UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Simpson Manufacturing Co., Inc.
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(Exact name of registrant as specified in its charter)
Delaware 94-3196943
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
4637 Chabot Drive, Suite 200, Pleasanton, CA 94588
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(Address of principal executive offices)(Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Series A Particpating Preferred New York Stock Exchange, Inc.
Stock Purchase Rights
If this Form relates to the registration of a class of [ X ]
securities pursuant to Section 12(b) of the Exchange Act and
is effective pursuant to General Instruction A.(c), check the
following box.
If this Form relates to the registration of a class of [ ]
securities pursuant to Section 12(g) of the Exchange Act and
is effective pursuant to General Instruction A.(d), check the
following box.
Securities Act of 1933 registration statement file number to
which this form relates: N/A
Securities to be registered pursuant to Section 12(g) of the
Exchange Act:
None
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(Title of class)
<PAGE>
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On July 29, 1999, the Board of Directors of Simpson Manufacturing
Co., Inc. (the "Company") declared a dividend distribution on each
outstanding share of Common Stock of one Right to purchase the Company's
Series A Participating Preferred Stock. The dividend will be paid to
stockholders of record at the close of business on August 19, 1999. No
income was recognized by stockholders for tax purposes on payment of the
dividend. The Rights are not now exercisable, and it is not known at this
time whether they ever will be exercisable. No action can be taken by
holders of Rights at this time. The Rights will expire on the earlier of
(1) July 29, 2009, or (2) redemption or exchange of the Rights as
described below.
In general, until the Rights are exercisable or are redeemed or
exchanged or expire unexercised, each Right is associated with and cannot
be separated from the underlying share of Common Stock on which the right
was declared as a dividend. Accordingly, until the Rights are separate
from the Common Stock, (1) each holder of outstanding shares of Common
Stock is also the holder of an equal number of Rights, (2) any sale or
other transfer of shares of Common Stock by a holder thereof also will
cause a transfer of the associated Rights, (3) no income or loss will be
recognized with respect to the sale of Rights incident to a sale of Common
Stock, and (4) no certificates will be issued to evidence ownership of the
Rights, but certificates for shares of Common Stock issued after the
Record Date will refer to the associated Rights. Until a Right is
exercised, it confers no rights as a stockholder, including, without
limitation, the right to vote or to receive dividends.
The Rights will separate from the Common Stock if there is a
"Distribution Date." A Distribution Date would occur upon the earliest to
happen of (1) a public announcement that someone has become an "Acquiring
Person," meaning that such person (including affiliated or associated
persons or entities) has acquired, or obtained the right to acquire,
beneficial ownership of 15 percent or more of the outstanding shares of
Common Stock, other than as a result of repurchases of stock by the
Company, or (2) 10 days (unless such date is extended by the Board of
Directors) having elapsed following the commencement of (or a public
announcement of an intention to make) a tender offer or exchange offer
that would result in someone becoming an Acquiring Person. Any person who
is beneficial owner of 25 percent or more of the outstanding shares of
Common Stock on the date the Rights are distributed will not be deemed to
be an Acquiring Person, provided that if any such person subsequently
becomes the beneficial owner of 40 percent or more of the outstanding
shares of Common Stock, such person will be deemed to be an Acquiring
Person. If a Distribution Date occurs, the Rights will become exercisable
and separately tradable, and the Company will issue certificates for the
Rights as soon as possible.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock).
Each share of Preferred Stock will have a preferential quarterly dividend
in an amount equal to 1,000 times the dividend declared on each share of
Common Stock, but in no event less than $25. In the event of liquidation,
the holders of shares of Preferred Stock will receive a preferred
liquidation payment equal to the greater of $1,000 or 1,000 times the
payment made per each share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together
with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 1,000
times the amount and type of consideration received per share of Common
Stock. The rights of the Preferred Stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions.
<PAGE>
The amount of Preferred Stock that the holder of a Right is entitled
to receive upon exercise of a Right and the Purchase Price payable upon
exercise of a Right are both subject to adjustment. Initially, the
Purchase Price is $200 per Right. If no one has yet become an Acquiring
Person, payment of the Purchase Price entitles the holder of a Right to
receive only one one-thousandth of a share of Preferred Stock. If someone
has become an Acquiring Person, however, payment of the Purchase Price
entitles the holder to receive a number of one one-thousandth shares
having a value, based on the then current market value of the Common
Stock, equal to two times the Purchase Price. In addition, if someone has
become an Acquiring Person, and thereafter the Company is involved in a
merger or other business combination transaction, a holder of a Right also
will be able to acquire, upon payment of the Purchase Price, Common Stock
of the Company or its successor having a value, based on the market value
of the Company or its successor at the time of the transaction, equal to
twice the value of the Purchase Price. Some limitations apply to the
timing of exercise of the Rights, and any Rights belonging to an Acquiring
Person are null and void.
The Board of Directors may redeem the Rights in whole, but not in
part, at the Redemption Price of $0.01 per Right, at any time before there
is an Acquiring Person. After there is an Acquiring Person, the Rights
may be redeemed only in very limited circumstances. However, the Board of
Directors may in some cases also exchange all or part of the then
outstanding and exercisable Rights (except for Rights that have become
void) for shares of Common Stock at a rate of one share of Common Stock
(or substitute consideration) per Right. Upon redemption or exchange, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price or the exchange
consideration, as applicable.
A full description of the Rights is set forth in the Rights Agreement
between the Company and the Rights Agent, BankBoston, N.A. A copy of the
Rights Agreement is filed as an exhibit to this Registration Statement on
Form 8-A. THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS
AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE.
<PAGE>
ITEM 2. EXHIBITS.
3.1 Certificate of Incorporation of Simpson Manufacturing Co., Inc.,
dated February 23, 1999.
3.2 Bylaws of Simpson Manufacturing Co., Inc.
4.1 Rights Agreement dated as of July 30, 1999 between Simpson
Manufacturing Co., Inc. and BankBoston, N.A., which includes as
Exhibit B the form of Rights Certificate. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until the earlier
of (i) a public announcement that a person or a group of affiliated
or associated persons has acquired beneficial ownership of securities
representing 15% or more of the outstanding common stock or (ii) ten
days after a person or a group of affiliated or associated persons
has commenced or announced an intent to commence a tender offer or
exchange offer which, upon consummation thereof, would cause such
person or group to own beneficially securities representing 15% or
more of the outstanding common stock.
4.2 Certificate of Designation, Preferences and Rights of Series A
Participating Preferred Stock of Simpson Manufacturing Co., Inc.,
dated July 30, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized.
Dated: August 3, 1999 SIMPSON MANUFACTURING CO., INC.
By: /s/Stephen B. Lamson
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Stephen B. Lamson
Chief Financial Officer,
Secretary and Treasurer
<PAGE>
EXHIBIT INDEX
EXHIBIT
3.1 Certificate of Incorporation of Simpson Manufacturing Co., Inc.,
dated February 23, 1999.
3.2 Bylaws of Simpson Manufacturing Co., Inc.
4.1 Rights Agreement dated as of July 30, 1999 between Simpson
Manufacturing Co., Inc. and BankBoston, N.A., which includes as
Exhibit B the form of Rights Certificate. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until the
earlier of (i) a public announcement that a person or a group of
affiliated or associated persons has acquired beneficial ownership
of securities representing 15% or more of the outstanding common
stock or (ii) ten days after a person or a group of affiliated or
associated persons has commenced or announced an intent to
commence a tender offer or exchange offer which, upon consummation
thereof, would cause such person or group to own beneficially
securities representing 15% or more of the outstanding common
stock.
4.2 Certificate of Designation, Preferences and Rights of Series A
Participating Preferred Stock of Simpson Manufacturing Co., Inc.,
dated July 30, 1999.
EXHIBIT 3.(i).1
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CERTIFICATE OF INCORPORATION
OF
SIMPSON MANUFACTURING CO., INC.
ARTICLE I
The name of the corporation (the "Corporation") is:
SIMPSON MANUFACTURING CO., INC.
ARTICLE II
The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of the Corporation's registered agent at
such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of Delaware.
ARTICLE IV
1. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is twenty-five million
(25,000,000), of which five million (5,000,000) shares shall be Preferred
Stock of the par value of one cent per share ($0.01), and twenty million
(20,000,000) shares shall be Common Stock of the par value of one cent per
share ($0.01).
2. The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Article IV, to provide for the
issuance of shares of Preferred Stock in series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish from
time to time the number of shares to be included in each such series, and to
fix the designation, powers, preferences, and rights of the shares of each
such series and the qualifications, limitations and restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(a) the number of shares constituting that series and the
distinctive designation of that series;
(b) the dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends on
shares of that series;
(c) whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of such voting
rights;
(d) whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the Board of
Directors shall determine;
<PAGE>
(e) whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the
date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(f) whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms
and amount of such sinking fund;
(g) the rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of
shares of that series; and
(h) any other relative rights, preferences and limitations of
that series.
3. In furtherance of the foregoing authority and not in limitation
of it, the Board of Directors is expressly authorized, in the resolution or
resolutions providing for the issue of a series of Preferred Stock,
(a) to subject the shares of such series, without the consent of
the holders of such shares, to being converted into or exchanged for
shares of another class or classes of stock of the Corporation, or to
being redeemed for cash, property or rights, including securities, all
on such conditions and on such terms as may be stated in such
resolution or resolutions, and
(b) to make any of the voting powers, designations, preferences,
rights and qualifications, limitations or restrictions of the shares of
the series dependent upon facts ascertainable outside this Certificate
of Incorporation.
4. Whenever the Board of Directors shall have adopted a resolution or
resolutions to provide for
(a) the issue of a series of Preferred Stock,
(b) a change in the number of authorized shares of a series of
Preferred Stock, or
(c) the elimination from this Certificate of Incorporation of all
references to a previously authorized series of Preferred Stock by
stating that none of the authorized shares of a series of Preferred
Stock are outstanding and that none will be issued, the officers of
the Corporation shall cause a certificate, setting forth a copy of
such resolution or resolutions and, if applicable, the number of
shares of stock of such series, to be executed, acknowledged, filed and
recorded, in order that the certificate may become effective in
accordance with the provisions of the General Corporation Law of the
State of Delaware, as from time to time amended. When any such
certificate becomes effective, it shall have the effect of amending
this Certificate of Incorporation, and wherever such term is used in
this Certificate of Incorporation, it shall be deemed to include the
effect of the provisions of any such certificate.
5. Any holder of shares of Common Stock, or of shares of any series
of Preferred Stock which is entitled to vote with the holders of Common
Stock in the election of directors of the Corporation, shall be entitled at
all elections of directors to as many votes as shall equal the number of
votes which (except for this provision as to cumulative voting) he would be
entitled to cast for the election of directors with respect to his shares of
stock multiplied by the number of directors to be elected, and such holder
may cast all of such votes for a single candidate or may distribute them
among the number to be voted for, or for any two or more of them as he may
see fit. However, no stockholder shall be entitled to cumulate votes (i.e.,
cast for any candidate a number of votes greater than the number of votes
which such stockholder normally is entitled to cast) unless such candidate
or candidates' names have been placed in nomination prior to the meeting in
accordance with the Bylaws of the Corporation, and the stockholder has given
notice of the stockholder's intention to cumulate his votes in accordance
with the Bylaws of the Corporation. If any one stockholder has given such
notice, all stockholders may cumulate their votes for any candidate duly
nominated in accordance with the procedure as set forth in the Bylaws.
<PAGE>
ARTICLE V
1. The authorized number of directors of the Corporation shall be
fixed from time to time by resolution of the Board of Directors.
2. The Board of Directors (other than those directors elected by the
holders of any series of Preferred Stock voting separately from the holders
of Common Stock in any election of directors, as may be provided for or
fixed pursuant to the provisions of Article IV of this Certificate of
Incorporation) shall be divided into three classes, designated Class I,
Class II, and Class III, as nearly equal in number as possible, and the term
of office of directors of one class shall expire at each annual meeting of
stockholders, and in all cases as to each director until his successor shall
be elected and shall qualify or until his earlier resignation, removal from
office, death or incapacity. Additional directorships resulting from an
increase in number of directors shall be apportioned among the classes as
equally as possible. One class of directors shall be initially elected for
a term expiring at the annual meeting of stockholders to be held in the year
2000, another class shall be initially elected for a term expiring at the
annual meeting of stockholders to be held in the year 2001, and another
class shall be initially elected for a term expiring at the annual meeting
of stockholders to be held in the year 2002. At each succeeding annual
meeting of stockholders, a number of directors equal to the number of
directors of the class whose term expires at the time of such meeting shall
be elected to hold office until the third succeeding annual meeting of
stockholders after their election.
3. Except as otherwise provided for or fixed pursuant to the
provisions of Article IV of this Certificate of Incorporation relating to
the rights of the holders of any series of Preferred Stock to elect
additional directors, and subject to the provisions hereof, newly-created
directorships resulting from any increase in the authorized number of
directors, and any vacancies on the Board resulting from death, resignation,
disqualification, removal, or other cause, may be filled only by the
affirmative vote of a majority of the remaining directors then in office,
even though less than a quorum of the Board. Any director elected in
accordance with the preceding sentence shall hold office for the remainder
of the full term of the class of directors in which the new directorship was
created or in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified, subject to his earlier
death, resignation or removal. Subject to the provisions of this
Certificate of Incorporation, no decrease in the number of directors
constituting the Board shall shorten the term of any incumbent director.
ARTICLE VI
The Board of Directors is expressly authorized to make and alter the
Bylaws of the Corporation, without any action on the part of the
stockholders.
ARTICLE VII
Any action which may be taken by stockholders of the Corporation at an
annual or special meeting and which requires the approval of at least a
majority of
(a) the voting power of the securities of the Corporation present
at such meeting and entitled to vote on such action, or
(b) the shares of the Common Stock of the Corporation present at
such meeting,
may not be effected except at such an annual or special meeting by the vote
required for the taking of such action. The power of stockholders to
consent in writing, without a meeting, to the taking of any action is
specifically denied.
<PAGE>
ARTICLE VIII
A director of the Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended. Any amendment,
modification or repeal of the foregoing sentence shall not adversely affect
any right or protection of a director of the Corporation hereunder in
respect of any act or omission occurring prior to the time of such
amendment, modification or repeal.
ARTICLE IX
The Corporation is authorized to indemnify the directors and officers
of the Corporation to the fullest extent permissible under Delaware Law.
Any amendment, modification or repeal of the foregoing sentence shall not
adversely affect any right or protection of a director or officer of the
Corporation hereunder in respect of any act of omission occurring prior to
the time of such amendment, modification or repeal.
ARTICLE X
The name and mailing address of the incorporator is:
Stephen B. Lamson
Simpson Manufacturing Co., Inc.
4637 Chabot Drive, Suite 200
Pleasanton, CA 94588
IN WITNESS WHEREOF the incorporator has signed this certificate as of
this 23rd day of February, 1999.
By /s/Stephen B. Lamson
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Name: Stephen B. Lamson
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EXHIBIT 3.(ii).2
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BYLAWS
OF
SIMPSON MANUFACTURING CO., INC.
ARTICLE I
Registered Office
The initial registered office of the Corporation in Delaware shall
be The Corporation Trust Company, 1209 Orange Street, in the City of
Wilmington, County of New Castle, 19801.
Additional Offices
The Corporation may also have offices at such other places, either
within or without the State of Delaware, as the Board of Directors (the
"Board") may from time to time designate or the business of the Corporation
may require.
ARTICLE II
Stockholders
Section 1. Place of Meetings.
Meetings of the stockholders may be held at any place within or
without the State of Delaware which may be designated by the Board of
Directors. In the absence of any such designation, stockholders' meetings
shall be held at the principal executive office of the Corporation in
California.
Section 2. Annual Meeting.
The annual meeting of the stockholders shall be held at a place
and time designated by the Board of Directors. At each such annual meeting,
the stockholders shall elect the successors to the class of directors whose
term expires at such meeting, and any other business properly brought before
the meeting, in accordance with the provisions of the Certificate of
Incorporation and these Bylaws, may be transacted.
Section 3. Special Meetings.
Special meetings of the stockholders for any purpose or purposes
may be called at any time by the Board of Directors.
<PAGE>
Section 4. Notice of Meetings.
Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given not less
than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote thereat. Such notice shall state the place,
date and hour of the meeting. In the case of a special meeting, such notice
shall specify the general nature of the business to be transacted and no
other business may be transacted at such meeting. In the case of the annual
meeting, the notice shall specify those matters which the Board of
Directors, at the time of the mailing of the notice, intends to present for
action by the stockholders. The notice of any meeting at which directors
are to be elected shall include the names of the nominees intended at the
time of the notice to be presented by the Board for election. Any such
notice shall also state any other matters required by statute.
Notice of a stockholders' meeting or any report shall be given
either personally or by mail or other means of written communication (which
includes, without limitation and wherever used in these Bylaws, telegraphic
and facsimile communication), postage or fees prepaid, addressed to each
stockholder at the address of such stockholder appearing on the books of the
Corporation or given by such stockholder to the Corporation for the purpose
of notice, or, if no such address appears or is given, at the place where
the principal executive office of the Corporation is located, if any, or, if
none, at the place where the principal business office of the Corporation is
located, or by publication at least once in a newspaper of general
circulation in the county in which such office is located. The notice or
report shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by other means of written
communication. If any notice or report addressed to a stockholder at the
address of such stockholder appearing on the books of the Corporation is
returned to the Corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver the
notice or report to such stockholder at such address, all future notices or
reports shall be deemed to have been duly given without further mailing,
until such stockholder shall have notified the Corporation in writing of
such stockholder's address for the purpose of notice, if the same shall be
available for such stockholder on written demand at such office for a period
of one year from the date of the giving of the notice or report to all other
stockholders.
When a stockholders' meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is
taken. If the adjournment is for more than forty-five days or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting. At the adjourned meeting the Corporation
may transact any business which might have been transacted at the original
meeting.
<PAGE>
Section 5. Advance Notice of Stockholder Business and Stockholder Nominees.
At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting.
Commencing with the annual meeting in the year 2000, to be properly brought
before an annual meeting, business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation, not less
than 75 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 85 days' notice or prior public disclosure
of the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (b) the
name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of
the Corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding
anything in the Bylaws to the contrary, no business shall be conducted at
any annual meeting except in accordance with the procedures set forth in
this Section 5. The Chairman of the annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this
Section 5, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
Commencing with the annual meeting in the year 2000, only
persons who are nominated in accordance with the procedures set forth in
this Section 5 shall be eligible for election as Directors. Nominations of
persons for election to the Board of Directors of the Corporation may be
made at a meeting of stockholders by or at the direction of the Board of
Directors or by any stockholder of the Corporation entitled to vote for the
election of Directors at the meeting who complies with the notice procedures
set forth in this Section 5. Such nominations, other than those made by or
at the direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 75 days nor
more than 90 days prior to the meeting provided, however, that in the event
<PAGE>
that less than 85 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the 10th
day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. Such stockholder's notice shall
set forth (a) as to each person whom the stockholder proposed to nominate
for election or re-election a Director, (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
Corporation which are beneficially owned by such person, and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including without limitation such persons'
written consent to being named in the proxy statement as a nominee and to
serving as a Director if elected); and (b) as to the stockholder giving the
notice (i) the name and address, as they appear on the Corporation's books,
of such stockholder and (ii) the class and number of shares of the
Corporation which are beneficially owned by such stockholder. At the
request of the Board of Directors any person nominated by the Board of
Directors for election as a Director shall furnish to the Secretary of the
Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be
eligible for election as a Director of the Corporation unless nominated in
accordance with the procedures set forth in this Section 5. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the
meeting that a nomination was not made in accordance with the procedures
prescribed by the Bylaws, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
Section 6. Quorum.
The presence of holders of the shares of stock having a majority
of the votes which could be cast by the holders of all outstanding shares of
stock entitled to vote at any meeting, represented in person or by proxy,
shall be necessary and sufficient to constitute a quorum. If a quorum is
present, the affirmative vote of the majority of the votes entitled to be
cast at such meeting, or such greater number of votes as may be required by
these Bylaws or the Certificate of Incorporation (which shares voting
affirmatively also constitute at least a majority of the required quorum),
shall be the act of the stockholders.
The stockholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until
adjournment notwithstanding the withdrawal of enough stockholders to leave
less than a quorum, if any action taken (other than adjournment) is approved
by at least a majority of the shares required to constitute a quorum.
In the absence of a quorum, any meeting of stockholders may be
adjourned from time to time by a majority of the votes entitled to be cast
at such meeting represented either in person or by proxy.
<PAGE>
Section 7. Voting Rights.
Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote of
stockholders. Any holder of shares entitled to vote on any matter, other
than elections to office, may vote part of the shares in favor of the
proposal and refrain from voting the remaining shares or vote them against
the proposal, but, if any stockholder fails to specify the number of shares
such stockholder is voting affirmatively, it will be conclusively presumed
that such stockholder's approving vote is with respect to all shares such
stockholder is entitled to vote.
Every person entitled to vote shares may authorize another
person or persons to act by proxy with respect to such shares. No proxy
shall be valid after the expiration of one year from the date thereof unless
otherwise provided in the proxy. A proxy shall be irrevocable if it states
that it is irrevocable and if and only so long as, it is coupled with an
interest sufficient in law to support an irrevocable proxy. Subject to the
foregoing and to the express terms and conditions of any proxy, every proxy
shall continue in full force and effect until revoked by the person
executing it, which revocation must be prior to the vote. Such revocation
may be effected by a writing delivered to the Corporation stating that the
proxy is revoked or by a subsequent proxy executed by the person executing
the prior proxy and presented to the meeting or, as to any meeting, by
attendance at such meeting and voting in person by the person executing the
proxy. A proxy is not revoked by the death or incapacity of the maker
unless, before the vote is counted, written notice of such death or
incapacity is received by the Corporation.
In any election of Directors, any form of proxy in which the
Directors to be voted on are named therein as candidates and which is marked
by a stockholder "withhold," or otherwise marked in a manner indicating that
the authority to vote for the election of Directors is withheld, shall not
be voted for the election of a Director.
Every stockholder entitled to vote at any election of directors
may cumulate such stockholder's votes and give one candidate a number of
votes equal to the number of directors to be elected multiplied by the
number of votes to which such stockholder's shares are normally entitled, or
distribute such stockholder's votes on the same principle among as many
candidates as such stockholder thinks fit; provided, that no stockholder
shall be entitled so to cumulate votes or cast for any candidate a number of
votes greater than the number of votes which such stockholder normally is
entitled to cast unless such candidate's or candidates' name(s) have been
placed in nomination in accordance with these Bylaws and such stockholder
has given notice in writing to the Secretary of the Corporation of his
intention to cumulate his votes not less than 65 days prior to the meeting.
<PAGE>
If proper notice of an intent to cumulate votes has been received by the
Secretary and not withdrawn by the stockholder by the sixtieth (60th) day
preceding the meeting date, the Corporation shall so indicate in the
notice of meeting sent to all stockholders pursuant to Section 4 of this
Article II. If any one stockholder has given such notice, all stockholders
may cumulate their votes for any candidate duly nominated in accordance with
these Bylaws. In any election of directors, the candidates receiving the
highest number of affirmative votes of the shares entitled to be voted for
them up to the number of directors to be elected by such shares are elected;
votes against the directors and votes withheld shall have no legal effect.
Section 8. Determination of Stockholders of Record.
So that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting or entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted by the
Board of Directors and which record date: (1) in the case of determination
of stockholders entitled to vote at any meeting of stockholders or
adjournment thereof, shall, unless otherwise required by law, not be more
than sixty nor less than ten days before the date of such meeting; and (2)
in the case of any other action, shall not be more than sixty days prior to
such other action.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the business day next preceding the day
on which notice is given or, if notice is waived, at the close of business
on the business day next preceding the day on which the meeting is held.
The record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto, or the sixtieth day prior to the date of
such other action, whichever is later.
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting unless the Board of Directors fixes a new record date for the
adjourned meeting, but the Board of Directors shall fix a new record date if
the meeting is adjourned for more than forty-five days from the date set for
the original meeting.
Stockholders at the close of business on the record date are
entitled to notice and to vote or to receive the dividend, distribution or
allotment of rights or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the Corporation
after the record date, except as otherwise provided in the Certificate of
Incorporation or by agreement.
<PAGE>
ARTICLE III
Board of Directors
Section 1. Powers and Duties.
Subject to the Delaware General Corporations Law and any
limitations in the Certificate of Incorporation and these Bylaws as to
action to be authorized or approved by the stockholders, the business
affairs of the Corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board of Directors.
A director shall perform the duties of a director, including
duties as a member of any committee of the Board of Directors on which a
director may serve, in good faith, in a manner such director believes to be
in the best interests of the Corporation and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would
use under similar circumstances.
Section 2. Number.
The authorized number of directors shall be fixed from time to
time by resolution of the Board of Directors, approved by at least a
majority of the Directors then in office.
Section 3. Election and Term.
The Board of Directors (other than those directors elected by
the holders of any series of Preferred Stock voting separately from the
holders of Common Stock in any election of Directors, as may be provided for
or fixed pursuant to the Certificate of Incorporation) shall be divided into
three classes, designated Class I, Class II, and Class III, as nearly equal
in number as possible, and the term of office of directors of one class
shall expire at each annual meeting of stockholders, and in all cases as to
each director until his successor shall be elected or until his earlier
resignation, removal from office, death or incapacity. Additional
directorships resulting from an increase in number of directors shall be
apportioned among the classes as equally as possible. One class of
directors shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in 2000, another class shall be initially
elected for a term expiring at the annual meeting of stockholders to be held
in 2001, and another class shall be initially elected for a term expiring at
the annual meeting of stockholders to be held in 2002. At each succeeding
annual meeting of stockholders, a number of directors equal to the number of
directors of the class whose term expires at the time of such meeting shall
be elected to hold office until the third succeeding annual meeting of
stockholders after their election. Directors, including directors elected
to fill vacancies, shall be elected by the holders of shares empowered to
vote therefor pursuant to the provisions of the Delaware General
Corporations Code and the Certificate of Incorporation.
<PAGE>
Section 4. Vacancies.
A vacancy or vacancies in the Board of Directors shall be deemed
to exist in the event of the death, resignation or removal of any director
or in the event of an increase in the authorized number of directors.
Unless otherwise provided in the Certificate of Incorporation or
these Bylaws and except for a vacancy created by the removal of a director,
vacancies on the Board of Directors may be filled by a majority of the
Directors then in office, whether or not less than a quorum, or by a sole
remaining director.
Section 5. Removal of Directors.
Directors may not be removed, except for cause.
Section 6. Meetings.
Immediately following each annual meeting of the stockholders, a
regular meeting of the Board of Directors of the Corporation shall be held
at the place of said annual meeting or such other place as shall have been
designated by the Board of Directors for the purpose of organization,
appointment of officers and the transaction of other business. Other
regular meetings of the Board of Directors shall be held without call on
such date and time and in such place, within or without the State of
Delaware as may be fixed by the Board of Directors; provided, however, that
should any such day fall on a legal holiday, then said meeting shall be held
at the same time on the next day thereafter ensuing which is not a legal
holiday. No notice of regular meetings of the Board of Directors need be
given; provided, that notice of any change in the time or place of any such
regular meeting shall be given to all of the Directors in the same manner as
notice for special meetings of the Board of Directors.
Special meetings of the Board of Directors for any purpose or
purposes may be called at any time by the Chairman of the Board or President
or, if both the Chairman of the Board and the President are absent or are
unable or refuse to act, by any Vice President or by any two directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Director or sent by first-class mail or
telegram or facsimile transmission, charges prepaid, addressed to such
Director's address as it appears on the records of the Corporation or, if it
is not so shown on the records and is not readily ascertainable, at the
place at which the meetings of the Directors are regularly held. In case
such notice is mailed, it shall be deposited in the United States mail at
least four days prior to the time of the holding of the meeting. In case
such notice is telegraphed or sent by facsimile transmission, it shall be
delivered to a common carrier for transmission to the Director or actually
transmitted by the person giving the notice by electronic means to the
Director at least forty-eight hours prior to the time of the holding of the
meeting. In case such notice is delivered personally or by telephone as
<PAGE>
above provided, it shall be so delivered at least twenty-four hours prior to
the time of the holding of the meeting. Any notice given personally or by
telephone may be communicated either to the Director or to a person at the
office of the Director whom the person giving the notice has reason to
believe will promptly communicate it to the Director. Such deposit in the
mail, delivery to a common carrier, transmission by electronic means or
delivery, personally or by telephone, as above provided, shall be due, legal
and personal notice to such Director. The notice need not specify the place
of the meeting if the meeting is to be held at the principal executive
office of the Corporation, if any, or, if none, at the principal business
office of the Corporation in California, and need not specify the purpose of
the meeting.
Notice of a meeting need not be given to any director who signs
a waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack
of notice to such director. All such waivers, consents and approvals shall
be filed with the corporate records or made a part of the minutes of the
meeting.
A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. If the meeting
is adjourned for more than twenty-four hours, notice of any adjournment to
another time or place shall be given prior to the time of the adjourned
meeting to the Directors who were not present at the time of the
adjournment.
Meetings of the Board of Directors may be held at any place
within or without the state which has been designated in the notice of the
meeting or, if not stated in the notice or there is no notice, designated in
the Bylaws or by resolution of the Board of Directors.
Members of the Board of Directors may participate in a meeting
through use of conference telephone or similar communications equipment, so
long as all members participating in such meeting can hear one another.
Participation in a meeting pursuant to this section constitutes presence in
person at such meeting.
Section 7. Quorum.
A majority of the authorized number of directors constitutes a
quorum of the Board of Directors for the transaction of business.
Every act or decision done or made by a majority of the
Directors present at a meeting duly held at which a quorum is present is the
act of the Board of Directors, unless otherwise provided by law or unless a
greater number be required by the Certificate of Incorporation or these
Bylaws. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
<PAGE>
Section 8. Action Without a Meeting.
Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, if all members of the Board shall
individually or collectively consent in writing to such action. Such
written consent or consents shall be filed with the minutes of the
proceedings of the Board. Such action by written consent shall have the
same force and effect as a unanimous vote of the Board of Directors.
Section 9. Fees and Compensation.
Directors and members of committees may receive such
compensation, if any, for their services, and such reimbursement for
expenses, as may be fixed or determined by resolution of the Board of
Directors.
Section 10. Committees.
The provisions of this Article III shall also apply, with
necessary changes in points of detail, to committees of the Board of
Directors, if any, and to actions by such committees (except that special
meetings of a committee may be called at any time by any two members of the
committee), unless otherwise provided by these Bylaws or by the resolution
of the Board of Directors designating such committees. For such purpose,
references to "the Board of Directors" shall be deemed to refer to each such
committee and references to "Directors" and "members of the Board" shall be
deemed to refer to members of the committee. Committees of the Board of
Directors may be designated and shall be subject to limitations on their
authority as provided in section 141 of the Delaware General Corporations
Law.
ARTICLE IV
Officers
Section 1. Designation of Officers.
The Board of Directors shall appoint the officers of the
Corporation, including the Chairman of the Board or the President or both,
the Secretary, and the Chief Financial Officer. The Corporation may also
have such other officers as may be appointed by the Board of Directors with
such titles and duties as may be determined by the Board of Directors and as
may be necessary to enable it to sign instruments and share certificates.
If the Board shall name one or more persons as Vice Presidents, the order of
their seniority shall be in the order of their appointment, unless otherwise
specified by the Board of Directors. Any number of offices may be held by
the same person. All officers of the Corporation shall hold office from the
date appointed to the date of the next succeeding regular meeting of the
Board of Directors following the meeting of stockholders at which the Board
<PAGE>
of Directors is elected and until their successors are appointed; provided,
that any officers may be removed at any time with or without cause by the
Board of Directors. On the removal, resignation, death or incapacity of any
officer, the Board of Directors may declare such office vacant and fill such
vacancy. Any officer may resign at any time on written notice to the
Corporation without prejudice to the rights, if any, of the Corporation
under any contract to which the officer is a party. The salary and other
compensation of the officers shall be fixed from time to time by resolution
of the Board of Directors.
Section 2. Chairman of the Board.
The Chairman of the Board shall, when present, preside at all
meetings of the Board of Directors, shall preside at all meetings of the
stockholders, shall have authority to execute in the name of the Corporation
bonds, contracts, deeds, leases and other written instruments to be executed
by the Corporation (except where by law the signature of another officer is
required) and shall perform such other duties as the Board of Directors may
prescribe from time to time.
Section 3. President.
Subject to the control of the Board of Directors and to such
supervisory powers, if any, as may be given by the Board of Directors to the
Chairman of the Board, the President shall be the general manager and chief
executive officer of the Corporation, shall have general supervision,
direction and control of the business and officers of the Corporation and
shall perform all the duties customarily incident to that office. In the
absence of the Chairman of the Board or if there be no Chairman of the
Board, the President shall preside at all meetings of the Board of Directors
and of the stockholders and shall perform the duties of and may exercise all
other authority otherwise given to the Chairman of the Board, and shall
perform such other duties as the Board of Directors may prescribe from time
to time.
Section 4. Vice Presidents.
If the Board of Directors shall appoint one or more Vice
Presidents, the Vice Presidents, in the order of their seniority, may assume
and perform the duties of the President in the absence or disability of the
President or whenever the office of President is vacant. The Vice
Presidents shall have such titles, perform such other duties, and have such
other powers as the Board of Directors may prescribe from time to time.
<PAGE>
Section 5. Secretary.
The Secretary shall attend all meetings of the stockholders, the
Board of Directors and any committee appointed pursuant to section 9 of
Article III of these Bylaws and shall keep or cause to be kept at the
principal executive office or such other place as the Board of Directors may
order, a minute book of all such meetings, containing all acts and
proceedings thereof, the time and place of holding thereof, whether regular
or special, and, if special, how authorized, the notice thereof given, the
names of those present at directors' or committee meetings and the number of
shares present or represented at stockholders, meetings. The Secretary
shall give notice, in conformity with these Bylaws, of all meetings of the
stockholders, the Board of Directors or any such committee requiring notice.
The Secretary shall keep or cause to be kept at the principal executive
office, if any, or, if none, the principal business office in California, or
at the office of the Corporation's transfer agent a share register or a
duplicate share register showing the names of the stockholders and their
addresses, the number and classes of shares held by each, the number and
date of certificates issued for same, and the number and date of
cancellation of every certificate surrendered for cancellation. The
Secretary shall perform such other duties and have such other powers as the
Board of Directors may prescribe from time to time. The President may
direct any Assistant Secretary to assume and perform the duties of the
Secretary in the absence or disability of the Secretary and each Assistant
Secretary shall perform such other duties and have such other powers as the
Board of Directors may prescribe from time to time.
Section 6. Chief Financial Officer.
The Chief Financial Officer shall keep or cause to be kept the
books of account of the Corporation in a thorough and proper manner, and
shall render statements of the financial affairs of the Corporation in such
form and as often as required by the Board of Directors. The Chief
Financial Officer, subject to the direction of the Board of Directors, shall
have the custody of all funds and securities of the Corporation. The Chief
Financial officer shall perform all other duties customarily incident to
that office and shall perform such other duties and have such other powers
as the Board of Directors may prescribe from time to time. The President
may direct any Deputy Financial Officer to assume and perform the duties of
the Chief Financial Officer in the absence or disability of the Chief
Financial Officer and each Deputy Financial Officer shall perform such other
duties and have such other powers as the Board of Directors may prescribe
from time to time.
<PAGE>
ARTICLE V
Execution of Corporate Instruments and Exercise of
Rights Under Securities Owned by the Corporation
Section 1. Execution of Corporate Instruments.
The Board of Directors may, in its discretion, determine the
method and designate the signatory officer or officers or other person or
persons to execute any corporate instrument or document, or to sign the
corporate name without limitation, except where otherwise provided by law,
and such execution or signature shall bind the Corporation.
Unless otherwise required by law, any note, mortgage, evidence
of indebtedness, contract, share certificate, conveyance or other instrument
in writing, and any assignment or endorsement thereof, executed or entered
into between the Corporation and any other person, when signed by the
Chairman of the Board, the President or any Vice President and the
Secretary, any Assistant Secretary, the Chief Financial Officer or any
Deputy Financial Officer of the Corporation, is not invalidated as to the
Corporation by any lack of authority of the signing officers in the absence
of actual knowledge on the part of the other person that the signing
officers had no authority to execute the same.
All checks and drafts drawn on banks or other depositories of
funds to the credit of the Corporation, or in special accounts of the
Corporation, shall be signed by such person or persons as the Board of
Directors shall authorize so to do.
Section 2. Securities Owned by Corporation.
All securities of other corporations or other entities owned or
held by the Corporation for itself, or for other parties in any capacity,
shall be voted, all proxies and other powers with respect thereto shall be
executed, and all rights appurtenant or pursuant thereto shall be exercised
on behalf of the Corporation by the person authorized so to do by resolution
of the Board of Directors, or, in the absence of such authorization, by the
Chairman of the Board, the President or any Vice President.
ARTICLE VI
Shares of Stock
<PAGE>
Section 1. Form of Certificates.
Every holder of shares in the Corporation shall be entitled to
have a certificate signed in the name of the Corporation by the Chairman of
the Board, the President or a Vice President, and by the Chief Financial
Officer, a Deputy Financial officer, the Secretary or any Assistant
Secretary, certifying the number and class or series of shares owned by such
stockholder. Any or all of the signatures on any such certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed on a certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, the issuance of such certificate by the Corporation
shall have the same effect as if such person were such officer, transfer
agent or registrar at the date of issue.
If the shares of the Corporation are classified or if any class
of shares is divided into two or more series, any certificate representing
such shares shall bear conspicuously on its face, or on the reverse thereof
with conspicuous reference thereto on its face, one of the following: (a) a
statement of the rights, preferences, privileges and restrictions granted to
or imposed on the class or series of shares represented by such certificate
and on the holders thereof; (b) a summary of such rights, preferences,
privileges and restrictions with reference to the provisions of the
Certificate of Incorporation and any Certificate of Determination
establishing the same; or (c) a statement setting forth the office or agency
of the Corporation from which stockholders may obtain, on request and
without charge, a copy of the statement prescribed by clause (a) of this
paragraph.
Each such certificate shall also bear, conspicuously on its face
or on the reverse thereof with conspicuous reference thereto on its face,
any of the following, to the extent applicable: (a) that the shares are
subject to restrictions on transfer; (b) that the shares are assessable or
are not fully paid, including, in the case of partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon;
(c) that the shares are subject to a close corporation voting agreement or
an irrevocable proxy or restrictions on voting rights contractually imposed
by the Corporation; (d) that the shares are redeemable; and (e) that the
shares are convertible and the period for conversion.
When the Certificate of Incorporation is amended in any way
affecting the statements contained in certificates representing outstanding
shares, or it becomes desirable for any reason, in the discretion of the
Board of Directors, to cancel any outstanding certificate representing
shares and issue a new certificate therefor conforming to the rights of the
holder, the Board of Directors may order any holders of outstanding
certificates representing shares to surrender and exchange them for new
certificates within a reasonable time to be fixed by the Board of Directors.
<PAGE>
Section 2. Transfer of Shares.
Shares of stock of the Corporation may be transferred in any
manner permitted or provided by law. Before any transfer of stock is
entered on the books of the Corporation, or any new certificate issued
therefor, the outstanding certificate properly endorsed shall be surrendered
and canceled, unless such outstanding certificate has been lost, stolen or
destroyed.
Section 3. Lost Certificates.
The Corporation shall issue a new certificate representing
shares in the place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed; provided, that, prior and as a
condition to the issuance of such new certificate, the Board of Directors
may require the owner of the lost, stolen or destroyed certificate or the
owner's legal representative to give the Corporation a bond (or other
adequate security) sufficient to indemnify it against any claim that may be
made against it (including any expense or liability) on account of the
alleged loss, theft or destruction of any such certificate or the issuance
of such new certificate and may require such owner to furnish to the
Corporation such other affidavits, certificates or other documents as the
Board of Directors may deem necessary or advisable.
Section 4. Electronic Securities Recordation.
Notwithstanding the provisions of sections 1, 2 and 3 of this
Article VI, the Corporation may adopt a system of issuance, recordation and
transfer of its shares by electronic or other means not involving any
issuance of certificates, provided the use of such system by the Corporation
is permitted by and in accordance with applicable law.
ARTICLE VII
Corporate Seal
The corporate seal shall consist of a circular die bearing the
name of the Corporation and the state and date of its incorporation and
shall be kept and used by the Secretary or any Assistant Secretary as the
Secretary may direct. If and when authorized by the Board of Directors, a
duplicate of the corporate seal may be kept and used by such officer or
person as the Board of Directors may designate. Failure to affix the
corporate seal does not affect the validity of any instrument of the
Corporation.
<PAGE>
ARTICLE VIII
Amendments
New Bylaws may be adopted or these Bylaws may be amended or
repealed by the affirmative vote or written consent of a majority of the
outstanding shares entitled to vote, except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws. Subject to such right of
the stockholders to adopt, amend or repeal Bylaws, and except as otherwise
provided by law or the Certificate of Incorporation, Bylaws may be adopted,
amended or repealed by the Board of Directors.
ARTICLE IX
Indemnification of Agents
The Corporation shall indemnify each Corporate Servant (as
hereinafter defined) to the maximum extent that the Corporation is permitted
or empowered to do so under section 145 of the Delaware General Corporations
Law. In addition, the Corporation shall indemnify any person who is or was
a director or officer of the Corporation or is or was serving at the request
of the Corporation as a director or officer of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or was a
director or officer of a foreign or a domestic corporation which was a
predecessor corporation of the Corporation or of another enterprise at the
request of such predecessor corporation, and the Corporation shall hold such
director or officer harmless, from and against any and all claims,
liabilities, damages and expenses suffered or incurred by such director or
officer as a result of or in connection with any act or omission or
transaction of such director or officer in his or her capacity as such
director or officer; provided that no such director or officer shall be
indemnified by the Corporation for any acts or omissions or transactions
from which a director may not be relieved of liability pursuant to the
Delaware General Corporations Law, or for any acts, omissions or
transactions for which indemnity is expressly prohibited thereby.
As used in this Article IX, "Corporate Servant" shall mean any
natural person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, manager, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
organization or enterprise, nonprofit or otherwise, including an employee
benefit plan.
EXHIBIT 4.1
-----------
SIMPSON MANUFACTURING CO., INC.
and
BANKBOSTON, N.A.
Rights Agent
_____________
RIGHTS AGREEMENT
Dated as of July 30, 1999
<PAGE>
TABLE OF CONTENTS
Page
----
1. Certain Definitions 1
2. Appointment of Rights Agent 3
3. Issue of Rights Certificates 3
4. Form of Rights Certificates 5
5. Countersignature and Registration 5
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates 6
7. Exercise of Rights; Purchase Price; Expiration Date of Rights 6
8. Cancellation and Destruction of Rights Certificates 8
9. Reservation and Availability of Preferred Stock 8
10. Preferred Stock Record Date 9
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights 9
12. Certificate of Adjusted Purchase Price or Number of Shares 14
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 14
14. Additional Covenants 16
15. Fractional Rights and Fractional Shares 16
16. Rights of Action 17
17. Agreement of Rights Holders 18
18. Rights Certificate Holder Not Deemed a Stockholder 18
19. Concerning the Rights Agent 18
20. Merger or Consolidation or Change of Name of Rights Agent 19
21. Duties of Rights Agent 19
22. Change of Rights Agent 21
<PAGE>
23. Issuance of New Rights Certificates 21
24. Redemption, Termination and Exchange 22
25. Notice of Certain Events 24
26. Notices 25
27. Supplements and Amendments 25
28. Determination and Actions by the Board of Directors, etc 25
29. Successors 26
30. Benefits of This Agreement 26
31. Severability 26
32. Governing Law 26
33. Counterparts 26
34. Descriptive Headings 27
EXHIBIT A - Form of Certificate of Designation A-1
EXHIBIT B - Form of Rights Certificate B-1
EXHIBIT C - Summary of Rights C-1
<PAGE>
RIGHTS AGREEMENT
THIS AGREEMENT, dated as of July 30, 1999 between SIMPSON
MANUFACTURING CO., INC., a Delaware corporation (the "Company"), and
BANKBOSTON, N.A., a national banking association (the "Rights Agent"),
W I T N E S S E T H:
Whereas on July 29, 1999 the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock, $0.01 par value per
share, of the Company (the "Common Stock") outstanding as of the close of
business on August 19, 1999 (the "Record Date"), and contemplates the
issuance of one Right (subject to adjustment as provided herein) for each
share of Common Stock of the Company issued between the Record Date and
the earlier of the Distribution Date and the Expiration Date (as such
terms are hereinafter defined in Section 3(a) and Section 7(a),
respectively) (with Rights also to be issued in connection with certain
issuances of Common Stock after the Distribution Date, as provided more
fully herein), each Right representing the right to purchase when
exercisable one one-thousandth of a share of Series A Participating
Preferred Stock, $0.01 par value per share, of the Company ("Preferred
Stock") having the rights, powers and preferences set forth in the
Certificate of Designation attached hereto as Exhibit A, upon the terms
and subject to the conditions hereinafter set forth (the "Rights"):
N o w, T h e r e f o r e, in consideration of the promises and the
mutual agreements herein set forth, the parties hereto hereby agree as
follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, without the prior approval of the Company, shall
have become the Beneficial Owner (as such term is hereinafter defined) of
securities representing 15% or more of the shares of Common Stock then
outstanding or who was such a Beneficial Owner at any time on or after the
date hereof, whether or not such Person continues to be the Beneficial
Owner of securities representing 15% or more of the outstanding shares of
Common Stock; provided, however, that in no event shall a Person who or
which, together with all Affiliates and Associates of such Person, is the
Beneficial Owner of less than 15% of the Company's outstanding shares of
Common Stock become an Acquiring Person solely as a result of a reduction
of the number of shares of outstanding Common Stock, including repurchases
of outstanding shares of Common Stock by the Company, which reduction
increases the percentage of outstanding shares of Common Stock
beneficially owned by such Person (provided that any subsequent increase
in the amount of Common Stock beneficially owned by such Person, together
with all Affiliates and Associates of such Person, without the prior
approval of the Board of Directors of the Company shall cause such Person
to be an Acquiring Person); and provided, further, that "Acquiring Person"
shall not mean (i) the Company, (ii) any subsidiary of the Company (as
such term is hereinafter defined), (iii) any employee benefit plan of the
Company or any of its subsidiaries, (iv) any entity holding securities of
the Company organized, appointed or established by the Company or any of
its subsidiaries for or pursuant to the terms of any such plan, or (v) any
Person who as of the Record Date is (a) the Beneficial Owner of 25% or
more of the shares of Common Stock then outstanding (an "Exempt Person"),
(b) any Person who is an Affiliate or Associate of an Exempt Person, (c)
any person who acquires Beneficial Ownership of shares of Common Stock
from an Exempt Person by will or the laws of intestate succession or (d)
any person who is a trustee, executor or administrator of the estate of an
<PAGE>
Exempt Person during the period commencing with the death of such Exempt
Person and ending with the date when all shares owned by such estate have
been distributed; provided that any Exempt Person who shall become
Beneficial Owner of 40% or more of the shares of Common Stock then
outstanding shall become an Acquiring Person; provided, however, that in
no event shall any Exempt Person become an Acquiring Person solely as a
result of a reduction of the number of shares of Common Stock outstanding,
including repurchases of outstanding shares of Common Stock by the
Company, which reduction increases the percentage of outstanding shares of
Common Stock beneficially owned by such Exempt Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) "Approval of" or "approved by" the Company shall mean the
affirmative vote of a majority of a quorum of the Board of Directors.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right or obligation to acquire (whether such
right or obligation is exercisable or effective immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing and other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) or upon
the exercise of conversion rights, exchange rights, rights (other
than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for payment
or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this clause (B) if
the agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing
and other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering
of securities), or with which such Person or any of such Person's
Affiliates have otherwise formed a group, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this paragraph (d))
or disposing of any securities of the Company.
<PAGE>
(e) "Board of Directors of the Company," "Board of Directors" or
"Board" shall mean the Board of Directors of the Company as constituted at
the time in question.
(f) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to
close.
(g) "Close of Business" on any given date shall mean 5 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5 P.M., Eastern time, on the next succeeding Business
Day.
(h) "Common Stock" shall mean the Common Stock, $0.01 par value per
share, of the Company, except that "Common Stock" when used with reference
to stock issued by any Person other than the Company shall mean the
capital stock with the greatest Voting Power (as such term is hereinafter
defined), or the equity securities or other equity interest having power
to control or direct the management, of such Person or, if such Person is
a subsidiary of another Person, of the Person which ultimately controls
such first-mentioned Person and which has issued and outstanding such
capital stock, equity securities or equity interests.
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, association, trust
or other entity.
(j) "Preferred Stock" shall mean the Series A Participating Preferred
Stock, $0.01 par value per share, of the Company.
(k) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(l) A "subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the Voting Power of the voting equity
securities or voting interests is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(m) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding and generally entitled to vote for the
election of directors of the Company.
2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable, upon ten (10) days' prior
written notice to the Rights Agent. In the event the Company appoints one
or more Co-Rights Agents, the respective duties of the Rights Agents and
any Co-Rights Agents shall be as the Company shall determine. The Rights
Agent shall have no duty to supervise, and in no event shall be liable
for, the acts or omissions of any such Co-Rights Agent.
3. Issue of Rights Certificates.
(a) Until the earlier of (i) 10 days following the Stock Acquisition
Date or (ii) 10 days following (unless such date is extended by the Board
of Directors) the commencement of (or first public announcement of an
intention to commence) (which intention to commence remains in effect for
five Business Days after such announcement), a tender or exchange offer
without the prior approval of the Company which would result, in the
<PAGE>
absence of approval by the Company, in any Person (other than the Company,
any subsidiary of the Company, or any employee benefit plan of the Company
or any of its subsidiaries, or any entity holding securities of the
Company organized, appointed or established by the Company or any of its
subsidiaries for or pursuant to the terms of any such plan) becoming an
Acquiring Person (including any such date which is on or after the date of
this Agreement and prior to the issuance of the Rights) (the earlier of
such dates being herein referred to as the "Distribution Date"), (x) the
Rights shall be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights (and the right to receive
certificates therefor) shall be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent shall send by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock
as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a certificate for Rights,
in substantially the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right (subject to adjustment as provided in Section 11
hereof) for each share of Common Stock so held. As of and after the
Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
As soon as practicable following the Record Date, the Company shall
send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the Rights shall be
evidenced by such certificates for the Common Stock together with the
Summary of Rights and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates for the
Common Stock outstanding on the Record Date, even without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificate.
(b) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after the Record Date, but prior to the earlier of the Distribution Date
or the Expiration Date (as such term is hereinafter defined), shall be
deemed also to be certificates for Rights, and shall have impressed,
printed, stamped, written or otherwise affixed onto them the following
legend:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Simpson
Manufacturing Co., Inc. and BankBoston, N.A., as Rights Agent, dated
as of July 30, 1999, as it may be amended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
offices of Simpson Manufacturing Co., Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may
be redeemed, may expire, or may be evidenced by separate Certificates
and will no longer be evidenced by this Certificate. Simpson
Manufacturing Co., Inc. will mail to the holder of this Certificate a
copy of the Rights Agreement without charge within five days after
receipt of a written request therefor. Under certain circumstances,
Rights issued to Acquiring Persons (as defined in the Rights
Agreement) or certain related Persons and any subsequent holder of
such Rights may become null and void.
<PAGE>
With respect to such certificates containing the foregoing legend, until
the Distribution Date (or earlier redemption, expiration or termination of
the Rights), the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock represented by
such certificate.
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
Preferred Stock and of assignment and certificates to be printed on the
reverse thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
and the Rights Agent 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 interdealer quotation
system on which the Rights may from time to time be listed or traded, or
to conform to usage. Subject to the provisions of Section 11 and Section
23 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date, and on their face shall entitle the holders thereof
to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth of
a share set forth therein (the "Purchase Price"), but the number of such
shares and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Rights Certificate issued at any
time upon the transfer of any Rights to such an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate, and any Rights Certificate issued pursuant to
Section 6, Section 11 or Section 23 upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this
sentence, shall contain, to the extent the Rights Agent has appropriate
notice, the following legend:
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person. This Rights Certificate and the Rights
represented hereby may become void under the circumstances specified
in Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
5. Countersignature and Registration. The Rights Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, or its Chief Financial Officer, either manually
or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary of
the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either manually
or by facsimile signature, and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the Person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any
Rights Certificates may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights Certificate, shall
<PAGE>
be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any such
Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose at such location or
locations as the secretary of the Company shall agree upon from time to
time with the Rights Agent, all in compliance with the New York Stock
Exchange, Inc., books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Sections 4(b), 7(e), 7(f) and 15 hereof, at
any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of shares of
Preferred Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office of
the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
Subject to the provisions of Sections 4(b), 7(e), 7(f) and 15 hereof,
upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate and 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, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and
if requested by the Company or the Rights Agent, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company shall execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon presentation of the
Rights Certificate, with the appropriate form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office
of the Rights Agent designated for such purpose, together with payment of
the Purchase Price for each one one-thousandth of a share of Preferred
Stock (or such other number of shares or other securities) as to which the
Rights are exercised, at or prior to the earlier of (i) the Close of
Business on July 29, 2009 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof, or (iii)
the time at which the Rights are exchanged as provided in Section 24(c)
hereof (such earliest time being herein referred to as the "Expiration
Date"). Notwithstanding any other provision of this Agreement, any Person
who prior to the Distribution Date becomes a record holder of shares of
Common Stock may exercise all of the rights of a registered holder of a
Rights Certificate with respect to the Rights associated with such shares
<PAGE>
of Common Stock in accordance with and subject to the provisions of this
Agreement, including the provisions of Section 7(e) hereof, as of the date
such Person becomes a record holder of shares of Common Stock.
(b) The Purchase Price for each one one-thousandth share of Preferred
Stock issuable upon exercise of a Right shall initially be $200, but shall
be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares (or other
securities or property) to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall, subject to
Section 21(k), thereupon promptly (i)(A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent) certificates for the number of shares of
Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if
the Company, in its sole discretion, shall have elected to deposit the
shares of Preferred Stock issuable upon exercise of the Rights hereunder
into a depositary, requisition from the depositary agent depositary
receipts representing such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company shall
direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to
be paid in lieu of issuance of fractional shares in accordance with
Section 15, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) when
appropriate, after receipt promptly deliver such cash to or upon the order
of the registered holder of such Rights Certificate. In the event that
the Company is obligated to issue other securities of the Company, and/or
distribute other property pursuant to Section 11(a), the Company shall
make all arrangements necessary so that such other securities and/or
property are available for distribution by the Rights Agent, if and when
appropriate. In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall return such
Rights Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights represented by
such Rights Certificate no longer include the rights provided by Section
11(a)(ii) of the Rights Agreement and if less than all the Rights
represented by such Rights Certificate were so exercised, the Rights Agent
shall indicate on the Rights Certificate the number of Rights represented
thereby which continue to include the rights provided by Section
11(a)(ii).
(d) In case the registered holder of any Rights Certificate shall
exercise (except pursuant to Section 11(a)(ii)) less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to the registered holder of such Rights Certificate or to
his duly authorized assigns, subject to the provisions of Section 15
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if
there occurs any of the events set forth in Section 11(a)(ii) or Section
13(a) then any Rights that are or were on or after the Distribution Date
beneficially owned by an Acquiring Person or any Associate or Affiliate of
an Acquiring Person shall become null and void, without any further
action, and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Right, whether under any provision of this
Agreement or otherwise. Without limiting the foregoing sentence, Rights
held by the following Persons shall be null and void without any further
<PAGE>
action: (i) any direct or indirect transferee of any Rights that are or
were on or after the Distribution Date beneficially owned by an Acquiring
Person or any Associate or Affiliate of an Acquiring Person; (ii) any
direct or indirect transferee of any Rights that were on or before the
Distribution Date beneficially owned by an Acquiring Person or any
Associate or Affiliate of an Acquiring Person if the transferee received
such Rights, directly or indirectly, (A) from an Acquiring Person or any
Associate or Affiliate of an Acquiring Person (x) as a result of a
distribution by such Acquiring Person or any Associate or Affiliate of an
Acquiring Person to holders of its equity securities or similar interests
(including, without limitation, partnership interests) or (y) pursuant to
any continuing agreement, arrangement or understanding with respect to the
Rights or (B) in a transfer (or series of transfers) which the Board of
Directors of the Company determines is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions
of this Section 7(e); and (iii) subsequent transferees of Persons referred
to in the foregoing clauses (i) and (ii) as well as this clause (iii).
The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Rights or any
Rights Certificate or to any other Person as a result of the Company's
failure to make any determination with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the appropriate form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise shall
have been properly completed and duly executed by the registered holder
thereof and the Company and the Rights Agent shall have been provided with
such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company and the Rights Agent shall reasonably request.
8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and
no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Rights Certificates
to the Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
9. Reservation and Availability of Preferred Stock. The Company
covenants and agrees that it shall cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock, or any
authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of an
event specified in Section 11(a)(ii) or Section 13(a), shall so reserve
and keep available a sufficient number of shares of Common Stock (and/or
other securities) which may be required to permit the exercise in full of
the Rights pursuant to this Agreement.
So long as the shares of Preferred Stock (and, after the occurrence
of an event specified in Section 11(a)(ii) or Section 13(a), any other
securities) issuable upon the exercise of the Rights may be listed on any
national securities exchange or national quotation system, the Company
shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares (or other securities) reserved for
such issuance to be listed on such exchange or system upon official notice
of issuance upon such exercise.
<PAGE>
The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that all shares of Preferred Stock and/or
other securities delivered upon exercise of the Rights shall, at the time
of delivery of the certificates for such shares or other securities
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it shall pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights
Certificates or of any certificates for shares of Preferred Stock and/or
other securities upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or in respect of the issuance or delivery of the shares of
Preferred Stock and/or other securities in a name other than that of, the
registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for shares of
Preferred Stock, and/or other securities in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, if required by
law, as soon as practicable following the Distribution Date, a
registration statement under the Securities Act of 1933, as amended (the
"Act"), with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act and the rules and regulations
thereunder) until the Expiration Date (unless and until the Company shall
have received an opinion of counsel to the effect that the maintenance of
such registration statement in effect is no longer necessary). The
Company will also take such action as may be appropriate under the blue
sky laws of the various states.
10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or other securities) is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or other
securities) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
presented and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such presentation
and payment is a date upon which the Preferred Stock (or other securities)
transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred
Stock (or other securities) transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) subdivide the outstanding Preferred Stock, (B) combine
the outstanding Preferred Stock into a smaller number of shares or (C)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
<PAGE>
surviving corporation), except as otherwise provided in this Section 11(a)
and in Section 7(e), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares of capital
stock and other securities which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 24(c) of this Agreement, in the event that
any Person (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any of its subsidiaries or any
entity holding securities of the Company organized, appointed or
established by the Company or any of its subsidiaries for or pursuant to
the terms of any such plan), alone or together with its Affiliates and
Associates, shall become an Acquiring Person, then proper provision shall
be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall, for a period of 90 days after the later of the occurrence
of any such event and the effective date of an appropriate registration
statement pursuant to Section 9, have a right to receive upon exercise of
each Right at the then current Purchase Price in accordance with the terms
of this Agreement, such number of one one-thousandths of a share of
Preferred Stock as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable and (y)
dividing that product by 50% of the current market price per one share of
Common Stock (determined pursuant to Section 11(b)) on the date of the
occurrence of the event set forth in this subparagraph (ii) (such number
of shares being referred to as the "number of Adjustment Shares");
provided, however, that if the transaction that would otherwise give rise
to the foregoing adjustment is also subject to the provisions of Section
13 hereof, then only the provisions of Section 13 hereof shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii); and
provided, further, that such 90-day period shall not be deemed to run
during any period in which the exercise of the Rights or the fulfillment
by the Company or the Rights Agent of its or their obligations under this
Agreement shall be enjoined or otherwise prohibited in full or in part by
any court or other governmental agency or body.
(iii) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Preferred Stock to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable, notwithstanding
any other provision of this Agreement, to the extent necessary and
permitted by applicable law and any agreements in effect on the date
hereof to which it is a party, each Right shall thereafter represent the
right to receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, a number of shares, or
units of shares, of (x) Common Stock (up to the maximum number of shares
of Common Stock which may permissibly be issued using the allocation
procedure specified in the second sentence of Section 11(g)) and (y)
preferred stock (or other equity securities) of the Company, including,
but not limited to, Preferred Stock, equal in the aggregate to the number
of Adjustment Shares where the Board of Directors of the Company shall
have deemed such shares or units, other than the shares of Common Stock,
to have at least the same economic value and voting rights as the Common
Stock (a "common stock equivalent") (one one-thousandth of a share of
Preferred Stock shall be deemed to be a common stock equivalent);
provided, however, if there are unavailable sufficient shares (or
fractions of shares) of Common Stock and/or common stock equivalents, then
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or common stock equivalents for issuance
upon exercise of the Rights, including the calling of a meeting of
<PAGE>
stockholders; and provided, further, that the Company shall issue no
common stock equivalent upon exercise of the Rights (except for Preferred
Stock) until the Company has first issued all authorized and unreserved
shares of Common Stock; and provided, further, that if the Company is
unable to cause sufficient shares of Common Stock and/or common stock
equivalents to be available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the right to receive
the Adjusted Number of Common Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined). As used herein,
the term "Adjusted Number of Common Shares" shall be equal to that number
of shares (or fractions of shares) of Common Stock (and/or shares or units
of common stock equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number
of shares of Common Stock (and/or shares or units of common stock
equivalents) available for issuance upon exercise of the Rights and the
denominator of which is the aggregate number of Adjustment Shares
otherwise issuable upon exercise in full of all Rights (assuming there
were sufficient shares of Common Stock available) (such fraction being
referred to as the "Proration Factor"). The Adjusted Purchase Price shall
mean the product of the Purchase Price and the Proration Factor. The
Board of Directors may, but shall not be required to, establish procedures
to allocate the right to receive Common Stock and common stock equivalents
upon exercise of the Rights among holders of Rights.
(b)(i) For the purpose of any computation hereunder, other than in
Section 11(a)(iii), the "current market price" per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to but not including
such date; provided, however, that in the event that the current per share
market price of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock
or securities convertible into shares of such Common Stock or (B) any
subdivision, combination or reclassification of such Common Stock, and
prior to the expiration of 30 Trading Days (as hereinafter defined) after
but not including 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 market price" shall be properly
adjusted to take into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the Nasdaq
Bulletin Board or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date as
determined reasonably and with good faith by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, "current market price" per share shall
mean the fair value per share determined reasonably and with good faith to
the holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
<PAGE>
(ii) For the purpose of any computation hereunder, the "current
market price" per share (or one one-thousandth of a share) of Preferred
Stock shall be determined in the same manner as set forth above for the
Common Stock in Section 11(b) (other than the last sentence thereof). If
the current market price per share (or one one-thousandth of a share) of
Preferred Stock cannot be determined in the manner provided above or if
the Preferred Stock is not publicly held or listed or traded in a manner
described in Section 11(b)(i), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalization with respect to the
Common Stock occurring after the date of this Agreement) multiplied by the
current market price per share of the Common Stock and the "current market
price" per one one-thousandth of a share of Preferred Stock shall be equal
to the current market price per share of the Common Stock (as
appropriately adjusted). If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, "current market price" per
share shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(c) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(c) are
not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest thousandth of a share of
Common Stock or other share or the nearest one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence
of this Section 11(c), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(d) If as a result of any provision of Section 11(a), the holder of
any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
shares contained in Section 11(a), and the provisions of Sections 7, 9,
10, 13 and 15 hereof with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(e) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Preferred Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(f) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued hereunder.
(g) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of
Preferred Stock, Common Stock or other securities issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred
Stock, Common Stock or other securities at such adjusted Purchase Price.
If upon any exercise of the Rights, a holder is to receive a combination
of Preferred Stock, Common Stock and/or common stock equivalents, a
<PAGE>
portion of the consideration paid upon such exercise, equal to at least
the then par value of a share of Preferred Stock and/or Common Stock of
the Company, shall be allocated as the payment for each share of Preferred
Stock or Common Stock of the Company so received, as the case may be.
(h) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer (with prompt notice
thereof to the Rights Agent) until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the
shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(i) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such stockholders.
(j) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this
Agreement and prior to the Distribution Date, (i) declare a dividend on
the outstanding shares of Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of
its capital stock in a reclassification of the outstanding Common Stock,
then in any such case, (1) each Common Share (or shares of capital stock
issued in such reclassification of the Common Shares) outstanding
immediately following such time shall have associated with it the number
of Rights as were associated with one Common Share immediately prior to
the occurrence of the event described in clauses (i)-(iv) above; (2) the
Purchase Price in effect at the time of the record date for such dividend
or the effective date of such subdivision, combination or reclassification
shall be determined by multiplying the Purchase Price in effect
immediately prior to such time by a fraction, the numerator of which shall
be the total number of Common Shares outstanding immediately prior to the
event described in clauses (i)-(iv) above, and the denominator of which
shall be the total number of Common Shares outstanding immediately after
such event; 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 of the Company issuable upon exercise
of such Right; and (3) the number of one one-thousandths of a share of
Preferred Stock (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number
of one one-thousandths of a Preferred Share (or shares of such other
capital stock) as were issuable with respect to one Right immediately
prior to such event. Each Common Share that shall become outstanding
after an adjustment has been made pursuant to this Section 11(j) shall
have associated with it the number of Rights, exercisable at the Purchase
Price and for the number of one one-thousandths of a Preferred Share (or
shares of such other capital stock) as one Common Share has associated
with it immediately following the adjustment made pursuant to this Section
11(j). If an event occurs which would require an adjustment under both
this Section 11(j) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(j) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
<PAGE>
(k) The exercise of Rights under Section 11(a)(ii) shall only result
in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under
this Rights Agreement, including the rights represented by Section 13.
12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts and computations accounting
for such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Rights Certificate in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of
any adjustment unless and until it shall have received such certificate.
Notwithstanding the foregoing provisions of this Section 12, the failure
of the Company to make such certification or give such notice shall not
affect the validity of or the force or effect of the requirement for such
adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and
into, any other Person, (y) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing
or surviving corporation of such merger (other than in the case of either
transaction described in (x) or (y), a merger or consolidation which would
result in all of the Voting Power represented by the securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into securities of
the surviving entity) all of the Voting Power represented by the
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such securities not
having changed as a result of such merger or consolidation), or (z) the
Company shall sell, mortgage or otherwise transfer (or one or more of its
subsidiaries shall sell, mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its subsidiaries (taken as a
whole) to any other Person, then, and in each such case, proper provision
shall be made so that (i) following the Distribution Date, each holder of
a Right, except as provided in Section 7(e) hereof, shall have the right
to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of shares of
freely tradable Common Stock of the Principal Party (as hereinafter
defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price by the number
of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii) hereof) and (y) dividing that product
by 50% of the current market price per share of the Common Stock of such
Principal Party (determined pursuant to Section 11(b) hereof) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11
hereof shall apply to such Principal Party; and (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section
9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights.
<PAGE>
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of the
first sentence of this Section 13, the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are
so issued, the Person that is the other party to the merger or
consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving
the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect subsidiary or Affiliate of another
Person, "Principal Party" shall refer to such other Person; (2) in case
such Person is a subsidiary, directly or indirectly, or Affiliate of more
than one Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest aggregate
market value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
(1) and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of
both or all of such joint ventures and the Principal Parties in each such
chain shall bear the obligations set forth in this Section 13 in the same
ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
each Principal Party and each other Person who may become a Principal
Party as a result of such consolidation, merger, sale or transfer shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the
date of any consolidation, merger, sale or transfer of assets mentioned in
paragraph (a) of this Section 13, the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the Expiration
Date;
(ii) use its best efforts to (x) qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate and (y) cause the Rights and the securities purchasable
upon exercise of the Rights to be listed on any national securities
exchange or national quotation system upon which its Common Stock is
listed, traded or quoted; and
<PAGE>
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all material respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The rights under
this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise
thereunder.
14. Additional Covenants.
(a) The Company covenants and agrees that after the Stock Acquisition
Date, it shall not (i) consolidate with, (ii) merge with or into, or (iii)
sell or transfer to, in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its subsidiaries taken as a whole, any other Person if at the time of
or after such consolidation, merger or sale there are any charter or by-
law provisions or any rights, warrants or other instruments outstanding or
any other action taken which would diminish or otherwise eliminate the
benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, merger or sale unless prior thereto the
Company and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 24 hereof,
take any action the purpose or effect of which is to diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(j), or to
distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes of this
Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price of the Rights for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq Stock Market or such other system then
in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by
the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined reasonably and with good faith to the holders of
Rights by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
<PAGE>
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such agreement
shall provide that the holders of such depositary receipts shall have all
the rights, privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of Preferred
Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one one-thousandth of a share of Preferred Stock. For purposes of this
Section 15(b), the current market value of one one-thousandth of a share
of Preferred Stock shall be one one-thousandth of the closing price of a
share of Preferred Stock (as determined pursuant to Section 11(b)(ii)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 or Section 13 giving rise to the right to receive
common stock equivalents (other than Preferred Stock) or other securities
upon the exercise of a Right, the Company shall not be required to issue
fractions of shares or units of such common stock equivalents or other
securities upon exercise of the Rights or to distribute certificates which
evidence fractional shares of such common stock equivalents or other
securities. In lieu of fractional shares or units of such common stock
equivalents or other securities, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the
current market value of a share or unit of such common stock equivalent or
other securities. For purposes of this Section 15(c), the current market
value shall be determined in the manner set forth in Section 11(b) hereof
for the Trading Day immediately prior to the date of such exercise and, if
such common stock equivalent is not traded, each such common stock
equivalent shall have the value of one one-thousandth of a share of
Preferred Stock.
(d) Except as otherwise expressly provided herein, the holder of a
Right by the acceptance of the Rights expressly waives such holder's right
to receive any fractional Rights or any fractional shares (other than, in
the case of Preferred Stock, fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of a Right.
16. Rights of Action. All rights of action in respect of this
Agreement, except those rights of action vested in the Rights Agent
pursuant to Section 21, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement.
<PAGE>
Holders of Rights shall be entitled to recover from the Company the
reasonable costs and expenses, including attorneys' fees, incurred by them
in any action to enforce the provisions of this Agreement.
17. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
18. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of
Preferred Stock, Common Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate
be construed to confer upon the holder of any Rights Certificate, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions thereof.
19. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the preparation, execution, delivery and
amendment of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, damages, including
consequential and special damages, judgment, fine, penalty, claim,
settlement, cost or expense, incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent, for any action
taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly.
The Rights Agent shall be authorized and protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its acceptance and administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
<PAGE>
20. Merger or Consolidation or Change of Name of Rights Agent. Any
Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any Person succeeding to the stockholder
services business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name
of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
21. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
shall be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct; provided, however, that the
Rights Agent shall not be liable in excess of the greater of its insurance
proceeds plus deductible or ten million dollars.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except as to the fact that it has countersigned the
<PAGE>
Rights Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not have any liability for nor be under
any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11
or 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate pursuant
to Section 12 describing any such adjustment); nor shall it be responsible
for any determination by the Board of Directors of the Company of the
current market value of the Rights or Preferred Stock or Common Stock
pursuant to the provisions of Section 15 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or other
securities will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman
of the Board, the Chief Executive Officer, the Chief Financial Officer,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken, suffered or omitted to be taken by it in good
faith in accordance with instructions of any such officer. Any application
by the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect to its duties or
obligations under this Rights Agreement and the date on and/or after which
such action shall be taken or omitted and the Rights Agent shall not be
liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein
(which date shall not be less than three Business Days after the date any
such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking or omitting any such action, the Rights Agent has received written
instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, director, affiliate,
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 the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other 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 shall not be
answerable or accountable for any act, omission, default, neglect or
<PAGE>
misconduct of any such attorneys or agents or for any loss to the Company
or to the holders of the Rights resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the Certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without first
consulting with the Company.
22. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified
mail, and to holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit such holder's Rights Certificate for inspection by the
Company), then the registered holder of any Rights Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a Person organized and doing business under the
laws of the United States or of the State of California or of the State of
New York (or of any other state of the United States so long as such
corporation is authorized to do business in the State of California or the
State of New York), in good standing, having an office in the State of
California or the State of New York, which is authorized under such laws
to exercise corporate trust or stockholder services powers and is subject
to supervision or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a Person described
in clause (a) of this sentence. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 22, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
23. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
<PAGE>
adjustment or change in the Purchase Price per share and the number or
kind or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or otherwise under any employee plan or
arrangement, which plan or arrangement is existing as of the Distribution
Date, or upon the exercise, conversion or exchange of any other securities
issued by the Company on or prior to the Distribution Date, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificates shall be issued
if, and to the extent that, the Company shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificates
would be issued, and (ii) no such Rights Certificates shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
24. Redemption, Termination and Exchange.
(a)(i) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (x) the Distribution Date or (y) 5 P.M.,
San Francisco time, on the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
(ii) In addition, following the occurrence of the Distribution Date
but prior to any Stock Acquisition Date, the Board of Directors of the
Company may redeem all but not less than all of the then outstanding
Rights at the Redemption Price either (x) in connection with any
transaction not involving any Person or group of Affiliated or Associated
Persons that caused the Distribution Date to occur or any other Person in
which such Person or any constituent of such group has an interest or on
whose behalf such Person is acting directly or indirectly, or (y) in
connection with a tender or exchange offer for any and all outstanding
shares of Common Stock at a price and on terms determined, prior to the
date of the first acceptance of payment for any of such shares, by at
least a majority of the members of the Board of Directors to be both
adequate and otherwise in the best interests of the Company and its
stockholders.
(iii) In addition, following the occurrence of a Stock Acquisition
Date but prior to any event described in Section 13(a), the Board of
Directors of the Company may redeem all but not less than all of the then
outstanding Rights at the Redemption Price either (x) in connection with
any event specified in Section 13(a) in which all holders of Common Stock
are treated alike and not involving (other than as a holder of Common
Stock being treated like all other such holders) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any other Person in which
such Acquiring Person, Affiliate or such Associate has any interest, or
any other Person acting directly or indirectly on behalf of or in
association with any such Acquiring Person, Affiliate or Associate, or (y)
in connection with a tender offer for all outstanding shares of Common
Stock at a price and on terms determined by the Board of Directors to be
both adequate and in the best interest of the Company if and for as long
as the Acquiring Person is not then the Beneficial Owner of securities
representing 15% or more of the Voting Power, and at the time of
redemption there are no other Persons who are Acquiring Persons and
following the occurrence of an event set forth in, and the expiration of
any period during which the holder of Rights may exercise the rights
under, Section 11(a)(ii).
(b) In the case of a redemption permitted under Section 24(a)(i),
immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been
<PAGE>
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. In the case of a redemption permitted under Section 24(a)(ii) or
(iii), evidence of which shall have been filed with the Rights Agent, the
right to exercise the Rights will terminate and represent only the right
to receive the Redemption Price only after 10 Business Days following the
giving of notice of such redemption to the holders of such Rights if no
event set forth in Section 11(a)(ii) shall have occurred, and, if such
event shall have occurred, upon the later of 10 Business Days following
the giving of such notice or the expiration of any period during which the
rights under Section 11(a)(ii) may be exercised. Within 10 days after the
action of the Board of Directors ordering any such redemption of the
Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment
of the Redemption Price will be made.
In the case of a redemption permitted under this Section 24(a), the
Company may, at its option, discharge all of its obligations with respect
to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights and (ii) mailing payment of the Redemption Price
to the registered holders of the Rights at their last addresses as they
appear on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent of the
Common Stock, and upon such action, all outstanding Rights Certificates
shall be null and void without any further action by the Company.
(c)(i) Subject to the limitations of applicable law, the Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, redeem all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become
void pursuant to the provisions of Section 7(e)) hereof) by exchanging for
such Rights shares of Common Stock or common stock equivalent at an
exchange ratio of one share of Common Stock or common stock equivalent per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than
the Company, any subsidiary of the Company, any employee benefit plan of
the company or any such subsidiary, or any entity holding Common Stock for
or pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock then outstanding.
(ii) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(c)(i)
and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common
Stock or common stock equivalent equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
<PAGE>
effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(iii) In any exchange pursuant to this Section 24(c), the Company, at
its option, may substitute shares of Preferred Stock or shares having the
same or more favorable rights, privileges and preferences as the Preferred
Stock ("equivalent preferred stock") for Common Stock exchangeable for
Rights, at the initial rate of one one-thousandth of a share of Preferred
Stock (or equivalent preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
shares of Preferred Stock pursuant to the terms thereof, so that the
fraction of a Preferred Share delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.
(iv) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24(c), the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or Preferred
Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this Section 24(d), the current market value of a whole share
of Common Stock shall be the current market price of a share of Common
Stock (as determined pursuant to Section 11(b) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24(d).
25. Notice of Certain Events. In case the Company shall propose (a)
to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company) or (b) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of
any class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries
to effect any sale or other transfer), in one or more transactions, of
more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right and the Rights
Agent, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least 20 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or 13(a) of
this Agreement shall occur, then, in any such case, the Company or the
Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
<PAGE>
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or 13(a) hereof, as the case may be.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Simpson Manufacturing Co., Inc.
4637 Chabot Drive, Suite 200
P.O. Box 10789
Pleasanton, CA 94588-0789
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
BankBoston, N.A..
c/o EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
27. Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without approval of
any holders of Rights or Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein,
(iii) prior to the Distribution Date, to change or supplement the
provisions hereunder which the Company may deem necessary or desirable or
(iv) on or following the Distribution Date, to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Rights Certificates. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such supplement or
amendment would adversely affect its interests under this Agreement.
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common
Stock.
28. Determination and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
<PAGE>
Stock or any other securities of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board,
or the Company, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made
by the Board in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights Certificates and
all other parties, and (y) not subject the Board to any liability to the
holders of the Rights Certificates.
29. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
30. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
the Common Stock).
31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and to be performed entirely within such state.
33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
<PAGE>
34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: SIMPSON MANUFACTURING CO., INC.
By: /s/ Jeff Mackenzie By: /s/ Stephen B. Lamson
------------------------- -------------------------
Title: Financial Reporting Manager Title: CFO
Attest: BANKBOSTON, N.A., as Rights Agent
By: By: /s/ B. Puschendorf
------------------------- -------------------------
Title: Title: Sr. Account Manager
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A PARTICIPATING PREFERRED STOCK
OF
SIMPSON MANUFACTURING CO., INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Stephen B. Lamson, Chief Financial Officer, Secretary and
Treasurer of Simpson Manufacturing Co., Inc. (the "Corporation"), a
corporation organized and existing under the laws of the State of
Delaware, DO HEREBY CERTIFY:
1. That no shares of the Series A Participating Preferred Stock of
the Corporation have been issued.
2. That, pursuant to the authority conferred on the Board of
Directors by the Certificate of Incorporation of the Corporation, the
Board of Directors on July 29, 1999 adopted the following resolutions
which set forth the terms of a series of preferred stock designated as
Series A Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by Article IV of the Certificate of
Incorporation, a series of preferred stock is hereby designated as "Series
A Participating Preferred Stock" of the Corporation and that the
designation and amount thereof and the relative powers, rights,
preferences and limitations of the shares of such series are as follows:
(a) Designation and Amount. The shares of the series of
Preferred Stock shall be designated as "Series A Participating
Preferred Stock," par value $.01 per share, and the number of shares
constituting such series shall be one million (1,000,000). Such
number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Participating Preferred Stock to a
number less than that of the shares then outstanding plus the number
of shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation.
(b) Dividends and Distributions.
(i) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Participating Preferred Stock
with respect to dividends or distributions (except as provided in
paragraph (f) below), the holders of shares of Series A
Participating Preferred Stock, in preference to the holders of
shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation and any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
<PAGE>
Directors out of funds legally available for the purpose, in an
amount per share (rounded to the nearest cent) equal to the
greater of (x) $25.00 or (y) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (except as provided in paragraph
(f) below) other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock,
since the first issuance of any share or fraction of a share of
Series A Participating Preferred Stock. In the event the
Corporation shall at any time after the first issuance of any
share or fraction of a share of Series A Participating Preferred
Stock (A) declare any dividend on Common Stock payable in shares
of Common Stock, (B) subdivide the outstanding Common Stock, or
(C) combine the outstanding Common Stock into a smaller number of
shares, by reclassification or otherwise, then in each such case
the amount to which holders of shares of Series A Participating
Preferred Stock were entitled immediately prior to such event
under 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.
(ii) Other than with respect to a dividend on the Common
Stock payable in shares of Common Stock, the Corporation shall
declare a dividend or distribution on the Series A Participating
Preferred Stock as provided in subparagraph (i) above at the same
time as it declares a dividend or distribution on the Common
Stock. The date or dates set for the payment of such dividend or
distribution on the Series A Participating Preferred Stock and
the record date or dates for the determination of entitlement to
such dividend or distribution shall be the same date or dates as
are set for the dividend or distribution on the Common Stock. On
any such payment date, no dividend or distribution shall be paid
on the Common Stock until the appropriate payment has been made
on the Series A Participating Preferred Stock.
(c) Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
<PAGE>
the event the Corporation shall at any time after the first
issuance of any share or fraction of a share of Series A
Participating Preferred Stock (A) declare any dividend on Common
Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock into a greater number of shares, or (C)
combine the outstanding Common Stock into a smaller number of
shares, by reclassification or otherwise, then in each such case
the number of votes per share to which holders of shares of
Series A Participating Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the
holders of shares of Series A Participating Preferred Stock and
the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(iii) (A) If at any time dividends on any Series A
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred
Stock (including holders of the Series A Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Directors.
(B) During any default period, such voting right of the
holders of Series A Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (C) of this Section 7(c)(iii) or at any annual
meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock,
if any, to increase, in certain cases, the authorized number
of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The
<PAGE>
absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies,
if any, in the Board of Directors as may then exist up to two
(2) Directors, or if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may
be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of
Directors as shall be necessary to permit the election by
them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased
or decreased except by vote of the holders of Preferred Stock
as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A
Participating Preferred Stock.
(C) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate
not less than ten percent (10%) of the total number of shares
of Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by
the Chairman of the Board or the Secretary of the
Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to
vote pursuant to this subparagraph (c)(iii)(C) shall be given
to each holder of record of Preferred Stock by mailing a copy
of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than
60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions
of this subparagraph (c)(iii)(C), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
<PAGE>
(D) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation, if applicable,
shall continue to be entitled to elect the whole number of
Directors until the holders of Preferred Stock shall have
exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may (except as
provided in subparagraph (c)(iii)(B) of this Section 7) be
filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become
vacant. References in this paragraph (iii) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(E) Immediately upon the expiration of a default period
(x) the right of the holders of Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such
number as may be provided for in, or pursuant to, the
Certificate of Incorporation or Bylaws irrespective of any
increase made pursuant to the provisions of subparagraph
(c)(iii)(B) of this Section 7 (such number being subject,
however, to change thereafter in any manner provided by law
or in the Certificate of Incorporation or Bylaws). Any
vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors, even
though less than a quorum.
(iv) Except as set forth herein, holders of Series A
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote on matters submitted to the
stockholders of the Corporation as set forth herein) for taking
any corporate action.
(d) Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred
Stock as provided in Subsection (b) are in arrears, thereafter
and until all accrued and unpaid dividends and distributions,
<PAGE>
whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(A) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Participating Preferred Stock;
(B) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock
except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Participating Preferred Stock provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Participating Preferred Stock; or
(D) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock or any
shares of stock ranking on a parity with the Series A
Participating Preferred Stock except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series
or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under subparagraph (i) of this Subsection (d), purchase or
otherwise acquire such shares at such time and in such manner.
(e) Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after
<PAGE>
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth
herein.
(f) Liquidation, Dissolution or Winding Up.
(i) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Participating
Preferred Stock shall have received per share, the greater of
$1,000.00 or 1,000 times the payment made per share of Common
Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series A Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (A) the Series A
Liquidation Preference by (B) 1,000 (as appropriately adjusted as
set forth in subparagraph (iii) below to reflect such events as
stock splits, stock dividends and recapitalization with respect
to the Common Stock) (such number in clause (B), the "Adjustment
Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Participating Preferred Stock
and Common Stock, respectively, holders of Series A Participating
Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(ii) In the event there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A
Participating Preferred Stock then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the
event there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(iii) In the event the Corporation shall at any time after
the first issuance of any share or fraction of a share of Series
A Participating Preferred Stock (A) declare any dividend on
<PAGE>
Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock, or (C) combine the outstanding Common
Stock into a smaller number of shares, by reclassification or
otherwise, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(g) Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Participating
Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the first issuance of any share or fraction
of a share of Series A Participating Preferred Stock (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding
immediately prior to such event.
(h) Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.
(i) Ranking. The Series A Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless
the terms of any such series shall provide otherwise.
(j) Amendment. The Certificate of Incorporation and the Bylaws
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights
of the Series A Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Series A Participating Preferred Stock
voting separately as a class.
(k) Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Participating
Preferred Stock.
And be it further
RESOLVED, that any Officer of the Corporation be, and each of them
hereby is, authorized to execute a Certificate of Designation with respect
to the Series A Participating Preferred Stock pursuant to section 151 of
the General Corporation Law of the State of Delaware and to take all
appropriate action to cause such Certificate to become effective,
including, but not limited to, the filing of such Certificate with the
Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this
____ day of ________________, 1999.
_____________________________
Stephen B. Lamson
Chief Financial Officer
Secretary and Treasurer
EXHIBIT B
---------
[Form of Rights Certificate]
Certificate No. R-____________ __________________________ Rights
NOT EXERCISABLE AFTER JULY 29, 2009 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE
WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID UNDER THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Rights Certificate
SIMPSON MANUFACTURING CO., 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 July 30, 1999 (the "Rights
Agreement") between Simpson Manufacturing Co., Inc., a Delaware
corporation (the "Company"), and BankBoston, N.A., a national banking
association (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5 P.M. (San Francisco time) on July 29, 2009, at
the office of the Rights Agent designated for such purpose, one one-
thousandth of a fully paid, nonassessable share of Series A Participating
Preferred Stock (the "Preferred Stock") of the Company, at a purchase
price of $200 per one one-thousandth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase and Certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and the number
of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price
as of the close of business on the record date relating to the initial
distribution of the Rights, based on the Preferred Stock as constituted at
such date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
______________________________
* The portion of the legent in brackets shall be inserted only if
applicable.
<PAGE>
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates. Copies of the Rights Agreement are on file at
the principal office of the Company and are also available upon written
request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised (other than pursuant to Section 11(a)(ii)
of the Rights Agreement) in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. If this Rights Certificate
shall be exercised in whole or in part pursuant to Section 11(a)(ii) of
the Rights Agreement, the holder shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has occurred as set
forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right. Subject to the provisions of the
Rights Agreement, the Company, at its option, may elect to mail payment of
the redemption price to the registered holder of the Right at the time of
redemption, in which event this Rights Certificate may become void without
any further action by the Company.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
shares of Preferred Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
<PAGE>
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Attest: SIMPSON MANUFACTURING CO., INC.
By: By:
------------------------- -------------------------
Title: Title:
Countersigned:
BANKBOSTON, N.A., as Rights Agent
By:
-------------------------
Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers
unto _____________________________________________________________________
__________________________________________________________________________
(please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_______________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ___________, ____.
_____________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, ____.
_____________________________
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To Simpson Manufacturing Co., Inc.:
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Rights Certificate to purchase the shares of Preferred
Stock (or such other securities of the Company) issuable upon the exercise
of the Rights and requests that certificates for such shares be issued in
the name of:
________________________________________________________________________
(Please insert social security or other identifying number)
________________________________________________________________________
(Please print name and address)
________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests
that the Rights Certificate be registered in the name of and delivered to:
________________________________________________________________________
Please insert social security or other identifying number (complete only
if Rights Certificate is to be registered in a name other than the
undersigned)
________________________________________________________________________
(Please print name and address)
________________________________________________________________________
Dated: ____________, ____.
_____________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(3) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ____________, ____.
_____________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To Simpson Manufacturing Co., Inc.:
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Rights Certificate to purchase the shares of Preferred
Stock (or such other securities of the Company or any other Person)
issuable upon the exercise of the Rights and requests that certificates
for such shares be issued in the name of:
________________________________________________________________________
(Please insert social security or other identifying number)
________________________________________________________________________
(Please print name and address)
________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests
that the Rights Certificate be registered in the name of and delivered to:
________________________________________________________________________
(Please insert social security or other identifying number)
(complete only if Rights Certificate is to be registered in a name other
than the undersigned)
________________________________________________________________________
(Please print name and address)
________________________________________________________________________
Dated: ____________, ____.
_____________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ____________, ____.
_____________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must correspond
to the name as written upon the fact of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT C
---------
SUMMARY OF RIGHTS
As a precaution to ensure that it continues to be able to take appropriate
action to protect the interests of Simpson Manufacturing Co., Inc. (the
"Company") and its stockholders, the Company's Board of Directors has
adopted a Stockholder Rights Plan. The Stockholder Rights Plan would help
the Board to maximize stockholder value in the event of a change of
control of the Company, and otherwise to resist actions that the Board
considers likely to injure the Company or its stockholders.
Integral to the plan is a Rights dividend payable on shares of the
Company's Common Stock. On July 29, 1999, the Board of Directors declared
a dividend distribution on each outstanding share of Common Stock of one
Right to purchase the Company's Series A Participating Preferred Stock.
The dividend was paid to stockholders of record at the close of business
on August 19, 1999. No income was recognized by stockholders for tax
purposes on payment of the dividend. The Rights are not now exercisable,
and it is not known at this time whether they ever will be exercisable.
No action can be taken by holders of Rights at this time. The Rights will
expire on the earlier of (1) July 29, 2009, or (2) redemption or exchange
of the Rights as described below.
In general, until the Rights are exercisable or are redeemed or exchanged
or expire unexercised, each Right is associated with and cannot be
separated from the underlying share of Common Stock on which the right was
declared as a dividend. Accordingly, until the Rights are separate from
the Common Stock, (1) each holder of outstanding shares of Common Stock is
also the holder of an equal number of Rights, (2) any sale or other
transfer of shares of Common Stock by a holder thereof also will cause a
transfer of the associated Rights, (3) no income or loss will be
recognized with respect to the sale of Rights incident to a sale of Common
Stock, and (4) no certificates will be issued to evidence ownership of the
Rights, but certificates for shares of Common Stock issued after the
Record Date will refer to the associated Rights. Until a Right is
exercised, it confers no rights as a stockholder, including, without
limitation, the right to vote or to receive dividends.
The Rights will separate from the Common Stock if there is a "Distribution
Date." A Distribution Date would occur upon the earliest to happen of (1)
a public announcement that someone has become an "Acquiring Person,"
meaning that such person (including affiliated or associated persons or
entities) has acquired, or obtained the right to acquire, beneficial
ownership of 15 percent or more of the outstanding shares of Common Stock,
other than as a result of repurchases of stock by the Company, or (2) 10
days (unless such date is extended by the Board of Directors) having
elapsed following the commencement of (or a public announcement of an
intention to make) a tender offer or exchange offer that would result in
someone becoming an Acquiring Person. If a Distribution Date occurs, the
Rights will become exercisable and separately tradable, and the Company
will issue certificates for the Rights as soon as possible.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock).
Each share of Preferred Stock will have a preferential quarterly dividend
in an amount equal to 1,000 times the dividend declared on each share of
Common Stock, but in no event less than $25. In the event of liquidation,
the holders of shares of Preferred Stock will receive a preferred
liquidation payment equal to the greater of $1,000 or 1,000 times the
payment made per each share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with
the shares of Common Stock. In the event of any merger, consolidation or
<PAGE>
other transaction in which shares of Common Stock are exchanged, each
share of Preferred Stock will be entitled to receive 1,000 times the
amount and type of consideration received per share of Common Stock. The
rights of the Preferred Stock as to dividends, liquidation and voting, and
in the event of mergers and consolidations, are protected by customary
anti-dilution provisions.
The amount of Preferred Stock that the holder of a Right is entitled to
receive upon exercise of a Right and the Purchase Price payable upon
exercise of a Right are both subject to adjustment. Initially, the
Purchase Price is $200 per Right. If no one has yet become an Acquiring
Person, payment of the Purchase Price entitles the holder of a Right to
receive only one one-thousandth of a share of Preferred Stock. If someone
has become an Acquiring Person, however, payment of the Purchase Price
entitles the holder to receive a number of one one-thousandth shares
having a value, based on the then current market value of the Common
Stock, equal to two times the Purchase Price. In addition, if someone has
become an Acquiring Person, and thereafter the Company is involved in a
merger or other business combination transaction, a holder of a Right also
will be able to acquire, upon payment of the Purchase Price, Common Stock
of the Company or its successor having a value, based on the market value
of the Company or its successor at the time of the transaction, equal to
twice the value of the Purchase Price. Some limitations apply to the
timing of exercise of the Rights, and any Rights belonging to an Acquiring
Person are null and void.
The Board of Directors may redeem the Rights in whole, but not in part, at
the Redemption Price of $0.01 per Right, at any time before there is an
Acquiring Person. After there is an Acquiring Person, the Rights may be
redeemed only in very limited circumstances. However, the Board of
Directors may in some cases also exchange all or part of the then
outstanding and exercisable Rights (except for Rights that have become
void) for shares of Common Stock at a rate of one share of Common Stock
(or substitute consideration) per Right. Upon redemption or exchange, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price or the exchange
consideration, as applicable.
A full description of the Rights is set forth in the Rights Agreement
between Simpson Manufacturing Co., Inc. and the Rights Agent, BankBoston,
N.A. 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 by writing the
Corporate Secretary, Simpson Manufacturing Co., Inc., 4637 Chabot Drive,
Suite 200, P.O. Box 10789, Pleasanton, CA 94588-0789. The Company and the
Rights Agent retain broad authority to amend the Rights Agreement;
however, following any Distribution Date any amendment may not adversely
affect the interests of holders of Rights. THIS SUMMARY DESCRIPTION OF
THE RIGHTS DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT.
EXHIBIT 4.2
-----------
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A PARTICIPATING PREFERRED STOCK
OF
SIMPSON MANUFACTURING CO., INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Stephen B. Lamson, Chief Financial Officer, Secretary and
Treasurer of Simpson Manufacturing Co., Inc. (the "Corporation"), a
corporation organized and existing under the laws of the State of
Delaware, DO HEREBY CERTIFY:
1. That no shares of the Series A Participating Preferred Stock of
the Corporation have been issued.
2. That, pursuant to the authority conferred on the Board of
Directors by the Certificate of Incorporation of the Corporation, the
Board of Directors on July 29, 1999 adopted the following resolutions
which set forth the terms of a series of preferred stock designated as
Series A Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by Article IV of the Certificate of
Incorporation, a series of preferred stock is hereby designated as "Series
A Participating Preferred Stock" of the Corporation and that the
designation and amount thereof and the relative powers, rights,
preferences and limitations of the shares of such series are as follows:
(a) Designation and Amount. The shares of the series of
Preferred Stock shall be designated as "Series A Participating
Preferred Stock," par value $.01 per share, and the number of shares
constituting such series shall be one million (1,000,000). Such
number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Participating Preferred Stock to a
number less than that of the shares then outstanding plus the number
of shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation.
(b) Dividends and Distributions.
(i) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Participating Preferred Stock
with respect to dividends or distributions (except as provided in
paragraph (f) below), the holders of shares of Series A
Participating Preferred Stock, in preference to the holders of
shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation and any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
<PAGE>
Directors out of funds legally available for the purpose, in an
amount per share (rounded to the nearest cent) equal to the
greater of (x) $25.00 or (y) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (except as provided in paragraph
(f) below) other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock,
since the first issuance of any share or fraction of a share of
Series A Participating Preferred Stock. In the event the
Corporation shall at any time after the first issuance of any
share or fraction of a share of Series A Participating Preferred
Stock (A) declare any dividend on Common Stock payable in shares
of Common Stock, (B) subdivide the outstanding Common Stock, or
(C) combine the outstanding Common Stock into a smaller number of
shares, by reclassification or otherwise, then in each such case
the amount to which holders of shares of Series A Participating
Preferred Stock were entitled immediately prior to such event
under 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.
(ii) Other than with respect to a dividend on the Common
Stock payable in shares of Common Stock, the Corporation shall
declare a dividend or distribution on the Series A Participating
Preferred Stock as provided in subparagraph (i) above at the same
time as it declares a dividend or distribution on the Common
Stock. The date or dates set for the payment of such dividend or
distribution on the Series A Participating Preferred Stock and
the record date or dates for the determination of entitlement to
such dividend or distribution shall be the same date or dates as
are set for the dividend or distribution on the Common Stock. On
any such payment date, no dividend or distribution shall be paid
on the Common Stock until the appropriate payment has been made
on the Series A Participating Preferred Stock.
(c) Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
<PAGE>
the event the Corporation shall at any time after the first
issuance of any share or fraction of a share of Series A
Participating Preferred Stock (A) declare any dividend on Common
Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock into a greater number of shares, or (C)
combine the outstanding Common Stock into a smaller number of
shares, by reclassification or otherwise, then in each such case
the number of votes per share to which holders of shares of
Series A Participating Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the
holders of shares of Series A Participating Preferred Stock and
the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(iii) (A) If at any time dividends on any Series A
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred
Stock (including holders of the Series A Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Directors.
(B) During any default period, such voting right of the
holders of Series A Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (C) of this Section 7(c)(iii) or at any annual
meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock,
if any, to increase, in certain cases, the authorized number
of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The
<PAGE>
absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies,
if any, in the Board of Directors as may then exist up to two
(2) Directors, or if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may
be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of
Directors as shall be necessary to permit the election by
them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased
or decreased except by vote of the holders of Preferred Stock
as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A
Participating Preferred Stock.
(C) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate
not less than ten percent (10%) of the total number of shares
of Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by
the Chairman of the Board or the Secretary of the
Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to
vote pursuant to this subparagraph (c)(iii)(C) shall be given
to each holder of record of Preferred Stock by mailing a copy
of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than
60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions
of this subparagraph (c)(iii)(C), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
<PAGE>
(D) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation, if applicable,
shall continue to be entitled to elect the whole number of
Directors until the holders of Preferred Stock shall have
exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may (except as
provided in subparagraph (c)(iii)(B) of this Section 7) be
filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become
vacant. References in this paragraph (iii) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(E) Immediately upon the expiration of a default period
(x) the right of the holders of Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such
number as may be provided for in, or pursuant to, the
Certificate of Incorporation or Bylaws irrespective of any
increase made pursuant to the provisions of subparagraph
(c)(iii)(B) of this Section 7 (such number being subject,
however, to change thereafter in any manner provided by law
or in the Certificate of Incorporation or Bylaws). Any
vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors, even
though less than a quorum.
(iv) Except as set forth herein, holders of Series A
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote on matters submitted to the
stockholders of the Corporation as set forth herein) for taking
any corporate action.
(d) Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred
Stock as provided in Subsection (b) are in arrears, thereafter
and until all accrued and unpaid dividends and distributions,
<PAGE>
whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(A) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Participating Preferred Stock;
(B) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock
except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Participating Preferred Stock provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Participating Preferred Stock; or
(D) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock or any
shares of stock ranking on a parity with the Series A
Participating Preferred Stock except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series
or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under subparagraph (i) of this Subsection (d), purchase or
otherwise acquire such shares at such time and in such manner.
(e) Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after
<PAGE>
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth
herein.
(f) Liquidation, Dissolution or Winding Up.
(i) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Participating
Preferred Stock shall have received per share, the greater of
$1,000.00 or 1,000 times the payment made per share of Common
Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series A Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (A) the Series A
Liquidation Preference by (B) 1,000 (as appropriately adjusted as
set forth in subparagraph (iii) below to reflect such events as
stock splits, stock dividends and recapitalization with respect
to the Common Stock) (such number in clause (B), the "Adjustment
Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Participating Preferred Stock
and Common Stock, respectively, holders of Series A Participating
Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(ii) In the event there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A
Participating Preferred Stock then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the
event there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(iii) In the event the Corporation shall at any time after
the first issuance of any share or fraction of a share of Series
A Participating Preferred Stock (A) declare any dividend on
<PAGE>
Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock, or (C) combine the outstanding Common
Stock into a smaller number of shares, by reclassification or
otherwise, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(g) Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Participating
Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the first issuance of any share or fraction
of a share of Series A Participating Preferred Stock (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding
immediately prior to such event.
(h) Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.
(i) Ranking. The Series A Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless
the terms of any such series shall provide otherwise.
(j) Amendment. The Certificate of Incorporation and the Bylaws
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights
of the Series A Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Series A Participating Preferred Stock
voting separately as a class.
(k) Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Participating
Preferred Stock.
And be it further
RESOLVED, that any Officer of the Corporation be, and each of them
hereby is, authorized to execute a Certificate of Designation with respect
to the Series A Participating Preferred Stock pursuant to section 151 of
the General Corporation Law of the State of Delaware and to take all
appropriate action to cause such Certificate to become effective,
including, but not limited to, the filing of such Certificate with the
Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this
30th day of July, 1999.
/S/Stephen B. Lamson
-----------------------------
Stephen B. Lamson
Chief Financial Officer
Secretary and Treasurer
