FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ALTERNATIVE RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 38-2791069
(State of incorporation or organization) (I.R.S. Employer Identification No.)
75 TRI STATE INTERNATIONAL
SUITE 300
LINCOLNSHIRE, IL 60069
(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
RIGHTS TO PURCHASE SHARES OF JUNIOR
PREFERRED STOCK, SERIES A, PAR VALUE NASDAQ NATIONAL MARKET
$.01 PER SHARE
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box.[X]
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 Registration Statement file number to which this form
relates (if applicable):
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
(Title of class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On 15 October 1998, the Board of Directors of Alternative Resources
Corporation, a Delaware corporation (the "COMPANY") declared a dividend of one
preferred share purchase right (a "RIGHT") for each share of Common Stock, $.01
par value, of the Company (the "COMMON STOCK"). The dividend is payable to
Stockholders of record at the close of business on October 28, 1998 (the "RECORD
DATE") and with respect to all shares of Common Stock that become outstanding
after the Record Date and prior to the earliest of the Separation Date (as
defined below), the redemption of the Rights, the exchange of the Rights and the
expiration of the Rights. Except as set forth below and subject to adjustment
as provided in the Rights Agreement (as defined below), each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
the Company's Junior Preferred Stock, Series A, $0.01 par value per share (the
"PREFERRED STOCK"), at a purchase price of $45 per one one-hundredth of a share
(the "PURCHASE PRICE"). The description and terms of the Rights are set forth
in a Rights Agreement dated as of October 15, 1998 (the "RIGHTS AGREEMENT"),
between the Company and the Harris Trust and Savings Bank, as Rights Agent (the
"RIGHTS AGENT").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (an "ACQUIRING PERSON"), has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding Common Stock
(the "STOCK ACQUISITION DATE") or (ii) 10 days following commencement or
disclosure of an intention to commence a tender offer or exchange offer by a
person other than the Company and certain related entities if, upon consummation
of the offer, the person or group, together with persons affiliated or
associated with it, could acquire beneficial ownership of 40% or more of the
outstanding Common Stock (the earlier of the dates being the "SEPARATION DATE").
Until the Separation Date (or earlier redemption or expiration of the Rights),
the transfer of Common Stock will also constitute transfer of the associated
Rights. Following the Separation Date, separate certificates will evidence the
Rights.
The Rights will first become exercisable on the Separation Date (unless
sooner redeemed). The Rights will expire at the close of business on October
14, 2008 (the "EXPIRATION DATE"), unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price and the number of shares of Preferred Stock or other
securities, cash or other property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights, options, warrants to subscribe for Preferred
Stock or securities convertible into Preferred Stock at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of other securities, cash (excluding regular periodic
cash dividends at an annual rate not in excess of 125% of the annualized rate of
cash dividends paid during the preceding fiscal year), property, evidences of
indebtedness, or assets.
If, following the Separation Date, the Company is acquired in a merger or
other business combination in which the Common Stock does not remain outstanding
or is changed, or an amount of the consolidated assets or earning power of the
Company having a value greater than 40% of the Company's market capitalization
is sold, leased, exchanged, mortgaged, pledged or otherwise transferred or
disposed of (in one transaction or a series of transactions), the Rights will
"FLIP-OVER" and entitle each holder of a Right to purchase, upon the exercise of
the Right at the then-current Purchase Price, that number of shares of common
stock of the acquiring company (or, in certain circumstances, one of its
affiliates) that at the time of the transaction would have a market value of two
times the Purchase Price.
If (i) a person acquires beneficial ownership of 40% or more of the Common
Stock, (ii) the Company is the surviving corporation in a merger with an
Acquiring Person and the Common Stock remains outstanding and unchanged, or
(iii) an Acquiring Person engages in a "self-dealing" transaction described in
the Rights Agreement, the Rights will "FLIP-IN" and entitle each holder of a
Right, except as provided below, to purchase, upon exercise at the then-current
Purchase Price, that number of shares of Common Stock having a market value of
two times the Purchase Price.
Any "flip-over" event or "flip-in" event is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the Separation Date
by an Acquiring Person or an affiliate or associate of an Acquiring Person
(whether or not ownership is subsequently transferred) will become null and void
upon the occurrence of a Triggering Event, and any holder of Rights will have no
right to exercise the Rights.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. Holders will have no right to receive fractional shares of
Preferred Stock (other than fractions that are integral multiples of one one-
hundredth of a share of Preferred Stock) upon the exercise of Rights. In lieu
of fractional shares, an adjustment in cash may be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
The number of outstanding Rights and the number of one one-hundredths of a
share of Preferred Stock issuable upon exercise of each Right and the Purchase
Price are also subject to adjustment in the event of a stock split of the Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any case, prior to the Separation Date.
At any time prior to the earlier of (i) the close of business on the 10th
day following the Stock Acquisition Date (with the possibility that the Board of
Directors may extend this time for an additional 10 days) and (ii) the
Expiration Date, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right. Immediately upon the action of the Company's Board
of Directors electing to redeem the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights thereafter will be to
receive the applicable redemption price.
The Company may, at any time after any person becomes an Acquiring Person
and prior to the time any person, together with its affiliates, becomes the
beneficial owner of at least 50% of the Company's outstanding Common Stock,
provided that all necessary regulatory approvals have been obtained, exchange
the Rights (other than Rights owned by the Acquiring Person which became null
and void), in whole or in part, at a ratio of one share of Common Stock per
Right, subject to adjustment.
Until a Right is exercised, the holder has no rights as a Stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
At any time prior to the time that the Company's Board of Directors becomes
aware that an Acquiring Person has become an Acquiring Person, the Company may,
without the approval of any holder of the Rights, supplement or amend any
provision of the Rights Agreement (including the date on which the Distribution
Date will occur), except the Purchase Price, the number of shares of Preferred
Stock, other securities, cash or other property obtainable upon exercise of a
Right, the redemption price or the Expiration Date. Thereafter, the Rights
Agreement may be amended only to cure ambiguities, to correct inconsistent
provisions, or in ways that do not adversely affect the holders of the Rights.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $25.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of Common
Stock, if it is greater. In the event of liquidation, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100.00 per share, but will be entitled to an aggregate payment of 100 times
the payment made per share of Common Stock, if it is greater. In the event of
any merger or other business combination in which Common Stock is exchanged,
each share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. Customary anti-dilution provisions protect
the Rights.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-hundredth of a share of Preferred Stock
purchasable upon exercise of each Right is intended to approximate the value of
one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned upon a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors prior to 10 days after the Stock Acquisition
Date, because until that time, the Rights may be redeemed by the Company at $.01
per Right.
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
attached as an exhibit to this Form 8-A.
ITEM 2. EXHIBITS
4. Rights Agreement, dated 15 October 1998 between the Company and the
Harris Trust and Savings Bank (including exhibits thereto).
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: October 20, 1998
By: /s/ Steven Purcell
Name: Steven Purcell
Title: Chief Financial Officer
ALTERNATIVE RESOURCES CORPORATION
and
HARRIS TRUST AND SAVINGS BANK,
Rights Agent
Rights Agreement
Dated as of 15 October, 1998
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 5
3. Issue of Rights Certificates 5
4. Form of Rights Certificates 6
5. Countersignature and Registration 7
6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates 7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights8
8. Cancellation and Destruction of Rights Certificates 10
9. Reservation and Availability of Preferred Stock 10
10. Preferred Stock Record Date 11
11. The Flip-In 11
12. The Flip-Over 13
13. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 16
14. Fractional Rights and Fractional Shares 20
15. Rights of Action 20
16. Agreement of Rights Holders 21
17. Rights Holder Not Deemed a Stockholder 21
18. Concerning the Rights Agent 22
19. Merger or Consolidation or Change of Name of Rights Agent 22
20. Duties of Rights Agent 23
21. Change of Rights Agent 24
22. Issuance of New Rights Certificates 25
23. Redemption and Termination 25
24. Exchange 26
25. Notice of Certain Events 27
26. Notices 28
27. Supplements and Amendments 28
28. Successors 29
29. Benefits of this Agreement 29
30. Severability 29
31. Governing Law 29
32. Counterparts 29
33. Descriptive Headings 29
EXHIBITS
EXHIBIT A -- Form of Certificate of Designations of Preferred Stock
EXHIBIT B -- Forms of Rights Certificates
EXHIBIT C -- Form of Summary of Rights to Purchase Preferred Stock
RIGHTS AGREEMENT
Rights Agreement, dated as of October 15, 1998 (the "Agreement"),
between ALTERNATIVE RESOURCES CORPORATION, a Delaware, U.S.A. corporation (the
"COMPANY"), and HARRIS TRUST AND SAVINGS BANK, (the "RIGHTS AGENT").
W I T N E S S E T H:
WHEREAS, on October 15, 1998, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each outstanding share of common stock, par value $0.01 per share,
of the Company (the "COMMON STOCK") outstanding on October 28, 1998 (the "RECORD
DATE"), and the issue of one Right for each share of Common Stock of the Company
issued between the Record Date and the Separation Date (as hereinafter defined),
each Right representing the right to purchase one one-hundredth of a share of
Series A Junior Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designations of Preferred
Stock attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "RIGHTS");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as that term is
hereinafter defined) who or which, together with all Affiliates (as hereinafter
defined) and Associates (as hereinafter defined) of the Person, shall be the
Beneficial owner (as hereinafter defined) of 15% or more of the shares of Common
Stock then outstanding and shall include all Affiliates and Associates of the
Person, but shall not include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company or any
entity holding shares of Common Stock organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(b) "AFFILIATE" shall mean, with respect to a specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the Person specified.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (i)
any corporation or organization (other than the Company or a Subsidiary of the
Company) of which the Person is an officer, director or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
security as defined in Rule 3a-11 of the General Rules and Regulations under the
Exchange Act, (ii) any trust or other estate in which the Person has a
substantial beneficial interest or as to which the Person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of the Person,
or any relative of the spouse, who has the same home as the Person, or is an
officer or director of any corporation controlling or controlled by the Person.
(d) "BENEFICIAL OWNERSHIP" shall be determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act (or any successor
rule or statutory provision); provided, however, that a Person shall, in any
event, also be deemed to be the "BENEFICIAL OWNER" of any securities:
(i) which the Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which the Person or any Affiliate or Associate thereof,
directly or indirectly, has the right to acquire (whether the right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by or on behalf of the Person or any Affiliate or
Associate thereof until the tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon exercise of the
Rights;
(iii) which the Person or any Affiliate or Associate thereof,
directly or indirectly, has sole or shared voting or investment power
with respect thereto pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner' of, or to
"beneficially own," any security under this subparagraph (iii) as a
result of an agreement, arrangement or understanding to vote the
security if the agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by the Person on
Schedule 13D under the Exchange Act; or
(iv) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate or Associate thereof with which the
Person or any Affiliate or Associate thereof has any agreement,
arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in subparagraph (iii) of this paragraph (e)) or
disposing of any voting securities of the Company.
Nothing in this Section 1(d) shall cause a Person engaged in business
as an underwriter to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through the Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of
acquisition.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Illinois are authorized
or obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
Chicago, Illinois time, on that date; provided, however, that if the date is not
a Business Day it shall mean 5:00 P.M., Chicago, Illinois time, on the next
succeeding Business Day.
(g) "CLOSING PRICE" of any security on any given day shall be the
last sale price, regular way, of the security or, in case no sale takes place on
that day, the average of the closing bid and asked prices, regular way, on the
principal trading market on which the security is then traded.
(h) "COMMON STOCK" shall mean the common stock, par value $0.01 per
share, of the Company, and "common stock" when used with reference to any Person
other than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to control
or direct the management, of the Person.
(i) "CURRENT MARKET PRICE" of any security on any given date shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of the security for 10 consecutive Trading Days (as hereinafter defined)
immediately preceding the date; provided, however, that with respect to shares
of capital stock, in the event that the current market price per share of the
capital stock is determined during a period following the announcement of (i) a
dividend or distribution on the capital stock payable in shares of the capital
stock or securities convertible into shares of the capital stock (other than the
Rights), or (ii) any subdivision, combination or reclassification of the capital
stock, and prior to the expiration of the requisite 10 Trading Day period, as
set forth above, after the ex-dividend date for the dividend or distribution, or
the record date for the subdivision, combination or reclassification, then and
in each case, the "Current Market Price" shall be properly adjusted to take into
account ex-dividend trading; and provided further, that if the security is not
publicly held or not so listed or traded, "Current Market Price" per share or
other trading unit shall mean the fair value per share or other trading unit 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
which shall be conclusive for all purposes.
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to the rule or
regulation as was in effect on the date of this Agreement.
(k) "EXCHANGE DATE" shall mean the date, if any, upon which the
Rights are exchanged as provided in Section 24 of this Agreement.
(l) "EXPIRATION DATE" shall mean the Close of Business on 14 October,
2008 subject to extension as provided in Section 12(c) of this Agreement.
(m) "FLIP-IN EVENT" shall mean any of the events described in Section
11(a) of this Agreement.
(n) "FLIP-OVER EVENT" shall mean any of the events described in
Section 12(a) of this Agreement.
(o) "PERSON" shall mean any individual, firm, corporation,
partnership or other entity and shall include any "group" as that term is used
in Rule 13d-5(b) under the Exchange Act.
(p) "PURCHASE PRICE" shall mean the price to be paid by the holders
of Rights, upon the exercise thereof, per one one-hundredth share of Preferred
Stock, subject to adjustment in accordance with Section 13 of this Agreement.
The initial Purchase Price shall be U.S. $45 per one one-hundredth share of
Preferred Stock.
(q) "PREFERRED STOCK" shall mean shares of Series A Junior Preferred
Stock, par value $0.01 per share, of the Company.
(r) "RECORD DATE" shall mean October 28, 1998.
(s) "REDEMPTION DATE" shall mean the date upon which the Rights are
ordered to be redeemed pursuant to Section 23 of this Agreement.
(t) "SEPARATION DATE" shall mean the earlier of (i) the 10th day
after the Stock Acquisition Date (as hereinafter defined) or (ii) the 10th day
after the date of the commencement of, or first public announcement of the
intent to commence, a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company or any entity holding shares of Common Stock
organized, appointed or established by the Company for or pursuant to the terms
of any such plan), if upon consummation thereof, the Person would be the
Beneficial Owner of 40% or more of the shares of Common Stock then outstanding
(including any date that is after the date of this Agreement and prior to issue
of the Rights).
(u) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company, an Acquiring Person or otherwise, that an Acquiring
Person has become an Acquiring Person.
(v) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation of which a majority of any class of equity security is Beneficially
Owned, directly or indirectly, by the Person.
(w) "TRADING DAY," with respect to any security shall mean a day on
which the principal national securities exchange on which the security is listed
or admitted to trading is open for the transaction of business or, if the
security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(x) "TRIGGERING EVENT" shall mean a Flip-In Event or a Flip-Over
Event.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its good
faith judgment, which determination shall be final and binding on the Rights
Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 of this Agreement, shall prior to the
Separation Date also be the holders of the Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts the
appointment. The Company may from time to time appoint whichever co-Rights
Agents it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Separation Date, (i) the Rights will be evidenced by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Separation Date, the Rights Agent will send, at
the expense of the Company, by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the
Separation Date, at the address of the holder shown on the records of the
Company, a Rights certificate (the "RIGHTS CERTIFICATE"), evidencing one Right
(as adjusted from time to time prior to the Separation Date pursuant to this
Agreement) for each share of Common Stock so held. As of and after the
Separation Date, the Rights will be evidenced solely by Rights Certificates.
(c) As soon as practicable after the Record Date, the Company will
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 the holder shown on the records of the Company.
(d) Certificates for the Common Stock issued after the Record Date
but prior the earlier of the Separation Date or the Expiration Date (as
hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between
Alternative Resources Corporation (the "Company") and Harris Trust and
Savings Bank, dated as of October 15, 1998 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, the
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, Rights beneficially owned by Acquiring Persons (as
defined in the Rights Agreement) become null and void and the holder
of those Rights (including any subsequent holder) shall not have any
right to exercise the Rights.
(e) After the Separation Date but prior to the Expiration Date,
Rights shall only be issued in connection with the issue of Common Stock upon
the exercise of stock options granted prior to the Separation Date or pursuant
to other benefits under any employee plan or arrangement established prior to
the Separation Date; provided, however, that if, pursuant to the terms of any
option or other benefit plan, the number of shares issuable thereunder is
adjusted after the Separation Date, the number of Rights issuable upon issuance
of the shares shall be equal only to the number of shares which would have been
issuable prior to the adjustment.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to purchase
shares and form of assignment) shall be in substantially the form of Exhibit B
and may contain whatever marks of identification or designation and/or legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or to conform to usage. Subject to
the provisions of this Agreement, the Rights Certificates, whenever issued,
shall be dated as of the Record Date and on their face shall entitle the holders
thereof to purchase the number of shares of Preferred Stock which shall be set
forth therein at the Purchase Price set forth therein, subject to adjustment as
provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) of this
Agreement that represents Rights beneficially owned by an Acquiring Person or
that represents any Rights owned on or after the Separation Date by any Person
who subsequently becomes an Acquiring Person and any Rights Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person thereof or to
any nominee of the Acquiring Person and any Rights Certificate issued pursuant
to Section 6 or Section 13 of this Agreement upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, may contain the following legend:
The Rights represented by this Rights Certificate were issued to
a Person who was or became an Acquiring Person. This Rights
Certificate and the Rights represented hereby may become void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by the Chairman of its Board of Directors, its President or any Vice
President, either manually or by facsimile signature and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Rights Certificate shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be an officer of the Company before countersignature
by the Rights Agent and issue and delivery by the Company, the 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 the Rights Certificates had not ceased to be an officer of the
Company; and any Rights Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of the Rights Certificate,
is an officer of the Company, even if on the date of execution of this Rights
Agreement that person was not an officer.
(b) Following the Separation Date, the Rights Agent will keep or
cause to be kept, at one of its offices, books for registration and transfer of
the Rights Certificates issued hereunder. The books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced by each of the Rights Certificates, and the certificate number
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 14 of this Agreement, at any
time after the Close of Business on the Separation Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of shares of Preferred Stock (or other securities, cash or other
property, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled the holder (or former holder in the case of a trans-
fer) to purchase. Any registered holder desiring to transfer, split up, combine
or exchange any Rights Certificate or Certificates shall make a request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the principal office of the Rights Agent designated for that purpose.
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.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Each Right shall entitle (except as otherwise provided in this
Agreement) the registered holder thereof, upon the exercise thereof as provided
in this Agreement, to purchase, for the Purchase Price, at any time after the
Separation Date and prior to the earliest of the Expiration Date, the Redemption
Date and the Exchange Date, one one-hundredth share of Preferred Stock, subject
to adjustment from time to time as provided in Section 13 of this Agreement,
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(b) Subject to Section 7(e), Section 23(a) and Section 24 of this
Agreement, the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Separation
Date upon surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof including the certificate contained therein
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth share of
Preferred Stock as to which the Rights are exercised prior to the earliest of
the Expiration Date, the Exchange Date and the Redemption Date. The Purchase
Price and the number of shares of Preferred Stock to be acquired upon exercise
of a Right shall be subject to adjustment from time to time as provided in
Section 13 of this Agreement.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase including the certificate
contained therein duly executed, accompanied by payment of the Purchase Price
for the shares (or cash or other assets as the case may be) 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 thereupon
promptly:
(i)(A) requisition from any transfer agent for the Preferred Stock
certificates for the number of one one-hundredths of a share of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from
the depositary agent depositary receipts representing the number of one
one-hundredths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by
the receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with the
request;
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 of this
Agreement;
(iii) after receipt of the certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of
the Rights Certificate, registered in whatever name or names may be
designated by the holder; and
(iv) after receipt, deliver the cash, if any, to or upon the
order of the registered holder of the Rights Certificate.
If the Company becomes obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company shall make all arrangements necessary so that the other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) If the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of the Rights Certificate or
to his duly authorized assigns, subject to the provisions of Section 6 and
Section 14 of this Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of the earlier of: (x) the date on which the Board of Directors
of the Company decides to exchange the Rights pursuant to Section 24 of this
Agreement, and (y) a Triggering Event, any unexercised Rights that are or were,
at any time on or after the earlier to occur of: (a) the Separation Date and (b)
the Stock Acquisition Date, beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any Associate or Affiliate thereof) who becomes a transferee after
the Acquiring Person becomes an Acquiring Person, (iii) a transferee of an
Acquiring Person (or of any Associate or Affiliate thereof) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming an
Acquiring Person and receives the Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in the Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall immediately become permanently null and void without any further action,
and no holder of the Rights shall have any right whatsoever with respect to the
Rights under this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b) of
this Agreement are complied with, but shall have no liability to any holder of
Rights Certificates or to any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Rights Certificate upon the
occurrence of any purported exercise thereof unless the registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for the exercise and (ii) provided the additional evidence of the identity of
the Beneficial Owner (or former or proposed Beneficial Owner) or Affiliates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificates purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy the cancelled Rights Certificates, and
in that case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred Stock
held in its treasury, free from preemptive rights or any right of first refusal,
the number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all Rights from time to time outstanding.
(b) So long as the shares of Preferred Stock issuable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after the time the Rights
become exercisable, all shares reserved for issue to be listed on the exchange
upon official notice of issue when exercised.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earlier of the
Separation Date or as soon as is required by law, a registration statement
under the Securities Act of 1933 (the "ACT"), with respect to the Preferred
Stock purchasable upon exercise of the Rights on an appropriate form;
(ii) cause the registration statement to become effective as soon as
practicable after the filing; and
(iii) cause the registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earliest of (A) the date as of which Rights are no longer exercisable for
the securities, (B) the Expiration Date and (C) the Redemption Date.
The Company will also take all action necessary to ensure compliance with
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file the registration statements and permit them to become
effective. Upon any suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at the time the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in that jurisdiction shall have been obtained and, if applicable, until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all action as
may be necessary to ensure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for the
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Rights Certificates
and of any shares of Preferred Stock upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of shares of Preferred Stock in respect of a
name other than that of the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise, issue or delivery of any
certificates for shares of Preferred Stock in a name other than that of, the
registered holder, upon the exercise of any Rights, until the tax shall have
been paid (any tax being payable by the holder of the Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for shares of Preferred Stock 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 represented thereby on, and the certificate shall
be dated, the date upon which the Rights Certificate evidencing the Rights was
duly surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of surrender and payment is
a date upon which the Preferred Stock transfer books of the Company are closed,
the Person shall be deemed to have become the record holder of the shares on,
and the certificate shall be dated, the next succeeding Business Day on which
the Preferred Stock transfer books of the Company are open.
Section 11. The Flip-In. (a) If:
(i) any Acquiring Person, directly or indirectly, shall merge
into the Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of the merger or
combination and the Common Stock of the Company shall remain
outstanding and unchanged; or
(ii) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any entity organized, appointed or established
pursuant to the terms of such plan) shall become the Beneficial Owner
of 40% or more of the shares of Common Stock then outstanding; or
(iii) during the time when there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions (whether or not with or into or
otherwise involving an Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries which is directly
or indirectly owned by any Acquiring Person; or
(iv) any Acquiring Person shall, directly or indirectly,
purchase, sell or lease any assets of the Company, in one transaction
or a series of transactions, having an aggregate fair market value (as
reasonably determined in good faith by a majority of the Board of
Directors) in excess of 40% of the Company's market capitalization as
of the date of the initial purchase, sale or lease transaction; or
(v) during the time when there is an Acquiring Person, there
shall be any distribution of assets or securities of the Company or of
any of its Subsidiaries, in one transaction or a series of
transactions, having an aggregate fair market value (as reasonably
determined in good faith by a majority of the Board of Directors) in
excess of 40% or the Company's market capitalization as of the date of
the initial distribution transaction; or
(vi) any Acquiring Person, directly or indirectly, shall receive
management fees or other compensation from the Company or any of its
Subsidiaries other than compensation for full-time employment as a
regular employee or directors' fees on the same basis as the other
directors of the Company or any of its Subsidiaries, or receive the
benefit of guarantees or other financial assistance or tax credits or
other tax advantages from the Company or any of its Subsidiaries;
then, and in each case, subject to the provisions of Section 24 of this
Agreement, each holder of a Right, except as provided below and in Section 7(e)
of this Agreement, shall thereafter have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of shares of Preferred Stock, the number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-hundredths of a share
of Preferred Stock for which a Right is then exercisable and dividing that
product by (y) 50% of the Current Market Price per share of the Common Stock on
the date on which the first of the events listed above in this subparagraph (a)
occurs (the number of shares hereinafter the "ADJUSTMENT SHARES").
(b) In the event that there shall not be sufficient issued but not
outstanding, and authorized but unissued, shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(a), the Company shall take all action as may be necessary to authorize
additional shares of Common Stock for issue upon exercise of the Rights;
provided, however, that if the Company is unable to cause the authorization of a
sufficient number of additional shares of Common Stock, then, in the event the
Rights become so exercisable, the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which the Company is a party, shall,
upon the exercise of the Rights,
(i) pay an amount in cash equal to the excess of (A) the product
of (1) the number of Adjustment Shares, multiplied by (2) the Current Market
Price of the Common Stock (hereinafter the "CURRENT VALUE"), over (B) the
Purchase Price, in lieu of issuing shares of Common Stock and requiring payment
therefor, or
(ii) issue debt or equity securities, or a combination thereof,
having a value equal to the Current Value, where the value of the securities
shall be determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company, and require the payment of the
Purchase Price, or
(iii) deliver any combination of cash, property, Common Stock
and/or other securities having the requisite value, and require payment of all
or any requisite portion of the Purchase Price.
If the Company determines that some action need be taken pursuant to
clauses (i), (ii), or (iii) of the proviso of this Section 11(b), a majority of
the Board of Directors may suspend the exercisability of the Rights for a period
of up to 45 days following the date on which the first of the events listed in
Section 11(a)(i), (ii) or (iii) of this Agreement shall have occurred, in order
to decide the appropriate form of distribution to be made pursuant to the above
proviso and to determine the value thereof. In the event of any suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at the
time the suspension is no longer in effect.
Section 12. The Flip-Over.
(a) If, following the Separation Date, directly or indirectly,
(w) the Company shall consolidate with, or merge with and into, any
other Person; or
(x) 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 the merger and, in connection with the merger, all or part
of the shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other Person or cash or any other property; or
(y) the Company shall effect a share exchange in which all or part of
the Common Stock of the Company shall be exchanged into (including, without
limitation, any conversion into or exchange for) securities of any other
Person, cash or any other property; 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 40%
of the Company's market capitalization as of the date of the initial sale,
mortgage or transfer transaction to any other Person or Persons,
then, and in each case, subject to the provisions of Section 24 of this
Agreement,
(i) each holder of a Right, except as provided in Section 7(e) of
this Agreement, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, the number of shares of freely tradable common
stock of the Principal Party, free and clear of any lien, encumbrance or
other adverse claim, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable (or the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the occurrence
of the Flip-In Event if a Flip-In Event has previously occurred) and
dividing that product by (2) 50% of the Current Market Price per share of
the common stock of the Principal Party on the date of consummation of the
Flip-Over Event;
(ii) all common stock of any Person for which any Right may be
exercised after consummation of a business combination as provided in this
Section 12(a) shall, when issued upon exercise thereof in accordance with
this Agreement, be duly and validly authorized and issued and fully paid
and nonassessable;
(iii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of the Flip-Over Event, all the obligations and duties of
the Company pursuant to this Agreement;
(iv) the term "Company" shall thereafter be deemed to refer to the
Principal Party, it being specifically intended that the provisions of
Section 13 hereof shall apply to the Principal Party;
(v) the Principal Party shall take whatever steps (including, but
not limited to, the reservation of a sufficient number of shares of its
common stock) in connection with the 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; and
(vi) the provisions of Section 11 of this Agreement shall be of no
effect following the first occurrence of any Flip-Over Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (w), (x) or (y) of
the first sentence of Section 12(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in the merger or consolidation, and if no securities are so issued, the
Person that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 12(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to the
transaction or transactions; provided, however, that in any case, (1) if
the common stock of the Person is not at the time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, as then in effect, and the Person is a direct or
indirect Subsidiary of another Person the common stock of which is and has
been so registered, "Principal Party" shall refer to the other Person; and
(2) in case the Person is a Subsidiary, directly or indirectly, of more
than one Person, the common stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of the
Persons is the issuer of the common stock having the greatest aggregate
market value.
(c) The Company shall not consummate any Flip-Over Event unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 12 and further providing that, as soon as practicable after
the date of any Flip-Over Event, the Principal Party will:
(i) prepare and file at its own expense 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 the registration statement to become effective as soon as
practicable after the filing and will use its best efforts to cause the
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earliest of the Expiration
Date, the Exchange Date and the Redemption Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The Principal Party shall temporarily suspend, for a period of time
not to exceed 90 days following the occurrence of a Flip-Over Event, the
exercisability of the Rights in order to prepare an file the registration
statement referred to in clause (i) above, and the Expiration Date shall be
extended by the number of days of the suspension. The provisions of this
Section 12 shall similarly apply to successive Flip-Over Events. In the event
that a Flip-Over Event shall occur at any time after the occurrence of a Flip-In
Event, the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 12(a).
Section 13. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 13.
(a) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend or make a distribution on the Preferred Stock
payable in shares of Preferred Stock into a larger number of shares, (B)
subdivide the outstanding Preferred Stock into a larger number of shares, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then in
each event, except as otherwise provided in this Section 13(a), the Purchase
Price in effect at the time of the record date for the dividend or distribution,
or of the effective date of the subdivision, combination or reclassification,
and the number and kind of shares of Preferred Stock or capital stock issuable
on that date, shall be proportionately adjusted so that the holder of any Rights
(except as provided in Section 7(e) of this Agreement) exercised on or after
that time shall be entitled to receive upon payment of the Purchase Price in
effect immediately prior to that date, the aggregate number and kind of shares
of Preferred Stock or capital stock which, if the Rights had been exercised
immediately prior to that date and at a time when the Preferred Stock transfer
books of the Company were open, he would have owned upon exercise and been
entitled to receive by virtue of the dividend, distribution, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both Section 11(a) of this Agreement and this Section 13(a),
the adjustment provided for in this Section 13(a) shall be in addition to, and
shall be made prior to any adjustment required pursuant to Section 11(a).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
the record date) Preferred Stock (or shares having the same rights, privileges
and preferences as the shares of Preferred Stock ("EQUIVALENT PREFERRED STOCK")
or securities convertible into Preferred Stock or Equivalent Preferred Stock at
a price per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) of less than the Current Market
Price per share of Preferred Stock on the record date, the Purchase Price to be
in effect after the record date shall be determined by multiplying the Purchase
Price in effect immediately prior to the record date by a fraction, the
numerator of which shall be the number of one one-hundredths of shares of
Preferred Stock outstanding on the record date, plus the number of one one-
hundredths of shares of Preferred Stock which the aggregate offering price of
the total number of shares of one one-hundredths of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at the Current Market Price and the denominator of which shall be the number of
one one-hundredths of shares of Preferred Stock outstanding on the record date,
plus the number of additional one one-hundredths of shares of Preferred Stock
and/or Equivalent Preferred Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case the subscription price is paid in a form of consideration
all or part of which is other than cash, the value of the consideration shall be
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Shares of Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of the computation. The adjustment shall be made successively whenever a
record date is fixed; and in the event that rights or warrants are not issued
following an adjustment, the Purchase Price shall be adjusted to be the Purchase
Price that would have been in effect if the record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend at a rate not in excess of $25 per share of Preferred Stock),
assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 13(b)), the Purchase Price to
be in effect after the record date shall be determined by multiplying the
Purchase Price in effect immediately prior to the record date by a fraction, the
numerator of which shall be the Current Market Price per one one-hundredth of a
share of the Preferred Stock on the record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of the subscription rights or warrants applicable to one one-
hundredth of a share of Preferred Stock and the denominator of which shall be
the current market price per one one-hundredth of a share of the Preferred
Stock. The adjustments shall be made successively whenever a record date is
fixed; and in the event that a distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price that would be in effect if the
record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless the 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 13(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 13 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
of one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 13(d), any adjustment
required by this Section 13 shall be made no later than the earlier of (i) three
years from the date of the transaction that mandates the adjustment or (ii) the
earliest of the Expiration Date, the Exchange Date and the Redemption Date.
(e) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Rights thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of the other shares so receivable upon exercise of any
Rights 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 13(a) through (c), inclusive, and the provisions of Section
7, 9, 10, 12 and 14 hereof with respect to the Preferred Stock shall apply on
like terms to any other shares.
(f) 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.
(g) Unless the Company shall have exercised its election as provided
in Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(b) and (c), each Right outstanding immediately
prior to the making of the adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to the adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after adjustment
of the Purchase Price.
(h) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
the adjustment. Each Right held of record prior to the adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest
one-millionth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 13(h), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on the record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which the holders shall be-entitled
as a result of the adjustment, or, at the option of the Company, shall cause to
be distributed to the holders of record in substitution and replacement for the
Rights Certificates held by the holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which the holders shall be entitled after the
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value of the shares of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred Stock
at the adjusted Purchase Price.
(k) In any case in which this Section 13 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of the
event the issuance to the holder of any Rights exercised after the record date,
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon the exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon the exercise on the basis of the Purchase Price in effect prior to
the adjustment; provided, however, that the Company shall deliver to the holder
a due bill or other appropriate instrument evidencing the holder's right to
receive the additional shares upon the occurrence of the event requiring the
adjustment.
(l) Anything in this Section 13 to the contrary notwithstanding, the
Company shall be entitled to make reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 13, as and to the extent
that in its sole discretion the Company shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any shares of Preferred Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to in this Section 13, hereafter made by the Company to
holders of its Preferred Stock shall, if practicable, not be taxable to the
stockholders.
(m) The Company covenants and agrees that 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 40% 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 immediately after the consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(n) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27
hereof, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in
the event the Company shall at any time prior to the Separation Date (i) declare
a dividend or distribution on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Separation Date,
shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following the event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Common Stock immediately prior to the event by a fraction, (1) the numerator
of which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and (2) the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of the event.
(p) Whenever an adjustment is made as provided in Sections 11, 12 and
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
the adjustment and a brief statement of the facts accounting for the
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock a copy of the 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 the certificate and on any adjustment therein contained and shall not
be obligated or responsible for calculating any adjustment nor shall it be
deemed to have knowledge of the adjustment unless and until it shall have
received the certificate.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional Rights or
to distribute Rights Certificates that evidence fractional Rights. In lieu of
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which the fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current Market
Price of a whole Right as of the date on which the fractional Rights would have
been otherwise issuable.
(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-hundredth 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-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates, at the
time the Rights are exercised as herein provided, an amount in cash equal to the
same fraction of the Current Market Price of one one-hundredth of a share of
Preferred Stock as of the date of the exercise.
(c) The holder of a Right by his acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Separation Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Separation 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
Separation Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his rights
pursuant to this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Separation Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Separation Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal corporate trust office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Separation 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; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of the obligation;
provided, however, the Company must use its best efforts to have any order,
decree or ruling lifted or otherwise overturned.
Section 17. Rights Holder Not Deemed a Stockholder Except as
otherwise expressly provided in this Agreement, 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 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, or to
receive dividends or subscription rights, or otherwise, until and only to the
extent that the Right or Rights evidenced by the Rights Certificate shall have
been exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises. The indemnification provided for hereunder shall survive the
expiration of the Rights and the termination of this Agreement. The cost and
expense of enforcing this right of indemnification shall also be paid by the
Company.
The Rights Agent may rely conclusively upon and shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons. Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the likelihood of
the loss or damage and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust 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 the corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 of this
Agreement. In case at the time the 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 successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver the 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 the Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all cases the 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 that 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 the Rights Certificates either in its prior name or in its
changed name; and in all cases the Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed (and no implied duties or obligations shall be
read into this Agreement against the Rights Agent) 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) Before the Rights Agent acts or refrains from acting, the Rights
Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of the 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 the 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) be proved
or established by the Company prior to taking or suffering any action hereunder,
the fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and the
certificate shall be full authorization to the Rights Agent, for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon the certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of facts or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on the Rights Certificates), but all statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 of this Agreement or responsible for the manner, method or amount of any
adjustment or the ascertaining of the existence of facts that would require any
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to the officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any 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 under this Agreement and the date on or
after which the action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any application on or
after the date specified in the application (which date shall not be less than
ten Business Days after the date any officer of the Company actually receives
the application, unless any officer shall have consented in writing to an
earlier date) unless, prior to taking the action (or the effective date in the
case of an omission), the Rights Agent shall have received written instructions
in response to the application subject to the proposed action or omission and/or
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any attorneys or
agents or for any loss to the Company resulting from any act, 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 the funds or
adequate indemnification against the risk or liability is not reasonably assured
to it.
(k) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact event or determination under the Rights
Agreement unless and until the Rights Agent shall be specifically notified in
writing by the Company of the fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, at the expense of the Company, to the 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 the appointment within a period of 30 days after giving notice of
the removal or after it has been notified in writing of the resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with the notification, submit his 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 a court, shall be a corporation organized and
doing business under the laws of the United States or of the State of Illinois
(or of any other state of the United States so long the corporation is
authorized to do business as a banking institution in the State of Illinois), in
good standing, having a principal office in the state of Illinois, that is
authorized by the applicable law to exercise corporate trust 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 $100,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of the appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
any form approved by its Board of Directors to reflect any 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 provision of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to 5:00 P.M., Chicago, Illinois time, on the earlier of (i) the 10th
day following the Stock Acquisition Date, subject to extension by the Board of
Directors for a period of time up to, but not exceeding, 10 additional days, or
(ii) the Expiration Date, redeem all but not less than all 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 (the redemption price hereinafter the "REDEMPTION PRICE").
Notwithstanding anything in this Agreement to the contrary, no Rights may be
exercised at any time that the Rights are subject to redemption in accordance
with the terms of this Agreement.
(b) Immediately upon the action of the Board of Directors of the
Company extending the redemption period pursuant to Section 23(a)(i), evidence
of which shall have been filed with the Rights Agent, the Company shall issue a
press release indicating the date to which the Board of Directors has extended
its right to redeem the Rights.
(c) Notwithstanding anything in this Agreement to the contrary, no
redemption of the Rights shall be permitted after 5:00 P.M., Chicago time, on
the earlier of (i) the 10th day following the Stock Acquisition Date, subject to
extension by the Board of Directors for a period of time up to, but not
exceeding, 10 additional days, or (ii) the Expiration Date.
(d) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing the
notice to all holders at their last addresses as they appear upon the registry
books of the Rights Agent or prior to the Separation Date, on the registry books
of the Transfer Agent for the Common Stock. Any notice mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each notice of redemption will state the method by which the payment of
the Redemption Price will be made. In any case, failure to give notice to any
particular holder of Rights shall not affect the sufficiency of the notice to
other holders of Rights. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time, in
any manner, other than that specifically set forth in this Section 23, and
neither the Company nor any of its Affiliates or Associates may acquire or
purchase for value any Rights at any time, in any manner, other than in
connection with the purchase of shares of associated Common Stock prior to the
Separation Date.
Section 24. Exchange.
(a) The Company may, at its option but subject to receipt of any
required regulatory approvals, by action of the Board of Directors, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e)) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the exchange ratio hereinafter the "EXCHANGE
RATIO"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect an exchange at any time after any Person (other than the
Company, any Subsidiary of the Company any employee plan of the Company or of a
Subsidiary of the Company or any Person holding Common Shares for or pursuant to
the terms of any such employee plan), together with all Affiliates and
Associates of the Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise the
Rights shall terminate and the only right thereafter of a holder of the Rights
shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by the holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any exchange; provided, however, that the
failure to give, or any defect in, the notice shall not affect the validity of
the exchange. The Company promptly shall mail a notice of any exchange to all
holders of Rights at their last addresses as they appear upon the registry books
of Rights Agent. Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred (or Equivalent Preferred Stock, as that term is
defined in Section 13(b)) for shares of Common Stock exchangeable for Rights, at
the initial rate of one one-hundredth 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 Preferred Stock
pursuant to the terms thereof, so that the fraction of a share of Preferred
Stock delivered in lieu of each share of Common Stock shall have at least the
same voting rights as one share of Common Stock.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates that evidence fractional Common
Stock. In lieu of fractional shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which fractional shares 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.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend at a rate not in excess of $25 per share), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
Flip-Over Event, or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each case, the Company shall give to each holder of a
Rights Certificate, in accordance with Section 26, a notice of the proposed
action, which shall specify the record date for the purposes of the stock
dividend, distribution of rights or warrants, or the date on which the
reclassification, Flip-Over Event, 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 date is to be fixed, and the notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 20 days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of the action, and in the case of any other action, at least
20 days prior to the date of the taking of the proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of the event and
the consequences thereof.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Alternative Resources Corporation
100 Tri-State International
Suite 300
Lincolnshire, Illinois 60069
Attention: Secretary
With copy to: McDermott, Will & Emery
227 W. Monroe St.
Chicago, Illinois 60606-5096
Attention: Frederick W. Axley, P.C.
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if delivered by certified or registered mail and be deemed given upon
receipt and addressed (until another address is filed in writing with the
Company) as follows:
Harris Trust and Savings Bank
311 W. Monroe Street
14th Floor
Chicago, IL 60606
Attention: Bruce Hartney
Vice President-Trust Operations
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 the holder at the address of the holder as shown on the registry
books of the Company. The Company shall deliver a copy of any notice or demand
it delivers to the holder of any Rights Certificate to the Rights Agent and the
Rights Agent shall deliver a copy of any notice or demand it deliver to the
holder of any Rights Certificate to the Company.
Section 27. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein or to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates other than an Acquiring Person; provided, however, that no
amendment or supplement may be made if the effect would be to extend or shorten
the redemption period after the Stock Acquisition Date or change the Purchase
Price or the Redemption Price. Notwithstanding any other provisions of this
Section 27, the Board of Directors shall retain the right to amend the Purchase
Price for a period of six months from the date of this Agreement.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement will be effective against the Rights Agent without the execution of
the supplement or amendment by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. 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
Separation 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 Separation Date, the Common Stock).
Section 30. 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.
Section 31. 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 that State applicable to contracts made
and to be performed entirely within that State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of the counterparts shall for all purposes be
deemed to be an original, and all counterparts shall together constitute one and
the same instrument.
Section 33. 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: ALTERNATIVE RESOURCES CORPORATION
By: /s/ Raymond R. Hipp
By: /s/ Steven Purcell Name: Raymond R. Hipp
Name: Steven Purcell Title: Chief Executive Officer
Title: Secretary
Attest: HARRIS TRUST AND SAVINGS BANK, as
Rights Agent
By: /s/ Donald W. Koslow By: /s/ Bruce R. Hartney
Name: Donald W. Koslow Name: Bruce R. Hartney
Title: Vice President Title: Vice President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF PREFERRED STOCK
of
ALTERNATIVE RESOURCES CORPORATION
We, Raymond R. Hipp, Chairman of the Board of Directors and Steven
Purcell, Secretary, of Alternative Resources Corporation, a corporation
organized and existing under the Delaware General Corporation Law, in accordance
with the provisions of Section 151(g) thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation, the Board of Directors on October 15, 1998,
adopted, ratified and approved this Certificate of Designations the series of
preferred stock designated herein.
Section 1. Designation and Amount. The shares of the series of
preferred stock shall be designated as "Junior Preferred Stock, Series A" (the
"Preferred Stock") and the number of shares constituting the series shall be
200,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of preferred stock ranking prior and superior to the shares of
Preferred Stock with respect to dividends, the holders of shares of Preferred
Stock, in preference to the holders of common stock, $.01 par value per
share, of the Corporation (the "Common Stock") and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 15th day of March, June, September and December in
each year (each date being a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $25.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issue of any share or fraction of a
share of Preferred Stock. If the Corporation shall at any time on or after
October 28, 1998 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision of combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each case the
amount to which holders of shares of Preferred Stock were entitled
immediately prior to the event under clause (b) of the preceding sentence
shall be adjusted by multiplying the amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
the event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to the event.
(B) The Corporation shall declare a dividend or distribution on the
Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than
a dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $25.00 per share on
the Preferred Stock shall nevertheless be payable on the subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of the shares of Preferred Stock, unless the date
of issue of the shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on the shares shall begin to
accrue from the date of issue of the shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Preferred Stock entitled to receive a
quarterly dividend and before the Quarterly Dividend Payment Date, in either
of which events the dividends shall begin to accrue and be cumulative from
the Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Preferred Stock in an amount
less than the total amount of the dividends at the time accrued and payable
on the shares shall be allocated pro rata on a share-by-share basis among all
the shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Preferred Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the
event the Corporation shall at any time on or after October 28, 1998 declare
or pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each case the number of votes per share to which
holders of shares of Preferred Stock were entitled immediately prior to the
event shall be adjusted by multiplying the number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after the event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to the event.
(B) Except as otherwise provided herein or by law, the holders of shares
of Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(C) Except as set forth herein, holders of Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Preferred Stock, except
dividends paid ratably on the Preferred Stock and all the parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all the shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) to the Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise acquire
shares of any the 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 Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Preferred Stock, or any shares of stock ranking on a parity with the
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 the
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire the shares at the time and in the manner
therein described.
Section 5. Reacquired Shares. Any shares of Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Preferred Stock
unless, prior thereto, the holders of shares of Preferred Stock shall have
received $100.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of payment,
provided that the holders of shares of Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of Common Stock, or (2) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Preferred Stock, except distributions made ratably on the Preferred
Stock and all other parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon liquidation, dissolution or winding
up. In the event the Corporation shall at any time on or after October 28, 1998
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each case the aggregate amount to which holders of shares
of Preferred Stock were entitled immediately prior to the event under the
proviso in clause (1) of the preceding sentence shall be adjusted by multiplying
the amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after the event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to the event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any case the shares of
Preferred Stock then outstanding shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time on or after October 28, 1998
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Preferred Stock shall be adjusted by multiplying the amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after the event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to the event.
Section 8. No Redemption. The shares of Preferred Stock shall not be
redeemable.
Section 9. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of two-thirds
or more of the outstanding shares of Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of this
15th day of October, 1998.
Raymond R. Hipp
Chairman of the Board of
Directors
ATTEST:
Steven Purcell, Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER OCTOBER 14, 2008 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS THOSE TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECAME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF THE RIGHTS AGREEMENT.
RIGHTS CERTIFICATE
ALTERNATIVE RESOURCES CORPORATION
This certifies that or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of October 15, 1998 (the "RIGHTS
AGREEMENT") between Alternative Resources Corporation, a Delaware corporation
(the "COMPANY"), and the Harris Trust and Savings Bank (the "RIGHTS AGENT"),
unless notice of redemption shall have been previously given by the Company, to
purchase from the Company at any time after the Separation Date (as that term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Chicago, Illinois time)
on October 14, 2008 at the principal corporate trust office of the Rights Agent,
or at the office of its successor as Rights Agent, one one-hundredth of a fully
paid nonassessable share of the Junior Preferred Stock, Series A (the "PREFERRED
STOCK"), par value $.01 per share, of the Company, at a purchase price of $45.00
per one one-hundredth share upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The Purchase
Price may be paid in cash or by certified bank check or money order payable to
the order of the Company.
The number of Rights evidenced by this Rights Certificate (and the
number of shares of Preferred Stock which may be purchased upon exercise
thereof) and the Purchase Price set forth above have been determined as of
October 28, 1998, based on the Common Stock of the Company as constituted on
that date. As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock or other securities, cash or other property
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
If the Rights evidenced by this Rights Certificate are or were
formerly beneficially owned, on or after the earlier of the Separation Date and
the Stock Acquisition Date, by an Acquiring Person or an Affiliate, Associate or
direct or indirect transferee of an Acquiring Person, the Rights may become null
and void and the holder of the Right (including any subsequent holder) shall not
have any right with respect to the Right.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used in this Rights Certificate have the same meanings given
to the terms in the Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the above-mentioned
office of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal corporate trust office of the Rights Agent, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Stock or other property as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered entitled the holder to
purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
close of business on the 10th day following the time it becomes public that an
Acquiring Person has become an Acquiring Person (with the possibility of an
extension for an additional 10 days) and (ii) the Expiration Date.
No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of share of Preferred Stock, which may,
at the election of the Company, be evidenced by depository receipts) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
but in lieu thereof the Company may elect to make a cash payment, as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or to receive dividends or shall be deemed, for any purpose, the holder of
Preferred Stock or of any other securities, cash or property which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or this Certificate be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company, including,
without limitation, any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or to institute, as a holder of
Preferred Stock or other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action, or otherwise, until and
only to the extent the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until the Rights Agent shall have countersigned it.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of October 15, 1998.
ALTERNATIVE RESOURCES CORPORATION
By:
Title:
ATTEST:
Steven Purcell
Secretary
Countersigned:
By:
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if the holder desires to transfer
the Rights Certificates.)
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: , 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as those terms are defined in
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: , 19__ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
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.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Rights
Certificate issued in exchange for this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented by
this Rights Certificate)
To: Alternative Resources Corporation
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock ______________ or other securities, cash or other
property issuable upon the exercise of the Rights and requests that certificates
for the shares or other securities be issued in the name of, and the cash or
other property be paid to:
Please insert social security or other identifying number
(Please print name and address)
If the number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining balance of the Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: ,19__
Signature
(Signature must conform in all respects to name of holder as
specified on the face of this Rights Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being exercised by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any Acquiring Person (as those terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: , 19__ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
NOTICE
The signature on the foregoing Form of Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Election
is not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
Exhibit C
ALTERNATIVE RESOURCES CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of Alternative Resources Corporation, a Delaware
corporation (the "COMPANY"), on October 15, 1998, declared a dividend of one
preferred share purchase right (a "RIGHT") for each share of Common Stock, $.01
par value, of the Company (the "COMMON STOCK"). The dividend is payable to
stockholders of record at the close of business on October 28, 1998 (the "RECORD
DATE") and with respect to all shares of Common Stock that become outstanding
after the Record Date and prior to the earliest of the Separation Date (as
defined below), the redemption of the Rights, the exchange of the Rights and the
expiration of the Rights. Except as set forth below and subject to adjustment
as provided in the Rights Agreement (as defined below), each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
the Company's Junior Preferred Stock, Series A, $0.01 par value per share (the
"PREFERRED STOCK"), at a purchase price of $45 per one one-hundredth of a share
(the "PURCHASE PRICE"). The description and terms of the Rights are set forth
in a Rights Agreement dated as of October 15, 1998 (the "RIGHTS AGREEMENT"),
between the Company and the Harris Trust and Savings Bank, as Rights Agent (the
"RIGHTS AGENT").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (an "ACQUIRING PERSON"), has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding Common Stock
(the "STOCK ACQUISITION DATE") or (ii) 10 days following commencement or
disclosure of an intention to commence a tender offer or exchange offer by a
person other than the Company and certain related entities if, upon consummation
of the offer, the person or group, together with persons affiliated or
associated with it, could acquire beneficial ownership of 40% or more of the
outstanding Common Stock (the earlier of the dates being the "SEPARATION DATE").
Until the Separation Date (or earlier redemption or expiration of the Rights),
the transfer of Common Stock will also constitute transfer of the associated
Rights. Following the Separation Date, separate certificates will evidence the
Rights.
The Rights will first become exercisable on the Separation Date (unless
sooner redeemed). The Rights will expire at the close of business on October
14, 2008 (the "EXPIRATION DATE"), unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price and the number of shares of Preferred Stock or other
securities, cash or other property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights, options, warrants to subscribe for Preferred
Stock or securities convertible into Preferred Stock at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of other securities, cash (excluding regular periodic
cash dividends at an annual rate not in excess of 125% of the annualized rate of
cash dividends paid during the preceding fiscal year), property, evidences of
indebtedness, or assets.
If, following the Separation Date, the Company is acquired in a merger or
other business combination in which the Common Stock does not remain outstanding
or is changed, or an amount of the consolidated assets or earning power of the
Company having a value greater than 40% of the Company's market capitalization
is sold, leased, exchanged, mortgaged, pledged or otherwise transferred or
disposed of (in one transaction or a series of transactions), the Rights will
"FLIP-OVER" and entitle each holder of a Right to purchase, upon the exercise of
the Right at the then-current Purchase Price, that number of shares of common
stock of the acquiring company (or, in certain circumstances, one of its
affiliates) which at the time of the transaction would have a market value of
two times the Purchase Price.
If (i) a person acquires beneficial ownership of 40% or more of the Common
Stock, (ii) the Company is the surviving corporation in a merger with an
Acquiring Person and the Common Stock remains outstanding and unchanged, or
(iii) an Acquiring Person engages in a "self-dealing" transaction described in
the Rights Agreement, the Rights will "FLIP-IN" and entitle each holder of a
Right, except as provided below, to purchase, upon exercise at the then-current
Purchase Price, that number of shares of Common Stock having a market value of
two times the Purchase Price.
Any "flip-over" event or "flip-in" event is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the Separation Date
by an Acquiring Person or an affiliate or associate of an Acquiring Person
(whether or not ownership is subsequently transferred) will become null and void
upon the occurrence of a Triggering Event, and any holder of Rights will have no
right to exercise the Rights.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. Holders will have no right to receive fractional shares of
Preferred Stock (other than fractions that are integral multiples of one one-
hundredth of a share of Preferred Stock) upon the exercise of Rights. In lieu
of fractional shares, an adjustment in cash may be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
The number of outstanding Rights and the number of one one-hundredths of a
share of Preferred Stock issuable upon exercise of each Right and the Purchase
Price are also subject to adjustment in the event of a stock split of the Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any case, prior to the Separation Date.
At any time prior to the earlier of (i) the closing of business on the 10th
day following the time that it becomes public that an Acquiring Person has
become an Acquiring Person (with the possibility for the Board of Directors to
extend this time for an additional 10 days) and (ii) the Expiration Date, the
Company may redeem the Rights in whole, but not in part, at a price of $0.01 per
Right. Immediately upon the action of the Company's Board of Directors electing
to redeem the Rights, the right to exercise the Rights will terminate and the
only right of the holders of Rights thereafter will be to receive the applicable
redemption price.
The Company may, at any time after any person becomes an Acquiring Person
and prior to the time any person, together with its affiliates, becomes the
beneficial owner of at least 50% of the Company's outstanding Common Stock,
provided that all necessary regulatory approvals have been obtained, exchange
the Rights (other than Rights owned by the Acquiring Person which became null
and void), in whole or in part, at a ratio of one share of Common Stock per
right, subject to adjustment.
Until a Right is exercised, the holder has no rights as a Stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
At any time prior to the time that the Company's Board of Directors becomes
aware that an Acquiring Person has become an Acquiring Person, the Company may,
without the approval of any holder of the Rights, supplement or amend any
provision of the Rights Agreement (including the date on which the Distribution
Date will occur), except the Purchase Price, the number of shares of Preferred
Stock, other securities, cash or other property obtainable upon exercise of a
Right, the redemption price or the Expiration Date. Thereafter, the Rights
Agreement may be amended only to cure ambiguities, to correct inconsistent
provisions, or in ways that do not adversely affect the holders of the Rights.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $25.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of Common
Stock, if it is greater. In the event of liquidation, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100.00 per share, but will be entitled to an aggregate payment of 100 times
the payment made per share of Common Stock, if it is greater. In the event of
any merger or other business combination in which Common Stock is exchanged,
each share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. Customary anti-dilution provisions protect
these rights.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-hundredth of a share of Preferred Stock
purchasable upon exercise of each Right is intended to approximate the value of
one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned upon a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors prior to 10 days after the Stock Acquisition,
because until that time, the Rights may be redeemed by the Company at $.01 per
Right.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission and is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
