacting the rights plan, the Company wants to make clear that investors
planning to make a significant investment in the Company are expected to be
forthright about their intentions," concluded Mr. Siegal.
Under the plan, the Company will distribute rights as a dividend at the
rate of one right for each common share held by shareholders of record on March
6, 2000. The rights will initially trade together with the Company's common
stock and will not be exercisable. In the absence of further action by the
directors, the rights generally will become exercisable and allow the
shareholders to acquire the Company's common shares at a discounted price if a
person or group acquires 15% or more of the outstanding common shares. Rights
held by persons who exceed the applicable thresholds will be void. Under certain
circumstances, the rights will entitle the holder to buy shares in an acquiring
entity at a discounted price.
The issuance of the rights is not a taxable event, will not affect the
Company's reported financial condition or results of operations (including
earnings per share), and will not change the manner in which the Company's
common shares are currently traded.
The Company's Directors may, at their option, redeem all rights for
$.01 per right, generally at any time prior to the rights becoming exercisable.
The rights will expire on January 31, 2010, unless earlier redeemed, exchanged,
or amended by the directors.
Founded in 1954, Olympic Steel is a leading North American steel
service center that has positioned itself for growth in a consolidating steel
industry. It is experienced in the specialized processing and distribution of
flat-rolled carbon and stainless steel products, as well as tubular steel
products. Headquartered in Cleveland, Ohio, the company has over 1,000 employees
in 15 locations serving nine geographic markets. For further information about
Olympic Steel, Inc., visit the Company's web site at http://www.olysteel.com.
Forward-looking statements in this release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof. Such risks and uncertainties
include, but are not limited to, general business and economic conditions;
competitive factors such as the availability and pricing of steel and
fluctuations in demand, specifically in the automotive and agriculture markets;
work stoppages by automotive or steel manufacturers; and equipment installation
delays or malfunctions. Please refer to the Company's Securities and Exchange
Commission filings for further information.
PAGE 2 OF 4
<PAGE> 3
OLYMPIC STEEL
SUMMARY FINANCIAL INFORMATION
(in thousands, except per share and tonnage data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
-------------------------------------------
1999 1998
-------------- --------------
(unaudited)
SUMMARY
- -------
<S> <C> <C> <C>
Net sales $ 136,931 $ 136,193
Operating income (loss) 991 0.7% (16,923) -12.4%
Net income (loss) (1,048) (12,432)
Net income (loss) per share $ (0.10) $ (1.16)
============== ==============
DETAILS
Tons sold:
Direct 283,730 253,793
Toll 49,932 58,829
-------------- --------------
333,662 312,622
% change 6.7% -10.7%
============== ==============
Net sales $ 136,931 $ 136,193
% change 0.5% -12.6%
Cost of sales 106,436 107,682
-------------- --------------
Gross margin 30,495 22.3% 28,511 20.9%
Operating expenses:
Warehouse and processing 9,466 6.9% 8,726 6.4%
Administrative and general 7,957 5.8% 6,800 5.0%
Distribution 4,879 3.6% 4,511 3.3%
Selling 3,861 2.8% 3,379 2.5%
Occupancy 1,133 0.8% 1,104 0.8%
Depreciation and amortization 2,208 1.6% 1,858 1.4%
Asset writedown - - 19,056 14.0%
-------------- --------------
Total operating expenses 29,504 21.5% 45,434 33.4%
Operating income (loss) 991 0.7% (16,923) -12.4%
Loss from OLP joint venture (343) (121)
Income (loss) from TSP joint venture 11 (70)
Income from OCR joint venture - - 120
-------------- --------------
EBIT 659 (16,994)
Interest expense 1,490 1,049
Receivable securitization expense 874 901
-------------- --------------
Financing costs 2,364 1.7% 1,950 1.4%
Income (loss) before taxes (1,705) -1.2% (18,944) -13.9%
Income taxes (657) 38.5% (6,512) 34.4%
-------------- --------------
Net income (loss) $ (1,048) $ (12,432)
============== ==============
Net income (loss) per share $ (0.10) $ (1.16)
============== ==============
Weighted average shares outstanding 10,199 10,692
============== ==============
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
--------------------------------------------
1999 1998
-------------- --------------
(audited)
<S> <C> <C> <C>
SUMMARY
- -------
Net sales $ 524,794 $ 576,189
Operating income (loss) 13,602 2.6% (4,539) -0.8%
Net income (loss) 3,159 (8,431)
Net income (loss) per share $ 0.30 $ (0.79)
============== ==============
DETAILS
Tons sold:
Direct 1,065,200 1,070,360
Toll 207,156 231,004
-------------- --------------
1,272,356 1,301,364
% change -2.2% -2.1%
============== ==============
Net sales $ 524,794 $ 576,189
% change -8.9% -5.2%
Cost of sales 401,028 455,544
-------------- --------------
Gross margin 123,766 23.6% 120,645 20.9%
Operating expenses:
Warehouse and processing 35,226 6.7% 35,456 6.2%
Administrative and general 29,371 5.6% 27,166 4.7%
Distribution 17,968 3.4% 18,024 3.1%
Selling 15,176 2.9% 14,209 2.5%
Occupancy 4,571 0.9% 4,300 0.7%
Depreciation and amortization 7,852 1.5% 6,973 1.2%
Asset writedown - - 19,056 3.3%
-------------- --------------
Total operating expenses 110,164 21.0% 125,184 21.7%
Operating income (loss) 13,602 2.6% (4,539) -0.8%
Loss from OLP joint venture (1,018) (553)
Income (loss) from TSP joint venture (14) (264)
Income from OCR joint venture - - 495
-------------- --------------
EBIT 12,570 (4,861)
Interest expense 4,315 3,856
Receivable securitization expense 3,119 3,773
-------------- --------------
Financing costs 7,434 1.4% 7,629 1.3%
Income (loss) before taxes 5,136 1.0% (12,490) -2.2%
Income taxes 1,977 38.5% (4,059) 32.5%
-------------- --------------
Net income (loss) $ 3,159 $ (8,431)
============== ==============
Net income (loss) per share $ 0.30 $ (0.79)
============== ==============
Weighted average shares outstanding 10,452 10,692
============== ==============
</TABLE>
IT IS THE COMPANY'S POLICY NOT TO MAKE QUARTERLY OR ANNUAL SALES OR EARNINGS
PROJECTIONS FOR EXTERNAL USE AND NOT TO ENDORSE ANY ANALYST'S SALES OR EARNINGS
ESTIMATES.
PAGE 3 OF 4
<PAGE> 4
OLYMPIC STEEL
SUMMARY OTHER FINANCIAL INFORMATION
(in thousands, except ratios and number of shares)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1999 1998
------------------ ------------------
(audited)
<S> <C> <C>
Accounts receivable $ 9,802 $ 3,096
Inventories 119,585 121,407
Net property and equipment 124,204 119,312
Total assets 266,965 256,108
Current liabilities 36,248 43,225
Total debt (current & long-term) 93,426 76,520
Shareholders' equity 136,820 137,743
Shareholders' equity per share 13.56 12.88
Debt-to-equity ratio .68 to 1 .56 to 1
</TABLE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31,
---------------------------------------
1999 1998
------------------ ------------------
(audited)
<S> <C> <C>
Change in working capital $ 12,410 $ (16,194)
Capital expenditures, net 12,574 26,591
Acquistion of JNT Precision Machining -- 795
EBITDA, before asset write-down 21,454 21,490
Cost of common stock acquired 4,082 --
Number of shares acquired 601,300 --
</TABLE>
IT IS THE COMPANY'S POLICY NOT TO MAKE QUARTERLY OR ANNUAL SALES OR EARNINGS
PROJECTIONS FOR EXTERNAL USE AND NOT TO ENDORSE ANY ANALYST'S SALES OR EARNINGS
ESTIMATES.
PAGE 4 OF 4
