SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
________________________________
STEWART & STEVENSON SERVICES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1051605
(State of Incorporation (I.R.S. Employer
or Organization) Identification Number)
2707 NORTH LOOP WEST
HOUSTON, TEXAS 77008
(Address of principal (Zip code)
Executive Offices
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
_________________________________________ ______________________________
RIGHTS TO PURCHASE SHARES OF COMMON STOCK, NASDAQ NATIONAL MARKET
WITHOUT PAR VALUE
Securities to be registered pursuant to Section 12(g) of the Act: NONE
Item 1. Description of Registrant's Securities to be Registered
_______ _______________________________________________________
On March 7, 1995, the Board of Directors of Stewart & Stevenson Services,
Inc. (the "Company") declared a distribution of one common share purchase right
(a "Right") for each outstanding share of common stock, without par value (the
"Common Shares"), of the Company. The distribution is payable on March 20, 1995
(the "Record Date") to the stockholders of record on that date. As of March 13,
1995, 33,009,635 Common Shares were issued and outstanding. Each Right entitles
the registered holder to purchase from the Company one-third (1/3) of a Common
Share of the Company, at a price of $30 per one-third of a Common Share (the
"Purchase Price"), under certain circumstances and subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") dated March 13, 1995 between the Company and The Bank of New
York, as Rights Agent (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate (defined below) will be distributed. The Rights will separate from
the Common Shares and a Distribution Date will occur upon the earlier of (i) the
tenth day after a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company, or (ii) the tenth business day following the
commencement or announcement of an intention to commence a tender offer or
exchange offer (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or of any subsidiary of the Company, or any
Trustee of or fiduciary with respect to any such plan when acting in such
capacity) the consummation of which would result in the beneficial ownership by
a person or group of 15% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to the Common Shares
outstanding on March 20, 1995, by certificates for outstanding Common Shares and
not by separate certificates evidencing the Rights registered in the name of the
holder thereof with a copy of the summary of rights to purchase Common Shares
included as Exhibit 3 hereto (the "Summary of Rights"), (ii) the Rights will be
transferred with and only with the Common Shares, (iii) new Common Share
certificates issued after March 20, 1995, upon transfer or new issuance of the
Common Shares, will contain a notation incorporating the Rights Agreement by
reference, and (iv) the surrender for transfer of any certificates for Common
Shares outstanding as of March 20, 1995, even without such notation or a copy of
the Summary of Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 20, 2005 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
Subject to action of the Board of Directors of the Company pursuant to
Section 25 of the Rights Agreement, if a person or group were to acquire 15% or
more of the Voting Shares of the Company, each holder of a Right then
outstanding (other than Rights beneficially owned by the Acquiring Person which
would become null and void) shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-thirds of a Common Share for which a Right is then
exercisable, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-thirds of a Common Share for which a Right is then exercisable and
dividing that by (y) 50% of the then current per share market price of the
Company's Common Shares on the date such person became an Acquiring Person.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision will be made so that (i) each holder of a Right (except
as otherwise provided in the Rights Agreement) shall thereafter have the right
to receive, upon the exercise thereof such number of Common Shares of such
acquiring entity (including the Company as successor thereto or as the surviving
corporation), as shall be equal to the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-thirds of a Common Share
for which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to the preceding paragraph) and dividing
that product by (y) 50% of the current per share market price of the Common
Shares of such other person on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter
be liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company (the term "Company,"
as used herein, shall thereafter be deemed to refer to such issuer) and (iii)
such issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions of the Rights Agreement shall thereafter
be applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of securities or property
issuable upon exercise of the Rights, and the Purchase Price payable, are
subject to customary adjustments from time to time to prevent dilution.
The number of outstanding Rights are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or combinations
of the Common Shares occurring, in any such case, prior to the Distribution
Date.
MANDATORY REDEMPTION AND EXCHANGE. At any time after the acquisition by a
person or group of affiliated or associated persons of beneficial ownership of
15% or more of the outstanding Voting Shares of the Company and before the
acquisition by a person or group of 50% or more of the outstanding Voting Shares
of the Company, the Board of Directors may, at its option, issue Common Shares
in mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
for each two Common Shares for which each Right is then exercisable, subject to
adjustment.
REDEMPTION. At any time prior to the first public announcement that a
person or group has become the beneficial owner of 15% or more of the
outstanding Voting Shares, the Board of Directors of the Company may redeem all
but not less than all the then outstanding Rights at a price of $0.01 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders of the Rights,
including an amendment to extend the Final Expiration Date, and, provided a
Distribution Date has not occurred, to extend the period during which the Rights
may be redeemed, except that after the first public announcement that a person
or group has become the beneficial owner of 15% or more of the outstanding
Voting Shares, no such amendment may materially and adversely affect the
interests of the holders of the Rights.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, form of Right
Certificate, form of the Summary of Rights and the specimen of the legend to be
placed on new Common Share certificates, filed as exhibits hereto and
incorporated by reference herein.
Item 2. Exhibits.
_______ _________
1. Rights Agreement, dated as of March 13, 1995, between the Company and
The Bank of New York as Rights Agent, specifying the terms of the Rights, which
includes the form of Right Certificate as Exhibit A and the form of the Summary
of Rights as Exhibit B.
2. Form of Right Certificate (included as Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto). Pursuant to the Rights Agreement, printed
Right Certificates will not be delivered until as soon as practicable after the
Distribution Date.
3. Form of Summary of Rights to Purchase Common Shares (included as
Exhibit B to Rights Agreement filed as Exhibit 1 hereto) which, together with
certificates representing the outstanding Common Shares of the Company, shall
represent the Rights prior to the Distribution Date.
4. Specimen of legend to be placed, pursuant to Section 3(d) of the Rights
Agreement, on all new Common Share certificates issued by the Company after
March 20, 1995 and prior to the Distribution Date upon transfer, exchange or new
issuance.
SIGNATURE
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 hereunto duly authorized.
STEWART & STEVENSON SERVICES, INC.
/s/ Bob H. O'Neal
Date: March 15, 1995 By: ______________________________
Bob H. O'Neal
President and Chief
Executive Officer
EXHIBIT INDEX
Exhibit Number Description
______________ ___________________________________________________________
1 Rights Agreement, dated as of March 13, 1995, between the
Company and The Bank of New York, as Rights Agent, specify-
ing the terms of the Rights, which includes the form of
Right Certificate as Exhibit A and the form of the Summary
of Rights as Exhibit B.
2 Form of Right Certificate (included as Exhibit A to the
Rights Agreement filed as Exhibit 1 hereto). Pursuant to
the rights Agreement, printed Right Certificates will not
be delivered until as soon as practicable after the Distri-
bution Date.
3 Form of Summary of Rights to Purchase Common Shares (in-
cluded as Exhibit B to Rights Agreement filed as Exhibit 1
hereto) which, together with certificates representing the
outstanding Common Shares of the Company, shall represent
the Rights prior to the Distribution Date.
4 Specimen of legend to be placed, pursuant to Section 3(d)
of the Rights Agreement, on all new Common Share certifi-
cates issued by the Company after March 20, 1995 and prior
to the Distribution Date upon transfer, exchange or new
issuance.
STEWART & STEVENSON SERVICES, INC.
and
THE BANK OF NEW YORK
Rights Agent
RIGHTS AGREEMENT
Dated as of March 13, 1995
TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . 10
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . 12
Section 5. Execution, Authentication and Delivery . . . . . . . . . . . . 14
Section 6. Registration, Registration of Transfer and Exchange . . . . . . 15
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates . . . 16
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights . 18
Section 9. Cancellation of Right Certificates . . . . . . . . . . . . . . 19
Section 10. Authorization of Shares . . . . . . . . . . . . . . . . . . . . 19
Section 11. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12. Adjustment of Purchase Price,
Number of Shares or Number of Rights . . . . . . . . . . . . . 21
Section 13. Certificate of Adjusted Purchase Price or Number of Shares . . 30
Section 14. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . . . . . . . . . . . . . . 30
Section 15. Fractional Rights and Fractional Shares . . . . . . . . . . . . 32
Section 16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . 34
Section 17. Agreement of Right Holders . . . . . . . . . . . . . . . . . . 35
Section 18. Right Certificate Holder Not Deemed a Stockholder . . . . . . . 36
Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . 36
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . 37
Section 21. Merger or Consolidation or Change of Name of Rights Agent . . . 41
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . 42
Section 23. Issuance of New Right Certificates . . . . . . . . . . . . . . 44
Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 25. Mandatory Redemption and Exchange . . . . . . . . . . . . . . . 45
Section 26. Notice of Certain Events . . . . . . . . . . . . . . . . . . . 47
Section 27. Securities Laws Registrations . . . . . . . . . . . . . . . . . 48
Section 28. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 29. Supplements and Amendments . . . . . . . . . . . . . . . . . . 50
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 31. Benefits of this Agreement . . . . . . . . . . . . . . . . . . 51
Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 34. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 35. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . 52
Exhibits
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
This Rights Agreement, dated as of March 13, 1995, is between Stewart &
Stevenson Services, Inc., a Texas corporation (the "Company"), and The Bank of
New York, a New York banking corporation, as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the Holders of record of
Common Shares of the Company outstanding on March 20, 1995 of one Right with
respect to each Common Share of the Company outstanding on March 20, 1995, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between March 20, 1995 and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date; and
WHEREAS, the Board of Directors of the Company has authorized and directed
that the terms and conditions under which the Rights are to be distributed,
including without limitation those affecting the exercise thereof, the
securities or other property to be acquired thereby and the purchase price to be
paid therefor, shall be set forth in a written agreement between the Company and
a rights agent made for the benefit of the holders of the Rights to the extent
so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Voting Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any trustee of or fiduciary
with respect to any such plan when acting in such capacity. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Voting Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Voting Shares of the Company then
outstanding; provided, however, that, if a Person shall become the Beneficial
Owner of 15% or more of the Voting Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company and at a time when such Person is the Beneficial Owner of 15% or
more of the Voting Shares of the Company then outstanding, become the Beneficial
Owner of any additional Voting Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person". 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 prior sentence of
this paragraph, has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the prior
sentence of this paragraph, then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
"Agreement" shall mean this Rights Agreement as hereafter amended from time
to time.
"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 in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"own beneficially" any securities that (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of either Section
13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding, voting or
disposing of any securities of the Company; provided, however, that, for
purposes of each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; and provided, further, that, for purposes of each
clause of this definition, a Person shall not be deemed the Beneficial Owner of,
or to own beneficially, any security as a result of any agreement, arrangement
or understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report).
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding", when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of Texas are authorized or obligated by
law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Houston time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Houston time, on the next succeeding Business Day.
"Closing Price", with respect to any security, shall mean the last sale
price, regular way, on a specific Trading Day or, in case no such sale takes
place on such Trading Day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such security is not then listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such security is
listed or admitted to trading or, if such security is not then 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 Quotations System or such other system then in use, or,
if on any such Trading Day such security is 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 security selected by the Board of Directors
of the Company. If such security is not publicly held or so listed or traded,
"Closing Price" shall mean the fair value per unit of such security as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described and the Closing Price set forth in a statement
filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall mean shares
of capital stock of the Company which have no preference over any other class of
stock with respect to dividends or assets, which are not redeemable at the
option of the Company and with respect to which no sinking, purchase or similar
fund is provided and shall initially mean the shares of Common Stock, without
par value, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a corporation,
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person and,
if used with reference to any other Person, mean the equity interest in such
Person (or, if the net worth determined in accordance with generally accepted
accounting principles of another Person (other than an individual) which
controls such first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting power or managerial
power with respect to the business and affairs of such Person.
"Company" shall mean Stewart & Stevenson Services, Inc., a Texas
corporation, and its successors.
"Company Order" means a written request or order signed in the name of the
Company by its Chairman of the Board, its President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Rights Agent.
"Corporate Trust Office" means the principal office of the Rights Agent at
which it administers its corporate trust business, which, in the case of The
Bank of New York shall, until hereafter changed, be its office at 101 Barclay
Street, New York, New York 10286, attention: Equity Tender and Exchange
Department.
"Distribution Date" shall mean the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (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) after the date of commencement by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity) of, or
after the date of the first public announcement of the intent of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of 15% or more of the then outstanding
Voting Shares of the Company; provided, however, that an occurrence described in
clause (ii) of this definition above shall not cause the occurrence of the
Distribution Date if the Board of Directors of the Company shall, prior to such
tenth Business Day (or such later date as described in clause (ii) above),
determine that such tender or exchange offer is spurious, unless, thereafter,
the Board of Directors of the Company shall make a contrary determination, in
which event the Distribution Date shall occur on the later to occur of such
tenth Business Day (or such later date as described in clause (ii) above) and
the date of such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on March 20, 2005.
"Person" shall mean any individual, firm, corporation, partnership, limited
partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean the initial price at which the holder of a
Right may, subject to the terms and conditions of this Agreement, purchase one
one-third (1/3) of a Common Share (which initial price is set forth in Section
8(b) hereof), as such price shall be adjusted pursuant to the terms of this
Agreement.
"Redemption Date" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein or the time at which all of the Rights are
mandatorily redeemed and exchanged pursuant to Section 25 hereof.
"Redemption Price" shall have the meaning specified in Section 24(b)
herein.
"Right" shall mean one Common Share purchase right which initially
represents the right of the registered holder thereof to purchase one one-third
(1/3) of a Common Share upon the terms and subject to the conditions herein set
forth.
"Right Certificate" shall mean a certificate, in substantially the form of
Exhibit A attached to this Rights Agreement, evidencing the Rights registered in
the name of the holder thereof.
"Rights Agent" shall mean The Bank of New York, a New York banking
corporation, and any successor thereto appointed in accordance with the terms
hereof, in its capacity as agent for the Company and the holders of the Rights
pursuant to this Agreement.
"Rights Register" and "Rights Registrar" shall have the meanings specified
in Section 6.
"Shares Acquisition Date" shall mean the first date of public announcement
(which for purposes of this definition shall include without limitation a report
filed pursuant to Section 13(d) or Section 16(a) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the outstanding capital stock or other equity interests
having ordinary voting power in the election of directors or similar officials
is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase Common
Shares in substantially the form attached as Exhibit B to this Agreement.
"Trading Day" shall mean a day on which the principal national securities
exchange on which any of the Voting Shares of the Company are listed or admitted
to trading is open for the transaction of business or, if none of the Voting
Shares of the Company is listed or admitted to trading on any national stock
exchange, a Business Day.
"Voting Shares" shall mean (i) the Common Shares of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Shares in
respect of any merger or consolidation of the Company, any sale of all or
substantially all of the Company's assets or any liquidation, dissolution or
winding up of the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a specified
percentage of such Voting Shares is, was or will be beneficially owned or has
been voted, tendered, acquired, sold or otherwise disposed of or a determination
of whether a Person has offered or proposed to acquire a number of Voting Shares
comprising such specified percentage, the number of Voting Shares comprising
such specified percentage of Voting Shares shall in every such case be deemed to
be the number of Voting Shares comprising the specified percentage of all the
Company's then outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any corporation or other
entity all the outstanding capital stock or other equity interests of which
having ordinary voting power in the election of directors or similar officials
(other than directors' qualifying shares or similar interests) are owned,
directly or indirectly, by such Person.
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. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) From and after March 20, 1995
until the Distribution Date, (i) outstanding Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the certificates for
outstanding Common Shares of the Company and not by separate Right Certificates,
and (ii) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares of the Company. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company, a
Right Certificate evidencing one Right for each Common Share so held. From and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On March 27, 1995, or as soon thereafter as practicable, the Company
will send a copy of a Summary of Rights, by first-class, postage-prepaid mail,
to each record holder of Common Shares of the Company as of the Close of
Business on March 20, 1995, at the address of such holder shown on the stock
transfer records of the Company. With respect to Common Shares outstanding on
March 20, 1995, the certificates evidencing such Common Shares shall, together
with copies of such Summary of Rights, thereafter also evidence the outstanding
Rights (as such Rights may be amended or supplemented) distributed with respect
thereto until the earlier of the Distribution Date or the date of surrender
thereof to the Company's transfer agent for registration of transfer or exchange
of Common Shares. Until the Distribution Date (or, if earlier, the Redemption
Date or Final Expiration Date), the surrender for registration of transfer or
exchange of any certificate for Common Shares outstanding as of the Close of
Business on March 20, 1995, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the surrender for registration of
transfer or exchange of the outstanding Rights associated with the Common Shares
represented thereby.
(c) The Company agrees that, at any time after March 20, 1995 and prior to
the Distribution Date (or, if earlier, the Redemption Date or Final Expiration
Date) at which it issues any of its Common Shares upon original issue or out of
treasury, it will concurrently distribute to the holder of such Common Shares
one Right for each such Common Share, which Right shall be subject to the terms
and provisions of this Agreement and will evidence the right to purchase the
same number of one one-third (1/3) of a Common Share at the same Purchase Price
as the Rights then outstanding.
(d) Certificates for Common Shares issued after March 20, 1995 but prior
to the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date, whether upon registration of transfer or exchange of Common
Shares outstanding on March 20, 1995 or upon original issue or out of treasury
thereafter, shall have impressed on, printed on, written on or otherwise affixed
to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Stewart & Stevenson Services,
Inc. and The Bank of New York, dated as of March ___, 1995 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of Stewart &
Stevenson Services, Inc. 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. Stewart & Stevenson Services,
Inc. will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As described in the
Rights Agreement, Rights issued to or acquired by any Acquiring Person or any
Affiliate or Associate thereof (each as defined in the Rights Agreement) shall,
under certain circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares after
March 20, 1995, but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. Form of Right Certificates. The form of Right Certificates
(and the forms of election to purchase Common Shares (or other securities) and
of assignment to be printed on the reverse thereof) shall in form and substance
be substantially the same as 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, as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed or as may be necessary to conform to usage. The Right
Certificates shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 23
hereof, the Right Certificates, whenever issued, shall be dated as of the date
of authentication thereof, but, regardless of any adjustments of the Purchase
Price or the number of Common Shares (or other securities) as to which a Right
is exercisable (whether pursuant to this Agreement or any future amendments or
supplements to this Agreement), or both, occurring after March 20, 1995 and
prior to the date of such authentication, such Right Certificates may, on their
face, without invalidating or otherwise affecting any such adjustment, expressly
entitle the holders thereof to purchase such number of Common Shares at the
Purchase Price per one one-third (1/3) of a Common Share as to which a Right
would be exercisable if the Distribution Date were March 20, 1995; no adjustment
of the Purchase Price or the number of Common Shares (or other securities) as to
which a Right is exercisable, or both, effected subsequent to the date of
authentication of any Right Certificate shall be invalidated or otherwise
affected by the fact that such adjustment is not expressly reflected on the face
or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company may
execute, and upon Company Order the Rights Agent shall authenticate and send, at
the Company's expense, by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares of the Company as of the Close of Business on the
Distribution Date, temporary Right Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Right Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Right Certificates may determine, as evidenced by their
execution of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Right Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, 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 Right Certificates may be manual or
facsimile.
Right Certificates bearing the manual or facsimile signatures of
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 authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such Right
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Rights Agent by manual signature of an authorized
signatory, which need not be the same authorized signatory for all of the Right
Certificates, and such certificate upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has been
duly authenticated and delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From and
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date, the Company shall cause to be kept at the Corporate
Trust Office of the Rights Agent a Rights Register (a "Rights Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Right Certificates and of transfers of
Rights. The Rights Agent is hereby appointed the registrar and transfer agent
(the "Rights Registrar") for the purpose of registering Right Certificates and
transfers of Rights as herein provided and the Rights Agent agrees to maintain
such Rights Register in accordance with such regulations so long as it continues
to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for other
Right Certificates upon surrender of the Right Certificates to be exchanged to
the Rights Agent. Whenever any Right Certificates are so surrendered for
exchange, the Company shall execute, and the Rights Agent shall authenticate and
deliver, the Right Certificates which the holder making the exchange is entitled
to receive.
All Right Certificates issued upon any registration of transfer or exchange
of Right Certificates shall be the valid obligations of the Company, evidencing
the same Rights, and entitled to the same benefits under this Agreement, as the
Right Certificates surrendered upon such registration of transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment by the
holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Right Certificates, other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates. If
any mutilated Right Certificate is surrendered to the Rights Agent, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, the Company shall execute and the Rights Agent shall
authenticate and deliver in exchange therefor a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at its Corporate Trust Office, together with payment of the
Purchase Price for each one one-third (1/3) of a Common Share (or other
securities) as to which the Rights are exercised, at or prior to the earliest of
(i) the Close of Business on the Final Expiration Date, (ii) the time of
redemption on the Redemption Date or (iii) the time at which such Rights are
mandatorily redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-third (1/3) of a Common Share
pursuant to the exercise of a Right shall initially be thirty dollars ($30),
shall be subject to adjustment from time to time as provided in Sections 12 and
14 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the securities to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 10 in cash, or by certified check or
cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Common Shares
(or other securities) certificates for such number of one one-third (1/3) of a
Common Share (or other securities) as are to be purchased and registered in such
name or names as may be designated by the registered holder of such Right
Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 15, (iii) promptly after receipt of such certificates
registered in such name or names as may be designated by such holder, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equal to the Rights remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 15 hereof.
Section 9. Cancellation of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer or exchange shall, if
surrendered to the Company or to any of its other agents, be delivered to the
Rights Agent for such purpose and for cancellation or, if surrendered to the
Rights Agent for such purpose, shall be cancelled by it. No Right Certificates
shall be authenticated in lieu of or in exchange for any Right Certificates
cancelled as provided in this Section 9 except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation, and the Rights Agent shall so cancel, any other Right
Certificate purchased or acquired by the Company. The Rights Agent shall
deliver all cancelled Right Certificates to the Company.
Section 10. Authorization of Shares. The Company shall not be required to
reserve and keep available out of its authorized and unissued Common Shares or
any Common Shares held in its treasury, the number of Common Shares that will be
sufficient to permit the exercise of outstanding Rights pursuant to the
adjustments set forth in Section 12(a)(ii) or Section 14 or otherwise until such
time as the Rights become exercisable.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Common Shares of the Company issued upon
exercise of Rights shall (subject to payment of the Purchase Price) be duly
authorized, validly issued, fully paid and nonassessable. The Company further
covenants and agrees that it will pay when due and payable any and all federal
and state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Common Shares of the
Company upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates for Common Shares of the Company upon
exercise of Rights evidenced by Right Certificates in a name other than that of,
the registered holder of the Right Certificate evidencing Rights surrendered for
transfer or exercise or to issue or deliver any certificates for Common Shares
of the Company upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender thereof) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate for
Common Shares of the Company is issued upon the exercise of, or upon mandatory
redemption and exchange of, Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares represented thereby on, and
such certificate shall be dated, (i) in the case of the exercise of Rights, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made, or (ii) in the case of the mandatory redemption and exchange of
Rights, the date of such mandatory redemption and exchange; provided, however,
that, if the date of such surrender and payment or mandatory redemption and
exchange is a date upon which the transfer books of the Company for its Common
Shares are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open. Prior to the
exercise of (or the mandatory redemption and exchange of) the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Common Shares of the Company for which the Rights shall be
exercisable, including without limitation the rights 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 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on the
Common Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares, (C) combine the outstanding Common Shares into a smaller number of
Common Shares or (D) issue any shares of its capital stock in a reclassification
of the Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 12(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 capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised thereafter
shall be entitled to receive, upon payment of the Purchase Price for the number
of one one-thirds of a Common Share for which a Right was exercisable
immediately prior to such date, the aggregate number and kind of shares of
capital stock which, if such Right had been duly exercised immediately prior to
such date (at a time when the Common Shares transfer books of the Company were
open), such holder would have acquired upon such exercise and been entitled to
receive upon payment or effectuation of such dividend, subdivision, combination
or reclassification. If an event occurs which would require an adjustment under
both Section 12(a)(i) and Section 12(a)(ii), the adjustment provided for in this
Section 12(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors of the Company pursuant
to Section 25 of this Agreement, if any Person shall become an Acquiring Person,
each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thirds of a Common Share for which a Right is then
exercisable, in accordance with the terms of this Agreement, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thirds of a
Common Share for which a Right is then exercisable and dividing that product by
(y) 50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 12(d)) on the date such Person became an
Acquiring Person. If any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
Notwithstanding any other provision of this Agreement, from and after the
time any Person shall become an Acquiring Person, any Rights that are or were
acquired or beneficially owned by any such Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be null and void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
this Agreement that represents Rights beneficially owned by an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or by any
Associate or Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights would be
null and void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such) of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be null
and void pursuant to the preceding sentence or to any Associate or Affiliate
thereof or to any nominee (acting in its capacity as such) of such Acquiring
Person, Associate or Affiliate shall be cancelled.
(iii) In the event that there shall not be sufficient issued but not
outstanding, or authorized but unissued, Common Shares to permit the exercise or
exchange in full of all outstanding Rights in accordance with the foregoing
subparagraph (ii) or Section 25, the Company shall either (i) call a meeting of
shareholders seeking approval to cause sufficient additional shares to be
authorized and take all such additional action as is within its power to provide
for the authorization of such additional shares (provided that if such approval
is not obtained the Company will take the action specified in clause (ii) of
this sentence) or (ii) take such action as shall be necessary to ensure and
provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Shares Acquisition Date to which the Company is a
party, that each Right shall thereafter constitute the right to receive, in the
Company's discretion, either (x) in return for the Purchase Price, debt or
equity securities (including, in the Company's discretion, any available Common
Shares) or other assets (or a combination thereof) having a fair value equal to
twice the Purchase Price, or (y) if the Company elects to exchange the Rights in
accordance with Section 25, debt or equity securities (including, in the
Company's discretion, any available Common Shares) or other assets (or a
combination thereof) having a fair value equal to the product of the current per
share market price of a Common Share as of the Shares Acquisition Date
(determined pursuant to Section 12(d)) multiplied by the number of Common Shares
that the holder of the Rights would be entitled to receive from the Company in
mandatory redemption of, and in exchange for, the outstanding Rights pursuant to
Section 25, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common shares")) or securities
convertible into or exchangeable for Common Shares or equivalent common shares
at a price per Common Share or equivalent common share (together with any
additional consideration required upon conversion or exchange in the case of a
security convertible into or exchangeable for Common Shares or equivalent common
shares), less than the current per share market price of the Common Shares
(determined pursuant to Section 12(d) on such record date), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares and/or equivalent common shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent common
shares to be offered for subscription or purchase (or into or for which the
convertible or exchangeable securities so to be offered are initially
convertible or exchangeable). In case all or part of such subscription or
purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Common Shares owned by or held for the account of the Company
or any of its Subsidiaries shall not be deemed outstanding for the purpose of
any computation described in this Section 12(b). The adjustment described in
this Section 12(b) shall be made successively whenever such a record date is
fixed; and, if none of such rights, options or warrants is 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) If the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Common Shares) or subscription rights or warrants (excluding those referred to
in Section 12(b)), 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
then current per share market price of the Common Shares (determined pursuant to
Section 12(d)) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Common Share and the denominator of which
shall be such current per share market price of the Common Shares. Such
adjustments shall be made successively whenever such a record date is fixed;
and, if such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of the Common Shares on any date shall be deemed to be the average
of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market price per Common
Share equivalent.
(e) 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
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share, as the case may be, and references herein to the "number
of Common Shares" (or similar phrases) shall be construed to include fractions
of a Common Share. Notwithstanding the first sentence of this Section 12(e),
any adjustment required by this Section 12 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the thirtieth day preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Common Shares, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in this Section 12, and the provisions of this Agreement, including without
limitation Sections 8, 10, 11 and 14, with respect to the Common Shares 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, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thirds of a Common Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 12(i), upon each adjustment of the Purchase Price pursuant to Section
12(b) or 12(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price per one one-third of a Common Share, that number of one one-
thirds of a Common Share obtained by (i) multiplying (x) the number of
one-thirds of a share covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of one one-thirds of a Common Share purchasable upon
the exercise of a Right. Each Right outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-thirds of a
Common Share for which a Right was exercisable immediately prior to such
adjustment of the Purchase Price. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement, along with simultaneous written notice
to the Rights Agent, 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 Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. Until such record date, however, any adjustment in the number of
one one-thirds of a Common Share for which a Right shall be exercisable made as
required by this Agreement shall remain in effect. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 12(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 15 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 Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and authenticated in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thirds of a Common Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-thirds of a Common Share
which were expressed in the initial Right Certificates issued hereunder.
(k) In any case in which this Section 12 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 the
Common Shares or other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common Shares or 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
securities upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Common Shares, issuance wholly
for cash of any of the Common Shares at less than the current market price,
issuance wholly for cash of Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, dividends on Common Shares
payable in Common Shares or issuance of rights, options or warrants referred to
in subsection (b) of this Section 12, hereafter effected by the Company to
holders of its Common Shares shall not be taxable to such shareholders.
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares of
the Company a copy of such certificate and (c) mail a brief summary thereof to
each holder of record of a Right Certificate in accordance with Section 28
hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. If, directly or indirectly, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall merge with and into
the Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with any such merger, all or part of the Common
Shares of the Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (c) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of two or
more transactions, assets of the Company or its Subsidiaries which constitute
more than 50% of the assets or which produce more than 50% of the earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or any
Affiliate or Associate of such Person other than the Company or one or more of
its Wholly-Owned Subsidiaries, then, and in each such case, the Company agrees
that, as a condition to engaging in any such transaction, it will make or cause
to be made proper provision so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof in accordance with the terms of this Agreement, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) or, if such other Person is a Subsidiary of
another Person, of the Person or Persons (other than individuals) which
ultimately control such first-mentioned Person, as shall be equal to the result
obtained by (X) multiplying the then current Purchase Price by the number of one
one-thirds of a Common Share for which a Right is then exercisable (without
taking into account any adjustment previously made pursuant to Section
12(a)(ii)) and dividing that product by (Y) 50% of the current per share market
price of the Common Shares of such other Person (determined pursuant to Section
12(d)) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company", as used herein, shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including without limitation
the reservation of a sufficient number of shares of its Common Shares in
accordance with Section 10) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not enter into
any transaction of the kind referred to in this Section 14 if at the time of
such transaction there are outstanding any rights, warrants, instruments or
securities or any agreement or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The Company shall
not consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent an agreement supplemental to this Agreement complying with the
provisions of this Section 14. The provisions of this Section 14 shall
similarly apply to successive mergers or consolidations or sales or other
transfers. For the purposes of this Section 14, 50% of the assets of the
Company and its Subsidiaries shall be determined by reference to the book value
of such assets as set forth in the most recent consolidated balance sheet of the
Company and its Subsidiaries (which need not be audited) and 50% of the earning
power of the Company and its Subsidiaries shall be determined by reference to
the mathematical average of the operating income resulting from the operations
of the Company and its Subsidiaries for the two most recent full fiscal years as
set forth in the consolidated and consolidating financial statements of the
Company and its Subsidiaries for such years; provided, however, that, if the
Company has, during such period, engaged in one or more transactions to which
purchase accounting is applicable, such determination shall be made by reference
to the pro forma operating income of the Company and its Subsidiaries giving
effect to such transactions as if they had occurred at the commencement of such
two-year period.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of this Section 15(a), the current
market value of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable.
(b) The Company shall not be required to issue fractions of Common Shares
(other than fractions which are integral multiples of one one-third of a Common
Share) upon exercise of the Rights or to distribute scrip or certificates which
evidence fractional Common Shares (other than fractions which are integral
multiples of one one-third of a Common Share). If, on the Distribution Date or
thereafter, a Person would otherwise be entitled to receive a fractional Common
Share (other than fractions which are integral multiples of one one-third of a
Common Share), the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided an amount in cash equal to the
same fraction (which is not an integral multiple of one one-third of a Common
Share) of the current market value of one Common Share. For purposes of this
Section 15(b), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute scrip or certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and exchange, a
Person would otherwise be entitled to receive a fractional Common Share of the
Company upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise or
mandatory redemption and exchange of a Right (except as provided above).
Section 16. Rights of Action. (a) All rights of action in respect of the
obligations and duties owed to the holders of the Rights under this Agreement
are vested in the registered holders of the Rights; and, without the consent of
the Rights Agent or of the holder of any other Rights, any registered holder of
any Rights may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding, judicial or otherwise,
against the Company to enforce, or otherwise to act in respect of, such holder's
right to exercise such Rights in the manner provided in the Right Certificate
evidencing such Rights and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
(b) No right or remedy herein conferred upon or reserved to the registered
holder of Rights is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy, whether hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy or
constitute a waiver of any default hereunder or an acquiescence therein. Every
right and remedy given hereunder or by law to such holders may be exercised from
time to time, and as often as may be deemed expedient, by such holders.
Section 17. Agreement of Right 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 the Common Shares of the Company;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the Corporate
Trust Office of the Rights Agent duly endorsed or accompanied by a proper
instrument of transfer, along with such other and further documentation as the
Rights Agent may reasonably request;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court 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 that the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right (whether or not then evidenced by a Right Certificate)
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of Common Shares of the Company or any other securities of the Company
which may at any time be issuable on the exercise (or mandatory redemption and
exchange) of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon any such holder, as
such, any of the rights of a stockholder of the Company, including without
limitation any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, to give or withhold consent to
any corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26) or to receive dividends or
subscription rights until the Right or Rights evidenced by such Right
Certificate shall have been exercised (or mandatorily redeemed and exchanged) in
accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and expenses and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
The 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 Right Certificate or
certificate for Common Shares of the Company or other securities of the Company,
Company Order, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
executed by the proper person or persons and, where necessary, verified or
acknowledged, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
The provisions of this Section 19 shall survive the expiration of the
Rights and the termination of this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or any other
Person 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 Right
Certificates (except its authentication thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any responsibility with respect to the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or with respect to the validity or
execution of any Right Certificate (except its authentication thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable; nor
shall the Rights Agent be responsible for the legality of the terms hereof in
its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and 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 or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the date on
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 such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any 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.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss of the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the portion of the form of assignment or form of
election to purchase (as the case may be) certifying that the Rights are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
has not been completed or indicates that such Rights are beneficially owned by
such Person, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without the written consent of the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment and the form
of election to exercise attached to any Right Certificate unless the Rights
Agent shall have actual knowledge that, as executed, such certification is
untrue, or (ii) the non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice of
any event or ownership which would prohibit the exercise or transfer of the
Right Certificates.
Section 21. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then the
Rights Agent or any registered holder of a Right Certificate (or, prior to the
Distribution Date, of Common Shares) 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
corporation organized and doing business under the laws of the United States or
of any state of the United States, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million. 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 for the Common Shares of the
Company and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 23. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of the
Board of Directors of the Company pursuant to paragraph (b) of this Section 24,
or may be redeemed and exchanged by action of the Board of Directors of the
Company pursuant to Section 25 herein, but shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at any time
prior to the time any Person becomes an Acquiring Person redeem all but not less
than all the then outstanding Rights at a redemption price of one cent ($0.01)
per Right then outstanding, appropriately adjusted to reflect any adjustment in
the number of Rights outstanding pursuant to Section 12(i) herein (such
redemption price being hereinafter referred to as the "Redemption Price"). Any
such redemption of the Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(c) The right of the registered holders of Right Certificates to exercise
the Rights evidenced thereby or, if the Distribution Date has not theretofore
occurred, the inchoate right of the registered holders of Rights to exercise the
same shall, without notice to such holders or to the Rights Agent and without
further action, terminate and be of no further force or effect effective as of
the time of adoption by the Board of Directors of the Company of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph (b)
of this Section 24 (or, alternatively, if the Board of Directors qualified such
action as to time, basis or conditions, then at such time, on such basis and
with such conditions as the Board of Directors may have established pursuant to
such paragraph (b)); thereafter, the only right of the holders of Rights shall
be to receive the Redemption Price. The Company shall promptly give public
notice of any redemption resolution pursuant to paragraph (b) of this Section
24; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within 10 days after
the adoption of any redemption resolution pursuant to paragraph (b) of this
Section 24, the Company shall give notice of such redemption to the Rights Agent
and to the holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agents for the Common Shares. 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 shall state the method by which the
payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24 or in Section 25 herein, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person becomes an
Acquiring Person, issue Common Shares of the Company in mandatory redemption of,
and in exchange for, all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become null and void pursuant to the
provisions of Section 12(a)(ii) hereof) at an exchange ratio of one Common Share
for each two Common Shares for which each Right is then exercisable pursuant to
the provisions of Section 12(a)(ii) hereof. Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such redemption and exchange
at any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any such Subsidiary, or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 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 such number of Common
Shares as is provided in paragraph (a) of this Section 25. The Company shall
promptly give public notice of any such redemption and exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption and exchange. The Company promptly shall
mail a notice of any such redemption and exchange to the Rights Agent and to all
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of mandatory redemption and exchange shall state the
method by which the redemption and exchange of the Common Shares for Rights will
be effected and, in the event of any partial redemption and exchange, the number
of Rights which will be redeemed and exchanged. Any partial redemption and
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) held by each holder of Rights.
Section 26. Notice of Certain Events. If the Company shall, on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Common Shares, (b) to offer to the holders of its Common
Shares rights, options or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other
securities, rights, options or warrants, (c) to make any other distribution to
the holders of its Common Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
(e) to effect any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (determined as provided in
Section 14 herein) to, any other Person (other than the Company or a Wholly-
Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to effect the liquidation,
dissolution or winding up of the Company or (g) if the Rights have theretofore
become exercisable with respect to Common Shares pursuant to Section 12(a)(ii)
herein, to declare or pay any dividend or other distribution on the Common
Shares payable in Common Shares or in stock of any other class of the Company or
any Subsidiary of the Company or to effect a subdivision or combination of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares) then, in each such case, the Company shall give to the Rights
Agent and to each holder of a Right Certificate, in accordance with Section 28
hereof, notice of such proposed action, which shall specify the date of
authorization by the Board of Directors of the Company of, and record date for,
such stock dividend or such distribution of rights or warrants or the date on
which such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up, subdivision or combination is to take place and the
date of participation therein by the holders of the Common Shares of the Company
if any such date is to be fixed. Such notice shall be so given in the case of
any action covered by clause (a), (b), (c) or (g) above at least 20 days prior
to the record date for determining holders of the Common Shares of the Company,
for purposes of such action, and in the case of any such other action, at least
20 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares of the Company,
whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 28 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 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Common Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Common Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Common Shares,
the Company agrees that it will, to the extent legally required, promptly
thereafter prepare and file, or cause to be prepared and filed, and will use its
best efforts to cause to be declared effective, a registration statement under
such Act registering the offering, sale and delivery of such other securities
and the Company will, thereafter, use its best efforts to maintain such
registration statement (or another) continuously in effect so long as any
outstanding Rights are exercisable with respect to such securities. The Company
further agrees to use its best efforts, from and after the Distribution Date, to
qualify or register for sale the Common Shares or other securities of the
Company or one of its Subsidiaries issuable upon exercise of the Rights under
the securities or "blue sky" laws (to the extent legally required thereunder) of
all jurisdictions in which registered holders of Right Certificates reside
determined by reference to the Rights Register.
Section 28. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Stewart & Stevenson Services, Inc.
2707 N. Loop West
P.O. Box 1637
Houston, Texas 77251
Attention: Secretary
Any notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Equity Tender and Exchange 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 Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, to make any other provisions in
regard to matters or questions arising hereunder, or to add, delete, modify or
otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date and,
provided that at the time of such amendment or supplement the Distribution Date
has not occurred, the period during which the Rights may be redeemed; provided,
however, that, from and after such time as any Person becomes an Acquiring
Person, any such amendment or supplement shall not materially and adversely
affect the interests of the holders of Right Certificates. Without limiting the
foregoing, the Board of Directors of the Company may by resolution adopted at
any time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the threshold set forth in the definitions of Acquiring
Person and Distribution Date herein from 15% to a percentage not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding Voting Shares then known to the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any trustee
of or fiduciary with respect to any such plan when acting in such capacity), and
(ii) 10% if the Board of Directors shall determine that a Person whose interests
are adverse to the Company and its shareholders may seek to acquire control of
the Company.
Notwithstanding any other provision hereof, the Rights Agent's consent must
be obtained regarding any amendment or supplement pursuant to this Section 29
which alters the Rights Agent's rights or duties.
Section 30. 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 31. 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 any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.
Section 32. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Texas and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York.
Section 34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
STEWART & STEVENSON SERVICES, INC.
Attest:
/s/ Lawrence E. Wilson /s/ Robert L. Hargrave
By ___________________________ By ______________________________
Title: Secretary Title: Vice President and
Treasurer
THE BANK OF NEW YORK
As Rights Agent
Attest:
/s/ Josephine Bishop /s/ John I Sivertsen
By ___________________________ By ______________________________
Title: Authorized Officer Authorized Officer
Josephine Bishop John I. Sivertsen
Assistant Treasurer Vice President
EXHIBIT A
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER MARCH 20, 2005 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN SECTION 1 OF THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
Right Certificate
STEWART & STEVENSON SERVICES, INC.
This certifies that _____________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of March ___, 1995 (the "Rights Agreement"),
between STEWART & STEVENSON SERVICES, INC., a Delaware corporation (the
"Company"), and THE BANK OF NEW YORK (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m., Houston, Texas time, on March 20,
2005, at the Corporate Trust Office of the Rights Agent (or at the office of its
successor as Rights Agent), one one-third (1/3) of a fully paid non-assessable
share of Common Stock, without par value (the "Common Shares"), of the Company,
at a purchase price of thirty dollars ($30) per one one-third (1/3) of a Common
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-thirds of
a Common Share which may be purchased upon exercise hereof) set forth above, and
the Purchase Price set forth above, are the number and Purchase Price as of
March 20, 1995, based on the Common Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of one one-
thirds of a Common Share which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon that happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged by the Company in whole or in part for
Common Shares.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples on
one one-third of a Common Share), but in lieu thereof a cash payment will be
made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Shares or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the Company and
its corporate seal.
Dated as of ___________________, ____.
ATTEST: STEWART & STEVENSON SERVICES, INC.
[SEAL]
________________________________ By:______________________________
Secretary President
Date of Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
THE BANK OF NEW YORK, as Rights Agent
By: ___________________________________
Authorized Signatory
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated as of ___________________, ______.
________________________________________
Signature
Signature Guarantee:
Signatures must be guaranteed.
______________________________________________________________________________
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
______________________________________
Signature
______________________________________________________________________________
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO STEWART & STEVENSON SERVICES, INC.:
The undersigned hereby irrevocably elects to exercise _____________ Rights
represented by this Right Certificate to purchase the Common Shares (or other
securities) issuable upon the exercise of such Rights and requests that
certificates for such Common Shares (or other securities) be issued in the name
of:
Please insert social security
or other identifying number:
______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated as of ___________________, ____.
______________________________________
Signature
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
______________________________________
Signature
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
The signature in the foregoing Form of Assignment or Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
EXHIBIT B
STEWART & STEVENSON SERVICES, INC.
SHAREHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On March 7, 1995, the Board of Directors of Stewart & Stevenson Services,
Inc. (the "Company"), authorized the issuance of one common share purchase right
(a "Right") with respect to each outstanding share of common stock, without par
value (the "Common Shares"), of the Company. The rights were issued on March
20, 1995 to the holders of record of Common Shares on that date. Each Right
entitles the registered holder to purchase from the Company one one-third of a
Common Share at a price of $30 per one one-third of a Common Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") dated March
13, 1995, between the Company and The Bank of New York, as Rights Agent (the
"Rights Agent").
Detachment of Rights; Exercise. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate will be distributed. The Rights will separate from the Common
Shares and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company, or (ii) 10 business days following the commencement
or announcement of an intention to commence a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on March 20, 1995, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after March 20, 1995, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of March 20, 1995, even without such notation
or a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 20, 2005 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to acquire 15% or more of the Voting Shares of
the Company, each Right then outstanding (other than Rights beneficially owned
by the Acquiring Person which would become null and void) would become a right
to buy that number of Common Shares that at the time of such acquisition would
have a market value of two times the Purchase Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
Registration and Listing of Common Shares. The offer and sale of the
Common Shares issuable upon exercise of the Rights will be registered with the
Securities and Exchange Commission but such registration will not be effective
until the Rights become exercisable. The Rights themselves are listed on the
NASDAQ NMS. As described above, however, the Rights will not be transferable
separately from the Common Stock until the Distribution Date.
Antidilution and Other Adjustments. The number of Common Shares or other
securities or property issuable upon exercise of the Rights, and the Purchase
Price payable, are subject to customary adjustments from time to time to prevent
dilution.
The number of outstanding Rights and the number of Common Shares issuable
upon exercise of each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
Exchange Option. At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding Voting Shares of the Company and before the acquisition by a person
or group of 50% or more of the outstanding Voting Shares of the Company, the
Board of Directors may, at its option, issue Common Shares in mandatory
redemption of, and in exchange for, all or part of the then outstanding and
exercisable Rights (other than Rights owned by such Acquiring Person or group
which would become null and void) at an exchange ratio of one Common Share for
each two Common Shares for which each Right is then exercisable, subject to
adjustment.
Redemption of Rights. At any time prior to the first public announcement
that a person or group has become the beneficial owner of 15% or more of the
outstanding Voting Shares, the Board of Directors of the Company may redeem all,
but not less than all, of the then outstanding Rights at a price of $0.01 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
No Rights as Shareholder. Until a Right is exercised, 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.
Amendment of Rights. The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders of the Rights,
including an amendment to extend the Final Expiration Date, and, provided a
Distribution Date has not occurred, to extend the period during which the Rights
may be redeemed, except that after the Distribution Date no such amendment may
materially and adversely affect the interests of the holders of the Rights.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
March ___, 1995. A copy of the Rights Agreement is available free of charge
from the Company.
Legend for Stock Certificates
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN STEWART & STEVENSON SERVICES,
INC. AND THE BANK OF NEW YORK, DATED AS OF MARCH 13, 1995 (THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF STEWART &
STEVENSON SERVICES, INC. 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. STEWART & STEVENSON SERVICES,
INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. AS DESCRIBED IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO OR ACQUIRED BY ANY ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (EACH AS DEFINED IN THE RIGHTS AGREEMENT) SHALL,
UNDER CERTAIN CIRCUMSTANCES, BECOME NULL AND VOID.
