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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 16, 1999
MICHAEL BAKER CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 1-6627 25-0927646
- ------------------------------- ---------------- ----------------------------
(State or other jurisdiction of (Commission File (IRS Employer Identification
incorporation) Number) Number)
Airport Office Park, Building 3, 420 Rouser Road, Coraopolis, Pa 15108
----------------------------------------------------------------------
(Address of principal executive offices)
(412) 269-6300
--------------
(Registrant's telephone number)
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Item 5. Other Events.
Effective November 11, 1999, the Board of Directors of Michael
Baker Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock, par value $1.00 per share (the "COMPANY
COMMON STOCK"), to shareholders of record at the close of business on November
30, 1999 (the "RECORD DATE") and for each share of Company Common Stock issued
(including shares distributed from treasury) by the Company thereafter and prior
to the Distribution Date (as defined below). Each Right entitles the registered
holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-hundredth of a share (a "UNIT") of Company
Common Stock, at a Purchase Price of $27.00 per Unit, subject to adjustment. The
Purchase Price is payable in cash or by certified or bank check or money order
payable to the order of the Company. The description and terms of the Rights are
set forth in a Rights Agreement between the Company and American Stock Transfer
and Trust Company, as Rights Agent (the "RIGHTS AGREEMENT").
Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the Company
Common Stock and the "DISTRIBUTION DATE" will occur upon the earlier of (i) 10
business days following a public announcement (the date of such announcement
being the "SHARES ACQUISITION DATE") that a person or group of affiliated or
associated persons (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or such subsidiary, or the trust maintained
by the Company's employee stock ownership plan) (an "ACQUIRING PERSON") has
acquired, obtained the right to acquire, or otherwise obtained beneficial
ownership of 25% or more of the then outstanding shares of Company Common Stock,
and (ii) 10 business days (or such later date as may be determined by action of
the Board of Directors prior to such time as any person becomes an Acquiring
Person) following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 25% or more of the Company
Common Stock from time to time outstanding.
The Rights Agreement provides that, until the Distribution
Date, (i) the Rights will be evidenced by Company Common Stock certificates and
will be transferred with and only with such Company Common Stock certificates,
(ii) new Company Common Stock certificates issued after the Record Date (also
including shares distributed from treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation
in a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) an Acquiring Person becomes the beneficial owner of 25%
or more of the then outstanding shares of Company Common Stock, (iii) an
Acquiring Person engages in one or more "self-dealing" transactions as set forth
in the Rights Agreement, or (iv) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., by means of a reverse stock
split or recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to acquire, upon
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exercise of such Right, that number of shares of Company Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right. The exercise price
is the Purchase Price multiplied by the number of Units of Company Common Stock
issuable upon exercise of a Right prior to the events described in this
paragraph. Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
The Company may, at the Board of Directors' option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (other than those that have become null
and void)for Company Common Stock at an exchange ratio of one share of Company
Common Stock per Right, as adjusted to reflect any stock split, stock dividend,
or similar transaction. The Company may not, however, effect such an exchange
after any Person becomes the owner of 50% or more of the Company's Common Stock.
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation (other
than a merger described in the preceding paragraph), (ii) any Person
consolidates or merges with the Company and all or part of the Company Common
Stock is converted or exchanged for securities, cash or property of any other
Person or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to acquire, upon
exercise of such Right, common stock of the Acquiring Person having a value
equal to two times the exercise price of the Right.
The Purchase Price and the number of Units or shares, as the
case may be, of the Company Common Stock 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 on, or subdivision, combination or reclassification of, the
Company Common Stock, (ii) if holders of the Company Common Stock are granted
certain rights or warrants to subscribe for Company Common Stock or convertible
securities at less than the current market price of the Company Common Stock, or
(iii) upon the distribution to the holders of the Company Common Stock of
evidences of indebtedness, cash or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional Units or shares
of the Company Common Stock. In lieu thereof, an adjustment in cash may be made
based on the market price of the Company Common Stock prior to the date of
exercise or exchange.
At any time until ten business days following the Shares
Acquisition Date, a majority of the Directors in accordance with the Company's
By-Laws may redeem the Rights in whole, but not in part, at a price of $0.001
per Right (subject to adjustment in certain events) (the "REDEMPTION PRICE"),
payable, at the election of such majority of the Directors in accordance with
the Company's By-Laws, in cash or shares of Company Common Stock. Immediately
upon the action of a majority of the Directors in accordance with the Company's
By-Laws ordering the redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof,
as such, will have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to shareholder or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable or exchangeable for Units or shares of
Company Common Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time prior to
the Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to
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adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
Item 7. Financial Statements and Exhibits.
The following exhibits are filed as part of this current
report:
Exhibit No. Document
- ----------- --------------------------------------------------------------
4. Rights Agreement, dated November 16, 1999, between Michael
Baker Corporation and American Stock Transfer and Trust
Company, with the form of Right Certificate attached as
Exhibit A and a Summary of Rights to Acquire Common Stock
attached as Exhibit B. Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed until as soon as
practicable after the earlier of (i) the tenth day after
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 25% or more of the Company's Common
Stock or (ii) the tenth business day (or such later date as
may be determined by action of the Board of Directors prior to
the time a person or group becomes an Acquiring Person) after
the commencement of, or the announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or
group of 25% or more of the Company's Common Stock. Pursuant
to the Rights Agreement, the Summary of Rights to Acquire
Common Stock will be mailed as soon as practicable following
the Record Date to the holders of the Common Stock as of the
close of business on the Record Date.
99. Press release dated November 16, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MICHAEL BAKER CORPORATION
By: /s/ H. James McKnight
------------------------------------
Name: H. James McKnight
Title: Vice President, General Counsel and
Secretary
Date: November 16, 1999
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MICHAEL BAKER CORPORATION
FORM 8-K
DATE OF REPORT: NOVEMBER 16, 1999
EXHIBIT INDEX
The following exhibits are filed as part of this current
report on Form 8-K:
Exhibit No. Document
- ----------- --------------------------------------------------------------
4. Rights Agreement, dated November 16, 1999, between Michael
Baker Corporation and American Stock Transfer and Trust
Company, with the form of Right Certificate attached as
Exhibit A and a Summary of Rights to Acquire Common Stock
attached as Exhibit B. Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed until as soon as
practicable after the earlier of (i) the tenth day after
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 25% or more of the Company's Common
Stock or (ii) the tenth business day (or such later date as
may be determined by action of the Board of Directors prior to
the time a person or group becomes an Acquiring Person) after
the commencement of, or the announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or
group of 25% or more of the Company's Common Stock. Pursuant
to the Rights Agreement, the Summary of Rights to Acquire
Common Stock will be mailed as soon as practicable following
the Record Date to the holders of the Common Stock as of the
close of business on the Record Date.
99. Press release dated November 16, 1999.
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Exhibit 4
================================================================================
RIGHTS AGREEMENT
Dated as of November 16, 1999
MICHAEL BAKER CORPORATION
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY,
AS RIGHTS AGENT
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 1. Certain Definitions......................................................... 1
SECTION 2. Appointment of Rights Agent................................................. 3
SECTION 3. Issue of Rights Certificates................................................ 4
SECTION 4. Form of Rights Certificates................................................. 5
SECTION 5. Countersignature and Registration........................................... 6
SECTION 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates............................................... 6
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............... 7
SECTION 8. Cancellation and Destruction of Rights Certificates......................... 8
SECTION 9. Reservation and Availability of Capital Stock............................... 8
SECTION 10. Company Common Stock Record Date............................................ 9
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.................................................. 10
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.................. 17
SECTION 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power..................................................... 17
SECTION 14. Fractional Rights and Fractional Shares..................................... 19
SECTION 15. Rights of Action............................................................ 20
SECTION 16. Agreement of Rights Holders................................................. 20
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder.......................... 20
SECTION 18. Concerning the Rights Agent................................................. 21
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent................... 21
SECTION 20. Duties of Rights Agent...................................................... 22
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 21. Change of Rights Agent...................................................... 23
SECTION 22. Issuance of New Rights Certificates......................................... 24
SECTION 23. Redemption and Termination.................................................. 24
SECTION 24. Exchange.................................................................... 25
SECTION 25. Notice of Certain Events.................................................... 26
SECTION 26. Notices..................................................................... 27
SECTION 27. Supplements and Amendments.................................................. 27
SECTION 28. Successors.................................................................. 28
SECTION 29. Determinations and Actions by the Board of Directors, etc................... 28
SECTION 30. Benefits of this Agreement.................................................. 28
SECTION 31. Severability................................................................ 28
SECTION 32. Governing Law............................................................... 29
SECTION 33. Counterparts................................................................ 29
SECTION 34. Descriptive Headings........................................................ 29
EXHIBIT A - Form of Rights Certificate
EXHIBIT B - Form of Summary of Rights
</TABLE>
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 16, 1999 (the
"AGREEMENT"), between MICHAEL BAKER CORPORATION, a Pennsylvania corporation (the
"COMPANY"), and AMERICAN STOCK TRANSFER AND TRUST COMPANY, a New York
corporation (the "RIGHTS AGENT").
WHEREAS, effective November 11, 1999 (the "RIGHTS DIVIDEND
DECLARATION DATE"), the Board of Directors of the Company authorized and
declared a distribution of one Right for each share of Company Common Stock (as
hereinafter defined) outstanding at the Close of Business on November 30, 1999
(the "RECORD DATE"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant hereto) for each share of Company
Common Stock issued between the Record Date (whether originally issued or
delivered from the Company's treasury), and except as otherwise provided in
Section 22, the Distribution Date, each Right initially representing the right
to purchase upon the terms and subject to the conditions hereinafter set forth
one one-hundredth of a share of Company Common Stock (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:
"ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 25% or more of the Company Common
Stock then outstanding, but shall not include the Company or any Related Entity
(as such term is hereinafter defined). Notwithstanding the foregoing, no Person
shall become an "ACQUIRING PERSON" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 25% or more of the Company Common Stock then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 25% or more of the Company
Common Stock then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Company Common Stock, then such Person shall be deemed to be an
"ACQUIRING PERSON"; provided further, however, that the term "ACQUIRING PERSON"
shall not include the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company, any of its Subsidiaries or any trustee
or fiduciary with respect to such plans acting in such capacity, or the trust
maintained by the Company's employee stock ownership plan). Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "ACQUIRING PERSON", as defined pursuant
to the foregoing provisions of this definition, has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares
of the Company Common Stock so that such Person would no longer be an "ACQUIRING
PERSON", as defined pursuant to the foregoing provisions of this definition,
then such Person shall not be deemed to be an "ACQUIRING PERSON" for any
purposes of this Agreement.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act (as such term is hereinafter defined), as in effect on the date
of this Agreement.
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A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "beneficially own," any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of the
General Rules and Regulations under the Exchange Act (the "EXCHANGE ACT
REGULATIONS") as in effect on the date hereof; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own", any
securities under this subdefinition (i) as a result of an agreement, arrangement
or understanding to vote such securities if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);
(ii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (i) of this definition) or disposing of
such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon the
satisfaction of conditions) 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 under this definition 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 in accordance with Exchange Act Regulations by
such Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities that may be
issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities that may be issued upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(c) or Section 22 hereof (the
"ORIGINAL RIGHTS") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
New York, New York time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York, New York time, on the next
succeeding Business Day.
"COMMON STOCK" of any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or, if such
Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.
"COMMON STOCK EQUIVALENTS" has the meaning set forth in
Section 11(a)(iii).
"COMPANY COMMON STOCK" means the Common Stock, par value
$1.00, of the Company.
"CURRENT MARKET PRICE" has the meaning set forth in Section
11(d).
"CURRENT VALUE" has the meaning set forth in Section
11(a)(iii).
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"DEPOSITARY AGENT" has the meaning set forth in Section 7(c).
"DISTRIBUTION DATE" has the meaning set forth in Section 3(a).
"EQUIVALENT COMPANY COMMON STOCK" has the meaning set forth in
Section 11(b).
"EXPIRATION DATE" has the meaning set forth in Section 7(a).
"FINAL EXPIRATION DATE" has the meaning set forth in Section
7(a).
"NASDAQ" has the meaning set forth in Section 11(d).
"PERSON" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under Section 14(d)(2) of
the Exchange Act.
"PRINCIPAL PARTY" has the meaning set forth in Section 13(b).
"PURCHASE PRICE" has the meaning set forth in Section 7(b).
"RECORD DATE" has the meaning set forth in the recital hereto.
"REDEMPTION PRICE" has the meaning set forth in Section 23.
"REGISTERED COMMON STOCK" has the meaning set forth in Section
13(b).
"REGISTRATION DATE" has the meaning set forth in Section 9(c).
"REGISTRATION STATEMENTS" has the meaning set forth in Section
9(c).
"RIGHT" has the meaning set forth in the recital hereto.
"RIGHTS CERTIFICATE" has the meaning set forth in Section
3(a).
"RIGHTS DIVIDEND DECLARATION DATE" has the meaning set forth
in the recital hereto.
"SECTION 11(a)(ii) EVENT" shall mean any event described in
Section 11(a)(ii)(A), (B), or (C) hereof.
"SECTION 11(a)(iii) TRIGGER DATE" has the meaning set forth in
Section 11(a)(iii).
"SECTION 13 EVENT" shall mean any event described in clause
(x), (y), or (z) of Section 13(a) hereof.
"SECURITIES ACT" has the meaning set forth in Section 9(c).
"SPREAD" has the meaning set forth in Section 11(a)(iii).
"SHARES ACQUISITION DATE" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) or Section 14(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
"SUBSIDIARY" shall mean, with reference to any Person, any
other Person of which an amount of voting securities or equity interests
sufficient to elect at least a majority of the directors or equivalent governing
body of such other Person is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such first-mentioned Person.
"SUMMARY OF RIGHTS" has the meaning set forth in Section 3(b).
"TRADING DAY" has the meaning set forth in Section 11(d).
"TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
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"UNIT" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. With the consent of the Rights Agent, the Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier
of (i) the Close of Business on the tenth Business Day after the Shares
Acquisition Date, and (ii) the Close of Business on the tenth Business Day (or
such later date as may be determined by action of a majority of Board of
Directors in accordance with the Company's By-Laws prior to such time and of
which the Company will give the Rights Agent prompt written notice) after the
date that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the Company,
any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, or the trust maintained by the Company's employee
stock ownership plan) is first published or sent or given within the meaning
of Rule 14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 25% or more of
the shares of Company Common Stock then outstanding (the earlier of (i) and (ii)
above being the "DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the certificates for
shares of Company Common Stock registered in the names of the holders of shares
of Company Common Stock as of and subsequent to the Record Date (which
certificates for shares of Company Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Company Common Stock (including a transfer to the Company) and not
separately. As promptly as reasonably practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of shares of Company Common Stock as of the Close of Business
on the Distribution Date, at the address of such holder shown on the records of
the Company, one or more rights certificates, in substantially the form of
Exhibit A hereto (the "RIGHTS CERTIFICATES"), evidencing one Right for each
share of Company Common Stock so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of Company
Common Stock has been made pursuant to Section 11(o) hereof, at the time of
distribution of the Rights Certificates, the Company may make the necessary and
appropriate rounding adjustments in accordance with Section 14(a) hereof, so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as reasonably practicable following the Record
Date, the Company will send a copy of a Summary of Rights to Acquire Company
Common Stock in a form which may be appended to certificates that represent
shares of Company Common Stock, in substantially the form attached hereto as
Exhibit B (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail, to
each record holder of shares of Company Common Stock as of the Close of Business
on the Record Date, at the address of such holder shown on the records of the
Company.
(c) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock which are issued (including any
shares of Company Common Stock held in treasury) after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
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 Michael
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<PAGE> 8
Baker Corporation (the "COMPANY") and American Stock Transfer
and Trust Company (the "RIGHTS AGENT") dated as of November
16, 1999 (the "RIGHTS AGREEMENT"), the terms of which are
hereby incorporated herein by reference and a copy of which is
on file at the principal office of the stock transfer
administration office of the Rights Agent. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
as promptly as reasonably practicable after receipt of a
written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become null
and void."
With respect to certificates representing shares of Company
Common Stock (whether or not such certificates include the foregoing legend or
have appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the shares
of Company Common Stock represented by such certificates shall be evidenced by
such certificates alone and registered holders of the shares of Company Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the shares of Company Common Stock represented by such
certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights
Certificates (and the forms of election to exercise, assignment and certificate
to be printed on the reverse thereof) shall each be substantially in the form
set forth in Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or any
rule or regulation thereunder or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to acquire such number of Units of
Company Common Stock as shall be set forth therein at the price set forth
therein, but the amount and type of securities, cash or other assets that may be
acquired upon the exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) which becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which a majority of the Board of Directors in accordance with the
Company's By-Laws has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
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<PAGE> 9
Section 7(e) hereof shall, upon the written direction of a majority of the Board
of Directors in accordance with the Company's By-Laws, contain (to the extent
feasible) the following legend:
"The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or became
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board of Directors, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the manual
or facsimile signatures of the individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersignature of such Rights Certificates or did not hold such offices at the
date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature duly executed by the Rights Agent by
manual signature of an authorized signatory, and such countersignature upon any
Rights Certificate shall be conclusive evidence, and the only evidence, that
such Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the name and
address of each holder of the Rights Certificates, the number of Rights
evidenced on its face by each Rights Certificate and the date of each Rights
Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES: MUTILATED DESTROYED LOST OR STOLEN RIGHTS CERTIFICATES. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to acquire a like
number of Units of Company Common Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder to acquire. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and executed the certificate set forth in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights represented by such Rights Certificate or Affiliates or Associates
thereof as the Company shall reasonably request; whereupon the Rights Agent
shall, subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
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<PAGE> 10
(b) If a Rights Certificate shall be mutilated, lost, stolen
or destroyed, upon request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights Certificate, in
substantially the form of the prior Rights Certificate, of like tenor and
representing the equivalent number of Rights, but, in the case of loss, theft or
destruction, only upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights Certificate and,
if requested by the Company or the Rights Agent, indemnity also satisfactory to
it.
SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS. (a)
Prior to the earlier of (i) the Close of Business on the tenth anniversary
hereof (the "FINAL EXPIRATION DATE"), and (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being the
"EXPIRATION DATE"), the registered holder of any Rights Certificate may, subject
to the provisions of Sections 7(e) and 9(c) hereof, exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to exercise
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
(if applicable) with payment of the aggregate Purchase Price (as hereinafter
defined) for the number of Units of Company Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share
(each such one one-hundredth of a share being a "UNIT") of Company Common Stock
upon exercise of Rights shall be $27.00, subject to adjustment from time to time
as provided in Sections 11 and 13(a) hereof (such purchase price, as so
adjusted, being the "PURCHASE PRICE"), and shall be payable in accordance with
paragraph (c) below.
(c) As promptly as reasonably practicable following the
occurrence of the Distribution Date, the Company shall deposit with a
corporation in good standing organized under the laws of the United States or
any State of the United States, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority (such institution being the
"DEPOSITARY AGENT"), certificates representing the shares of Company Common
Stock that may be acquired upon exercise of the Rights and shall cause such
Depositary Agent to enter into an agreement pursuant to which the Depositary
Agent shall issue receipts representing interests in the shares of Company
Common Stock so deposited. Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to exercise and the certificate
duly executed, accompanied (if applicable) by payment, with respect to each
Right so exercised, of the Purchase Price for the Units of Company Common Stock
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) to be purchased thereby as set forth below and an amount equal
to any applicable transfer tax or evidence satisfactory to the Company of
payment of such tax, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) requisition from the Depositary Agent depositary receipts
representing such number of Units of Company Common Stock as are to be acquired
and the Company will direct the Depositary Agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional shares in accordance with Section 14 hereof, (iii) after receipt
of such depositary receipts, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate. In the event that the Company is obligated to issue Company
Common Stock, other securities of the Company, pay cash and/or distribute other
property
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<PAGE> 11
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment (if applicable) of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii) hereof) may be made in cash or by
certified or bank check or money order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of any Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of a Acquiring Person (or of
any such Associate or Affiliate) which becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) which becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and which receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which a majority of the
Board of Directors in accordance with the Company's By-Laws has determined to be
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall be null and void without any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights or any other Person as a result
of its failure to make any determination under this Section 7(e) or such Section
4(b) with respect to an Acquiring Person or its Affiliates, Associates or
transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to exercise set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificates acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
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<PAGE> 12
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a)
The Company shall at all times prior to the Expiration Date cause to be reserved
and kept available, out of its authorized and unissued shares of Company Common
Stock, the number of shares of Company Common Stock that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the
aggregate number of shares of Company Common Stock (or other equity securities
of the Company) issuable upon exercise of all outstanding Rights above the
number then reserved, the Company shall make appropriate increases in the number
of shares so reserved.
(b) If the shares of Company Common Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) hereof of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as reasonably practicable following the Distribution
Date (the date on which such registration statement is filed being the
"REGISTRATION DATE"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"REGISTRATION STATEMENT"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to
ensure that all shares of Company Common Stock (and, following the occurrence of
a Triggering Event, any other securities that may be delivered upon exercise of
Rights) issued upon exercise of the Rights shall be, at the time of delivery of
the certificates or depositary receipts for such securities, duly and validly
authorized and issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer
tax imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; provided, however, the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of Units of Company Common Stock, or any certificates or
depositary receipts for such Units of Company Common Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to any person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall
not be required to issue or deliver any certificates or depositary receipts for
Units of Company Common Stock (or, following the occurrence of a Triggering
Event, any other securities, cash or assets, as the case may be) to, or in a
name other than that of, the registered holder upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
SECTION 10. COMPANY COMMON STOCK RECORD DATE. Each Person in
whose name any certificate for Units of Company Common Stock (or, following the
occurrence of a Triggering
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<PAGE> 13
Event, other securities) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Units of Company
Common Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (if applicable) and any applicable
transfer taxes was made; provided, however, that if the date of such surrender
and payment is a date upon which the Company Common Stock (or, following the
occurrence of a Triggering Event, other securities) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the Company Common Stock (or, following the occurrence of
a Triggering Event, other securities) transfer books of the Company are open
and, further provided, however, that if delivery of Units of Company Common
Stock is delayed pursuant to Section 9(c) hereof, such Persons shall be deemed
to have become the record holders of such Units of Company Common Stock only
when such Units first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Company Common
Stock payable in shares of Company Common Stock, (B) subdivide the
outstanding Company Common Stock, (C) combine the outstanding Company
Common Stock into a smaller number of shares, or (D) issue any shares
of its capital stock in a reclassification of the Company Common Stock
(including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Company Common
Stock or capital stock, as the case may be, issuable on such date upon
exercise of the Rights, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive, upon payment (if applicable) of the Purchase Price then in
effect, the aggregate number and kind of shares of Company Common Stock
or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, (1) shall merge
into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and Company Common Stock shall
remain outstanding and unchanged,
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<PAGE> 14
(2) shall, in one transaction or a series of transactions,
transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for shares of
Company Common Stock, for other equity securities of the
Company or any such Subsidiary, or for securities exercisable
for or convertible into shares of equity securities of the
Company or any of its Subsidiaries (whether Company Common
Stock or otherwise) or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any
additional shares of such equity securities or securities
exercisable for or convertible into such equity securities
(other than pursuant to a pro rata distribution to all holders
of Company Common Stock), (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions,
to, from or with the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company, any of
its Subsidiaries or any trustee or fiduciary with respect to
such plans acting in such capacity, or the trust maintained
by the Company's employee stock ownership plan, assets
(including securities) on terms and conditions less favorable
to the Company or such Subsidiary or plan than those that
could have been obtained in arm's-length negotiations with an
unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a) hereof, (4) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company, any Subsidiary of
the Company any employee benefit plan maintained by the
Company, any of its Subsidiaries or any trustee or fiduciary
with respect to such plans acting in such capacity, or the
trust maintained by the Company's employee stock ownership
plan (other than transactions, if any, consistent with those
engaged in, as of the date hereof, by the Company and such
Acquiring Person or such Associate or Affiliate), assets
(including securities) having an aggregate fair market value
of more than $5,000,000, other than pursuant to a transaction
set forth in Section 13(a) hereof, (5) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company, any Subsidiary of
the Company, any employee benefit plan maintained by the
Company, any of its Subsidiaries or any trustee or fiduciary
with respect to such plans acting in such capacity, or the
trust maintained by the Company's employee stock ownership
plan any material trademark or material service mark, other
than pursuant to a transaction set forth in Section 13(a)
hereof, (6) shall receive, or any designee, agent or
representative of such Acquiring Person or any Affiliate or
Associate of such Acquiring Person shall receive, any
compensation from the Company or any of its Subsidiaries other
than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) shall receive the
benefit, directly or indirectly (except proportionately as a
holder of Company Common Stock or as required by law or
governmental regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or
other tax advantage provided by the Company, any Subsidiary of
the Company, any employee benefit plan maintained by the
Company, any of its Subsidiaries or any trustee or fiduciary
with respect to such plans acting in such capacity or the
trust maintained by the Company's employee stock ownership
plan; or
(B) any Person shall become an Acquiring
Person, other than pursuant to any transaction set forth in
Section 13(a) hereof; or
(C) during such time as 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, consolidation
of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or
any of its Subsidiaries, other than a transaction or
transactions to which the provisions of
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<PAGE> 15
Section 13(a) apply (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 that is
directly or indirectly beneficially owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described
in Section 11(a)(ii)(A)-(C) hereof (a "SECTION 11(a)(ii) EVENT"),
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such number of
shares of Company Common Stock as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of
Units for which a Right is then exercisable and dividing that product
by (y) 50% of the current market price per share of Common Stock
(determined pursuant to Section 11(d) hereof) on the earlier of (x) the
date on which any Person becomes an Acquiring Person and (y) the date
on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company, any of its Subsidiaries or any trustee or
fiduciary with respect to such plans acting in such capacity, or the
trust maintained by the Company's employee stock ownership plan) is
first published or sent or given within the meaning of Rule 14d-4(a) of
the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 25%
or more of the shares of Company Common Stock then outstanding.
(iii) In the event that the number of shares of Company Common
Stock which are authorized by the Company's Articles of Incorporation
but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company, by the vote of a majority of the
Board of Directors in accordance with the Company's By-Laws, shall: (A)
determine the excess of (1) the value of the shares issuable upon the
exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price
(such excess being the "SPREAD"), and (B) with respect to each Right,
make adequate provision to substitute for the shares of Common Stock so
issuable, upon payment of the Purchase Price, (1) cash, (2) other
equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"COMMON STOCK EQUIVALENTS")), (3) debt securities of the Company, (4)
other assets, or (5) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value
has been determined by a majority of the Board of Directors in
accordance with the Company's By-Laws, after receiving advice from a
nationally recognized investment banking firm; provided, however, that
if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"SECTION 11(a)(iii) TRIGGER DATE"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right, shares of
Company Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash shall have an aggregate value equal to
the Spread. To the extent that the Company determines that some action
need be taken pursuant to the first sentence of this Section
11(a)(iii), the Company shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a share of Company
Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of Company Common Stock on the
Section 11(a)(iii) Trigger Date and the value of any common stock
equivalent shall be deemed to have the same value as
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<PAGE> 16
the Company Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Company Common Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) shares of Company Common Stock
(or shares having substantially the same rights, privileges and preferences as
shares of Company Common Stock ("EQUIVALENT COMPANY COMMON STOCK")) or
securities convertible into Company Common Stock or Equivalent Company Common
Stock at a price per share of Company Common Stock or per share of Equivalent
Company Common Stock (or having a conversion price per share, if a security
convertible into Company Common Stock or Equivalent Company Common Stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Company Common Stock on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of Company Common
Stock outstanding on such record date plus the number of shares of Company
Common Stock which the aggregate offering price of the total number of shares of
Company Common Stock and/or Equivalent Company Common Stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Company Common Stock outstanding on
such record date plus the number of additional shares of Company Common Stock
and/or Equivalent Company Common Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by a majority
of the Board of Directors in accordance with the Company's By-Laws, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Company Common Stock owned by or held for the account of the Company or any
Subsidiary shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Company Common Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in shares of Company
Common Stock, but including any dividend payable in shares other than Company
Common Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current market price (as determined pursuant to Section 11(d) hereof) per share
of Company Common Stock on such record date less the fair market value (as
determined in good faith by a majority of the Board of Directors in accordance
with the Company's By-Laws, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holder of the Rights) of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants distributable in
respect of a share of Company Common Stock, and the denominator of which shall
be such current market price (as determined pursuant to Section 11(d) hereof)
per share of Company Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
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<PAGE> 17
(d) For the purpose of any computation hereunder, the "CURRENT
MARKET PRICE" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
shares for the ten consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, if prior to the
expiration of such requisite ten Trading Day period the issuer announces either
(A) a dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then, following the
ex-dividend date for such dividend or the record date for such subdivision, as
the case may be, the "current market price" shall be properly adjusted to take
into account such event. The closing price for each day shall be, if the shares
are listed and admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which such
shares are listed or admitted to trading or, if such shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date such shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by a majority
of the Board of Directors in accordance with the Company's By-Laws. If on any
such date no market maker is making a market in such shares, the fair value of
such shares on such date as determined in good faith by a majority of the Board
of Directors in accordance with the Company's By-Laws shall be used. If such
shares are not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share as determined in good faith by a
majority of the Board of Directors in accordance with the Company's By-Laws
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "TRADING DAY" shall
mean, if such shares are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one-ten thousandth of a Unit or share, as the
case may be, of Company Common Stock or other share. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Company Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Company Common Stock contained in Sections 11(a),
(b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Company Common Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the
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<PAGE> 18
number of Units or shares, as the case may be, of Company Common Stock (or other
securities or amount of cash or combination thereof) that may be acquired from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Units or shares, as the case may be, of Company Common Stock (calculated to the
nearest one ten-thousandth of a Unit or share, as the case may be) obtained by
(i) multiplying (x) the number of Units or shares, as the case may be, of
Company Common Stock covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Units or shares, as the case may be, of Company
Common Stock that may be acquired 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 Units or shares, as the case may be, of Company
Common Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten days later than the date of such public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units or shares, as the case may be, of Company Common
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
Unit and the number of Units of Company Common Stock which were expressed in the
Initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units or
shares, as the case may be, of Company Common 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 such fully paid and non-assessable number of Units or shares, as
the case may be, of Company Common
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<PAGE> 19
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units or shares, as the case may be, of Company Common Stock
and shares of other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of Units or shares, as the case may
be, of Company Common Stock and shares of other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment a majority of
the Board of Directors in accordance with the Company's By-Laws shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Company Common Stock, (ii) issuance wholly for cash of any shares of Company
Common Stock at less than the current market price, (iii) issuance wholly for
cash of shares of Company Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Company Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Company Common
Stock, shall not be taxable to such holders or shall reduce the taxes payable by
such holders.
(n) After the Distribution Date, the Company shall not, except
as permitted by Section 23, 24 or 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Company Common Stock payable in shares
of Company Common Stock, (ii) subdivide the outstanding shares of Company Common
Stock, (iii) combine the outstanding shares of Company Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the number of Rights associated with each share of
Company Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Company Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Company Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts
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<PAGE> 20
accounting for such adjustment, (b) promptly file with the Rights Agent, and
with each transfer agent for the Company Common Stock, a copy of such
certificate, and (c) if Right Certificates have been issued, mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Company Common Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER. (a) In the event that, following the Shares Acquisition
Date, directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(n) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Company Common
Stock shall be converted into or exchanged for shares or other securities of any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) to any Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) (any such event being a "SECTION 13 EVENT"), then, and in
each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with this Agreement, such number of validly authorized and issued,
fully paid and nonassessable shares of Common Stock of the Principal Party (as
such term is hereinafter defined), which shares shall not be subject to any
liens, encumbrances, rights of first refusal, transfer restrictions or other
adverse claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of Units of Company Common Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event and (2) dividing that product by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure that
the provisions of this Agreement shall thereafter be applicable to its shares of
Common Stock thereafter deliverable upon the exchange of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities are so issued, the
Person that is the other party to such
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<PAGE> 21
merger or consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); provided,
however, that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act ("REGISTERED COMMON STOCK"), or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate current market price (determined
pursuant to Section 11(d) hereof); and (4) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
shareholders equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13, and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement under the
Securities Act with respect to the Common Stock that may be acquired upon
exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the requirements of the
Securities Act) until the Expiration Date, and (C) as soon as practicable
following the execution of such agreement, take such action as may be required
to ensure that any acquisition of such Common Stock upon the exercise of the
Rights complies with any applicable state security or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-Laws or other
instrument governing its corporate affairs, which provision would have the
effect of
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<PAGE> 22
(i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of this Section 13; then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by a majority of the Board
of Directors in accordance with the Company's By-Laws. If on any such date no
such market maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by a majority of the Board of Directors
in accordance with the Company's By-Laws shall be used and such determination
shall be described in a statement filed with the Rights Agent and the holders of
the Rights.
(b) The Company shall not be required to issue fractions of
shares of Company Common Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Company Common Stock) upon exercise
of the Rights or to distribute certificates which evidence such fractional
shares of Company Common Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Company Common Stock). In lieu of
such fractional shares of Company Common Stock that are not integral multiples
of one one-hundredth of a share, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the then current market price of
a share of Company Common Stock on the day of exercise, determined in accordance
with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
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<PAGE> 23
SECTION 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of certificates representing shares of Company Common Stock); and any
registered holder of a Rights Certificate (or, prior to the Distribution Date,
of a certificate representing shares of Company Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of a certificate representing shares of
Company 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 or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Company
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 Company Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be 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 any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as promptly as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
shares of Company Common Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a shareholder of the Company or any right to vote for the
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<PAGE> 24
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or,
except as provided in Section 25 hereof, to receive notice of meetings or other
actions affecting shareholders, or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses, including reasonable fees and disbursements of its
counsel, incurred in connection with the execution and administration of this
Agreement and the exercise and performance of its duties hereunder. The Company
shall indemnify the Rights Agent for, and 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 hereunder.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Company 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 have
been signed, executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or shareholder services businesses of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any document or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the
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<PAGE> 25
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the written opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board of Directors, 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; provided, however, that so long as any Person is
an Acquiring Person hereunder, such certificate shall be signed and delivered by
a majority of the Board of Directors in accordance with the Company's By-Laws;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or for 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 failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); 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 Company Common Stock or
any other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Company Common Stock or any other
securities will, when so issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by the
Rights Agent for the performance by the Rights Agent of its duties under 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 of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer; provided, however, that so long as any Person is an Acquiring
Person
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<PAGE> 26
hereunder, the Rights Agent shall accept such instructions and advice only from
a majority of the Board of Directors in accordance with the Company's By-Laws
and shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with such instructions of the majority of the Board of
Directors in accordance with the Company's By-Laws. 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 Rights Agreement and the date on and/or after which
such 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 such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents.
(j) 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 or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to exercise, as the case may be, has either
not been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company. If such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) hereof and shall not be charged with any knowledge to the contrary.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty days' prior notice in writing mailed to the Company, and
to each transfer agent of the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
days' prior notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Company Common
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign of be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after
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<PAGE> 27
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or any state of the United States in good standing, shall be
authorized to do business as a banking institution in the state of New York,
shall be authorized under such laws to exercise corporate trust or share
transfer powers, shall be subject to supervision or examination by federal or
state authorities and shall have at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
corporation described in clause (a). After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Company Common 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.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the Board of
Directors in accordance with the Company's By-Laws to reflect any adjustment or
change made in accordance with the provisions of this Agreement in the Purchase
Price or the number or kind or class of shares or other securities or property
that may be acquired under the Rights Certificates. In addition, in connection
with the issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Board of Directors in accordance with the Company's By-Laws,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section
31 hereof, the Company may, at its option, by action of a majority of the Board
of Directors in accordance with the Company's By-Laws, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following the
Stock Acquisition Date or (ii) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $0.001 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being the "REDEMPTION PRICE"), and the Company may, at its
option, by action of a majority of the Board of Directors in accordance with the
Company's By-Laws, pay the Redemption Price either in shares of Company Common
Stock (based on the "current market price", as defined in Section 11(d) hereof,
of the shares of Company Common Stock at the time of redemption) or cash.
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<PAGE> 28
(b) Immediately upon the action of a majority of the Majority of the
Directors in accordance with the Company's By-Laws ordering the redemption of
the Rights, evidence of which shall be filed with the Rights Agent, and without
any further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. Promptly after the action
of a majority of the Majority of the Directors in accordance with the Company's
By-Laws ordering the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for Company
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
SECTION 24. EXCHANGE. (a) Subject to applicable laws, rules,
and regulations, and subject to subsection (c) below, the Company may, at its
option, by majority vote 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) hereof) for Company Common Stock at
an exchange ratio of one share of Company Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend, or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "RATIO OF EXCHANGE"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company, any Subsidiary of the Company, or any trustee or
fiduciary with respect to such plans, or the trust maintained by the Company's
employee stock ownership plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Company Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Company Common Stock equal to the number
of such Rights held by such holder multiplied by the Ratio of Exchange. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights in accordance with Section 26
hereof. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Company Common Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights that will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares of Company
Common Stock issued but not outstanding, or authorized but unissued, to permit
any exchange of Rights as contemplated in accordance with Section 24(a), the
Company shall either take such action as may be necessary to authorize
additional Company Common Stock for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with
respect to each Right (i) pay cash in an amount equal to the Current Value (as
hereinafter defined), in lieu of issuing Company Common Stock in exchange
therefor, or (ii) issue debt or equity securities or a combination thereof,
having a value equal to the Current Value, in lieu of issuing Company Common
Stock in exchange for each such Right, where the value of such securities shall
be
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<PAGE> 29
determined by a nationally recognized investment banking firm selected by the
Board of Directors, or (iii) deliver any combination of cash, property, Company
Common Stock, and/or other securities having a value equal to the Current Value
in exchange for each Right. For purposes of this Section 24(c) only, the Current
Value shall mean the product of the current per share market price of Company
Common Stock (determined pursuant to Section 11(d) on the date of the occurrence
of the event described above in subparagraph (a)) multiplied by the number of
shares of Company Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available. To the extent that the
Company determines that some action need be taken pursuant to clauses (i), (ii),
or (iii) of this Section 24(c), the Board of Directors may temporarily suspend
the exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional shares of Company Common Stock
and/or to decide the appropriate form of distribution to be made pursuant to the
above provision and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) The Company shall not be required to issue fractions of shares of
Company Common Stock or to distribute certificates which evidence fractional
shares of Company Common Stock. In lieu of such fractional shares of Company
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Company Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value per share of a whole share of Company Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof).
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any dividend
payable in shares of any class to the holders of Company Common Stock or to make
any other distribution to the holders of Company Common Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the
Company), (ii) to offer to the holders of Company Common Stock rights or
warrants to subscribe for or to purchase any additional shares of Company Common
Stock or shares of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Company Common Stock (other than a
reclassification involving only the subdivision of outstanding shares of Company
Common Stock), (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(n) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets or of the Company and
its Subsidiaries (taken as a whole) to any other Person or earning power Persons
(other than the Company and/or any of its Subsidiaries in one or more
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<PAGE> 30
transactions each of which complies with Section 11(n) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Company Common Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Company Common Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Company Common
Stock whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 25, if any Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other transfer of
assets or earnings power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
reasonably practicable thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof.
SECTION 26. NOTICES. All notices and other communications
provided for hereunder shall, unless stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
Michael Baker Corporation
Airport Office Park
Building 3
420 Rouser Road
Coraopolis, Pennsylvania 15108
Attn: Chief Executive Officer
and if to the Rights Agent, at its address at:
American Stock Transfer and Trust Company
40 Wall Street
46th Floor
New York, New York 10005
Attn: Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such older as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
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<PAGE> 31
any holders of certificates representing shares of Company Common Stock. From
and after the Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, however, that
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) subject to Section 31 hereof, a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company or, so long as any Person is an Acquiring
Person hereunder, from the majority of the Board of Directors in accordance with
the Company's By-Laws which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Purchase Price, the Expiration Date or the
number of Units of Company Common Stock for which a Right is exercisable without
the approval of a majority of the Board of Directors in accordance with the
Company's By-Laws. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of
Company Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the Exchange Act Regulations as in effect on the date hereof. Except as
otherwise specifically provided herein, the Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power (i) to
interpret the provisions of this Agreement, and (ii) to make all determinations
deemed necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors in accordance with the Company's
By-Laws in good faith shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board or any member thereof to any liability to the holders of the
Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Company 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
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<PAGE> 32
the Rights Certificates (and, prior to the Distribution Date, registered holders
of shares of Company Common Stock).
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Board of Directors in accordance with the Company's By-Laws determines in
its good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement and the Rights
shall not then be redeemable, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the Close of Business on
the tenth Business Day following the date of such determination by a majority of
the Board of Directors in accordance with the Company's By-Laws.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania applicable to
contracts executed in and to be performed entirely in such Commonwealth.
SECTION 33. COUNTERPARTS. This Agreement may be executed
(including by facsimile) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. The headings contained in
this Agreement are for descriptive purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
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<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the date first above written.
[Corporate Seal] MICHAEL BAKER CORPORATION
Attest:
By By /s/ H. James McKnight
------------------------------ -----------------------------------
Name Name H. James McKnight
------------------------------ -----------------------------------
Title Title Senior Vice President, General
Counsel and Secretary
------------------------------ -----------------------------------
Attest: AMERICAN STOCK TRANSFER AND TRUST COMPANY
By By /s/ Herbert J. Lemmer
------------------------------ -----------------------------------
Name Name Herbert J. Lemmer
------------------------------ -----------------------------------
Title Title Vice President
------------------------------ -----------------------------------
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<PAGE> 34
EXHIBIT A
[Form of Rights Certificate]
Certificate No.______ _____Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]1
Rights Certificate
MICHAEL BAKER CORPORATION
This certifies that______________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of November 16, 1999 (the "RIGHTS AGREEMENT";
terms defined therein are used herein with the same meaning unless otherwise
defined herein) between Michael Baker Corporation, a Pennsylvania corporation
(the "COMPANY"), and American Stock Transfer and Trust Company, as Rights Agent
(which term shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after the Distribution Date
and prior to the Expiration Date at the office of the Rights Agent, one
one-hundredth of a fully paid and non-assessable share of common stock, par
value $1.00 per share (the "COMMON STOCK"), of the Company at the Purchase Price
initially of $27.00 per one one-hundredth share (each such one one-hundredth of
a share being a "UNIT") of Common Stock, upon presentation and surrender of this
Rights Certificate with the Election to Exercise and related certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of Units which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per Unit set forth above shall be subject to adjustment
in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the
Rights evidenced by this Rights Certificate are beneficially owned by an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person or,
under certain circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby
- ---------------------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE> 35
may entitle the registered holder thereof to receive, upon exercise of such
Rights, Common Stock of the Company or cash or other assets, all as provided in
the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
receive, upon exercise of such Rights, capital stock of an entity other than the
Company or cash or other assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms 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. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If this Rights Certificate shall be exercised
in part, the registered 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 under certain
circumstances at its option at a redemption price of $0.001 per Right, payable
at the Company's option in cash or in Common Stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Common Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
-A-2-
<PAGE> 36
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of___________ __, 1999/ 200_.
[Corporate Seal] MICHAEL BAKER CORPORATION
Attest:
By By
------------------------------ -----------------------------------
Name Name
------------------------------ -----------------------------------
Title Title
------------------------------
-----------------------------------
Attest: AMERICAN STOCK TRANSFER AND TRUST COMPANY
By By
------------------------------ -----------------------------------
Name Name
------------------------------ -----------------------------------
Title Title
------------------------------ -----------------------------------
-A-3-
<PAGE> 37
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED_____________hereby sells, assigns and
transfers unto_________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: __________________ __, ____ _____________________________________
Signature
SIGNATURE GUARANTEED:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
______________________________________________
================================================================================
-A-4-
<PAGE> 38
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned, transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement); and
(2) after due diligence and to the best of the knowledge of
the undersigned, it [ ] did[ ] did not acquire the Rights evidenced by this
Rights Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.
SIGNATURE GUARANTEED:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
________________________________________
================================================================================
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above 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 Certificates issued in exchange
for this Rights Certificate.
-A-5-
<PAGE> 39
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To: MICHAEL BAKER CORPORATION
The undersigned hereby irrevocably elects to exercise_______
Rights represented by this Rights Certificate to acquire in exchange for the
surrender of such Rights the Units of Common Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any other person or
other property which may be issuable upon the exercise of the Rights) and
requests that certificates for such Units be issued in the name of and delivered
to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Social Security or Other Tax Payer Identification Number:_______________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Social Security or Other Tax Payer Identification Number:_______________________
Dated: ___________________ __, ____ ________________________________________
Signature
SIGNATURE GUARANTEED:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
__________________________________________
-A-6-
<PAGE> 40
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.
Dated: _____________ __, ____
________________________________
Signature
SIGNATURE GUARANTEED:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
_______________________________________________
================================================================================
NOTICE
The signature in the foregoing Election to Purchase and
Certificate must conform 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 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 Certificates issued in exchange
for this Rights Certificate.
-A-7-
<PAGE> 41
EXHIBIT B
SUMMARY OF RIGHTS TO ACQUIRE
COMMON STOCK
Effective November 11, 1999, the Board of Directors of Michael
Baker Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock, par value $1.00 per share (the "COMPANY
COMMON STOCK"), to shareholders of record at the close of business on November
30, 1999 (the "RECORD DATE") and for each share of Company Common Stock issued
(including shares distributed from treasury) by the Company thereafter and prior
to the Distribution Date. Each Right entitles the registered holder, subject to
the terms of the Rights Agreement (as defined below), to purchase from the
Company one one-hundredth of a share (a "UNIT") of Company Common Stock, at a
Purchase Price of $27.00 per Unit, subject to adjustment. The Purchase Price is
payable in cash or by certified or bank check or money order payable to the
order of the Company. The description and terms of the Rights are set forth in a
Rights Agreement between the Company and American Stock Transfer and Trust
Company, as Rights Agent (the "RIGHTS AGREEMENT").
Copies of the Rights Agreement have been filed with the
Securities and Exchange Commission as exhibits to a Registration Statement on
Form 8-A dated November 16, 1999 (the "FORM 8-A"). Copies of the Rights
Agreement are 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 all the provisions of the Rights Agreement,
including the definitions therein of certain terms, which Rights Agreement is
incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the Company
Common Stock and the "DISTRIBUTION DATE" will occur upon the earlier of (i) 10
business days following a public announcement (the date of such announcement
being the "SHARES ACQUISITION DATE") that a person or group of affiliated or
associated persons (other than the Company, any Subsidiary of the Company, any
employee benefit plan maintained by the Company, any of its subsidiaries or any
trustee of fiduciary with respect to such plans acting in such capacity, or the
trust maintained by the Company's employee stock ownership plan) (an "ACQUIRING
PERSON") has acquired, obtained the right to acquire, or otherwise obtained
beneficial ownership of 25% or more of the then outstanding shares of Company
Common Stock, and (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 25% or more of the
Company Common Stock from time to time outstanding.
Until the Distribution Date, (i) the Rights will be evidenced
by Company Common Stock certificates and will be transferred with and only with
such Company Common Stock certificates,
<PAGE> 42
(ii) new Company Common Stock certificates issued after the Record Date (also
including shares distributed from treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation
in a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) an Acquiring Person becomes the beneficial owner of 25%
or more of the then outstanding shares of Company Common Stock, (iii) an
Acquiring Person engages in one or more "self-dealing" transactions as set forth
in the Rights Agreement, or (iv) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., by means of a reverse stock
split or recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to acquire, upon exercise of such Right, that number
of shares of Company Common Stock (or, in certain circumstances, cash, property
or other securities of the Company) having a value equal to two times the
exercise price of the Right. The exercise price is the Purchase Price multiplied
by the number of Units of Company Common Stock issuable upon exercise of a Right
prior to the events described in this paragraph. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
The Company may, at the Board of Directors' option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (other than those that have become null
and void) for Company Common Stock at an exchange ratio of one share of Company
Common Stock per Right, as adjusted to reflect any stock split, stock dividend,
or similar transaction. The Company may not, however, effect such an exchange
after any Person becomes the owner of 50% or more of the Company's Common Stock.
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation (other
than a merger described in the preceding paragraph), (ii) any Person
consolidates or merges with the Company and all or part of the Company Common
Stock is converted or exchanged for securities, cash or property of any other
Person or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to acquire, upon
exercise of such Right, common stock of the Acquiring Person having a value
equal to two times the exercise price of the Right.
The Purchase Price and the number of Units or shares, as the
case may be, of the Company Common Stock 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 on, or subdivision, combination or reclassification of, the
Company Common Stock, (ii) if holders of the Company Common Stock are granted
certain rights or warrants to subscribe for Company Common Stock or convertible
securities at less than the current market price of the Company Common Stock, or
(iii) upon the distribution to the holders of the Company Common Stock of
evidences of indebtedness, cash or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional Units or shares
of the Company Common Stock. In lieu thereof, an adjustment in cash may be made
based on the market price of the Company Common Stock prior to the date of
exercise or exchange.
-B-2-
<PAGE> 43
At any time until ten business days following the Shares
Acquisition Date, a majority of the Board of Directors in accordance with the
Company's By-Laws may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (subject to adjustment in certain events) (the "REDEMPTION
PRICE"), payable, at the election of such majority of the Board of Directors in
accordance with the Company's By-Laws, in cash or shares of Company Common
Stock. Immediately upon the action of a majority of the Board of Directors in
accordance with the Company's By-Laws ordering the redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof,
as such, will have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to a shareholder or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable or exchangeable for Units or shares of
Company Common Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time prior to
the Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
-B-3-
<PAGE> 1
Exhibit 99
NEWS RELEASE
Contact:
David Higie
E-mail: [email protected]
MICHAEL BAKER CORPORATION
ANNOUNCES ADOPTION OF RIGHTS PLAN
PITTSBURGH, PA (11/16/99) -- Michael Baker Corporation
(Nasdaq-Amex:BKR) announced today that, effective November 11, 1999, its Board
of Directors adopted a Rights Plan and declared a dividend of one share for
each outstanding Common Share of the Company as of the close of business on
November 30, 1999.
Initially, the Rights are not exercisable and certificates
will not be issued. The Rights become exercisable and will trade separately from
the Common Stock following the first public announcement that any person or
group has acquired at least 25% of Michael Baker's outstanding Common Stock, or
following the commencement or the announcement of an intention to commence a
tender offer, which would result in that person or group acquiring beneficial
ownership of at least 25% of the outstanding shares of Common Stock.
"Michael Baker believes Rights Plans have been an effective
tool for many public companies seeking to preserve and enhance shareholder
value," said Richard L. Shaw, chief executive officer. "The Rights Plan will
help us ensure that any proposed transaction involving Michael Baker is in the
best interests of all of our shareholders. The adoption of the plan is not in
response to any specific effort to acquire control of Michael Baker, nor is the
Board aware of any such effort."
Initially, each Right will entitle shareholders to buy one
one-hundredth of a share of the Company's Common Stock at an exercise price of
$27.00.
If any person or group acquires 25% or more of the Company's
Common Stock, the Rights not held by the 25% shareholder would become
exercisable to purchase Michael Baker Common Stock at a 50-percent discount. The
plan provides that, at any time after a person or group acquires 25% of the
Company's Common Stock and prior to the acquisition by that person or
group of 50% or more of the outstanding Common Stock, the board may exchange the
Rights (other than the, which will have become void), at an exchange ratio of
one share of Common Stock per Right.
The Rights will expire on November 16, 2009, unless earlier
redeemed or exchanged by Michael Baker, as provided in the Rights Plan. The
board may elect to redeem the Rights at $0.001 per Right.
Additional details of the Rights Plan are contained in a
letter that will be mailed to Michael Baker's shareholders of record as of
November 30, 1999.
<PAGE> 2
Michael Baker Corporation (www.mbakercorp.com) provides
engineering, construction management, and operations and technical services
through its five global business units: buildings, civil, energy, environmental,
and transportation.
# # # #
Michael Baker Corporation
P.O. Box 12259, Pittsburgh PA 15231
http://www.mbakercorp.com
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