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
Sequa Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-1885030
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
200 Park Avenue
New York, New York 10166
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Class B Preferred Stock Purchase Rights New York Stock Exchange
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), check the following box. X
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d) check the following box. X
Securities Act registration statement file number to which this form
relates:
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(if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Securities to be Registered
On October 30, 2000, the Board of Directors of Sequa
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of Class A Common Stock, no par value, and Class B Common
Stock, no par value (the "Class A Common Stock" and "Class B Common Stock,"
respectively and together, the "Common Stock"), of the Company. The distribution
is payable to holders of record on December 1, 2000 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock,
$1.00 par value (the "Junior Preferred Stock"), at a price of $200.00 per one
one-thousandth of a share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and The Bank of New York, as Rights
Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following
the date (the "Shares Acquisition Date") of public announcement that a person or
group of affiliated or associated persons, subject to certain exceptions (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of Common Stock or other voting securities ("Voting Stock") that have
33 1/3% or more of the voting power of the outstanding shares of Voting Stock or
(ii) ten calendar days (or such later date as may be determined by action of the
Board of Directors prior to the time any person or group of affiliated persons
becomes an Acquiring Person) following the commencement or announcement of an
intention to make a tender offer or exchange offer the consummation of which
would result in such person or group acquiring, or obtaining the right to
acquire, beneficial ownership of Voting Stock having 33 1/3% or more of the
voting power of the outstanding shares of Voting Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Company's Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificates. The Rights Agreement provides
that, until the Distribution Date, the Rights will be transferred with and only
with the Company's Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of the Company's Common
Stock will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any of the Company's Common Stock certificates
outstanding as of the Record Date or issued thereafter will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights. The Rights Agreement provides that, as defined therein, the term
"Acquiring Person" shall not include
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Norman E. Alexander (and certain related Persons) who currently
beneficially own voting stock in excess of 50% of the
voting power.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on October 31, 2010, unless
earlier redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
Class A Common Stock for Rights issued with respect to Class A Common Stock and
Class B Common Stock for Rights issued with respect to Class B Common Stock (or,
in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
Exchange of Rights
At any time after the occurrence of the event set forth under
the heading "Exercise of Rights for Common Stock of the Company" above, the
Board of Directors may exchange the Rights (other than Rights owned by the
Acquiring Person which shall have become void), in whole or in part, at an
exchange ratio of one share of Class A Common Stock (or a fraction of a share of
Junior Preferred Stock having the same market value) per Class A Right (subject
to adjustment) and one share of Class B Common Stock (or a fraction of a share
of Junior Preferred Stock having the same market value) per Class B Right
(subject to adjustment).
Redemption of Rights
At any time prior to 5:00 P.M., New York City time, on the
tenth calendar day following the Shares Acquisition Date, the Company may redeem
the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, the Company shall make announcement
thereof, and upon such action, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
Rights Holder Not a Stockholder
Until a Right is exercised or exchanged, 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.
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Terms of the Junior Preferred Stock
The Junior Preferred Stock will rank junior to all other
series of the Company's preferred stock (including, but not limited to, the
$5.00 Cumulative Convertible Preferred Stock) with respect to payment of
dividends and as to distributions of assets in liquidation. Each share of Junior
Preferred Stock will have a quarterly dividend rate per share equal to the
greater of $10.00 or 1,000 times the per share amount of any dividend (other
than a dividend payable in shares of Common Stock or a subdivision of the Common
Stock) declared from time to time on the Class A Common Stock, subject to
certain adjustments. The Junior Preferred Stock will not be redeemable.
Generally, in the event of liquidation, the holders of each one one-thousandth
of a share of the Junior Preferred Stock will receive a payment equivalent to
that received by the holders of each share of the Common Stock. Generally, each
share of Junior Preferred Stock will vote together with the Common Stock and any
other series of cumulative preferred stock entitled to vote in such manner and
will be entitled to 1,000 votes, subject to certain adjustments. In the event of
any merger, consolidation, combination or other transaction in which shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or other property, each share of Junior Preferred Stock will be entitled to
receive 1,000 times the aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is changed or
exchanged, subject to certain adjustments. The foregoing dividend, voting and
liquidation rights of the Junior Preferred Stock are protected against dilution
in the event that additional shares of Common Stock are issued pursuant to a
stock split or stock dividend or distribution. Because of the nature of the
Junior Preferred Stock's dividend, voting, liquidation and other rights, the
value of the one one-thousandth of a share of Junior Preferred Stock purchasable
with each Right is intended to approximate the value of one share of Common
Stock.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to this Registration Statement
on Form 8-A dated October 31, 2000. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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Item 2. Exhibits
1. Form of Rights Agreement, dated as of October 30, 2000,
between Sequa Corporation and The Bank of New York, as Rights
Agent
2. Form of Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock (incorporated by
reference to Exhibit A to the Rights Agreement)
3. Form of Right Certificate (incorporated by reference to
Exhibit B to the Rights Agreement)
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duty caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
SEQUA CORPORATION
By: /s/ STUART Z. KRINSLY
----------------------------------------------------
Name: Stuart Z. Krinsly
Title: Senior Executive Vice President
and General Counsel
Dated: October 31, 2000
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EXHIBIT INDEX
Number Description
1 Form of Rights Agreement, dated as of October 30, 2000, between
Sequa Corporation and The Bank of New York, as Rights Agent.
2 Form of Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock (incorporated by
reference to Exhibit A to the Rights Agreement)
3 Form of Right Certificate (incorporated by reference to Exhibit B
to the Rights Agreement)
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SEQUA CORPORATION
and
THE BANK OF NEW YORK, as Rights Agent
RIGHTS AGREEMENT
Dated as of October 30, 2000
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................8
Section 3. Issue of Right Certificates.......................................9
Section 4. Form of Right Certificates........................................11
Section 5. Countersignature and Registration.................................12
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates.......................................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.............................................................15
Section 8. Cancellation and Destruction of Right Certificates................17
Section 9. Reservation and Availability of Shares of Capital Stock...........18
Section 10. Junior Preferred Stock Record Date...............................20
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights.............................................................21
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......32
Section 13. Fractional Rights and Fractional Shares..........................33
Section 14. Rights of Action.................................................34
Section 15. Agreement of Right Holders.......................................35
Section 16. Right Certificate Holder Not Deemed a Stockholder................36
Section 17. Concerning.......................................................36
Section 18. Merger or Consolidation or Change of Name of Rights Agent........37
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Section 19. Duties of Rights Agent...........................................38
Section 20. Change of Rights Agent...........................................42
Section 21. Issuance of New Right Certificates...............................43
Section 22. Redemption and Termination.......................................43
Section 23. Exchange.........................................................45
Section 24. Notice of Certain Events.........................................47
Section 25. Notices..........................................................48
Section 26. Supplements and Amendments.......................................48
Section 27. Successors.......................................................49
Section 28. Determinations and Actions by the Board of Directors.............49
*Section 29. Benefits of This Agreement.......................................50
Section 30. Severability.....................................................50
Section 31. Governing Law....................................................50
Section 32. Counterparts.....................................................51
Section 33. Descriptive Headings.............................................51
Exhibit A - Certificate of Designation.............................A-1
Exhibit B - Form of Right Certificate..............................B-1
Exhibit C - Summary of Rights to Purchase Junior
Preferred Stock........................................C-1
Exhibit D - Incumbency Certificate.................................D-1
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<PAGE>
RIGHTS AGREEMENT
Rights Agreement (the "Agreement"), dated as of October 30, 2000,
between Sequa Corporation, a Delaware corporation (the "Company"), and The Bank
of New York, a New York banking corporation, as Rights Agent (the "Rights
Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company on October 30, 2000
(the "Rights Dividend Declaration Date") authorized and declared a dividend
distribution (the "Distribution") of one Class A Right (as such term is
hereinafter defined) for each outstanding share of the Class A Common Stock, no
par value (the "Class A Common Stock"), and one Class B Right (as such term is
hereinafter defined) for each outstanding share of the Class B Common Stock, no
par value (the "Class B Common Stock"), of the Company outstanding at the close
of business on December 1, 2000 (the "Record Date") and has authorized and
directed the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions hereof) in respect of each share of Common Stock (as
such term is hereinafter defined) issued (whether originally issued or delivered
from the Company's treasury stock) between the Record Date and the earlier of
the Distribution Date or the Expiration Date (as such terms are hereinafter
defined), each Class A Right and Class B Right initially representing the right
to purchase, under certain circumstances, one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value (the "Junior
Preferred Stock"), of the Company having the rights, powers and preferences set
forth in the Certificate of Designation attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of
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such Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of securities of the Company constituting a Substantial Block (as
such term is hereinafter defined), but shall not include (i) the Company,
any Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or
any Person organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such plan;
(ii) any Person who or which, together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of a Substantial Block solely
as a result of a change in the aggregate number of shares of Voting Stock
(as such term is hereinafter defined) outstanding since the last date on
which such Person acquired Beneficial Ownership of any shares of the Voting
Stock constituting all or a portion of such Substantial Block; (iii) any
Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of a Substantial Block in the good
faith belief that such acquisition would not (x) cause such Person and its
Affiliates and Associates to become the Beneficial Owner of a Substantial
Block and such Person relied in good faith in computing the percentage of
its voting power on publicly filed reports or documents of the Company
which are inaccurate or out-of-date or (y) otherwise cause a Distribution
Date or the adjustment provided for in Section 11(a)(ii) to occur; and (iv)
any Alexander Person (as such term is hereinafter defined). Notwithstanding
clause (ii) or (iii) of the prior sentence, if any Person that is not an
Acquiring Person due to such clause (ii) or (iii) does not cease to be the
Beneficial Owner of a Substantial Block by the close of business on the
fifth Business Day (as such term is hereinafter defined) after notice from
the Company (the date of notice being the first Business Day) that such
Person is the Beneficial Owner of a Substantial Block, such Person shall,
at the end of such five Business Day period, become an Acquiring Person
(and such clause (ii) or (iii) shall no longer apply to such Person). For
purposes of this definition, the determination whether any Person acted in
"good faith" shall be conclusively determined by the Board of Directors of
the Company. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as a result of an acquisition of Voting Stock by the
Company which, by reducing the number of shares of Voting Stock
outstanding, increases the proportionate voting power of Voting Stock
beneficially owned by such Person to 33 1/3% or more of the total vot-
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ing power of the then outstanding shares of Voting Stock of the Company;
provided, however, if a Person shall become the Beneficial Owner of a
Substantial Block as a result of an acquisition of Voting Stock by the
Company and shall, after such acquisition of Voting Stock by the Company,
become the Beneficial Owner of any additional Voting Stock of the Company
other than pursuant to a stock split, stock dividend or similar
transaction, and immediately thereafter be the Beneficial Owner of a
Substantial Block, then such Person shall be deemed to be an "Acquiring
Person."
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii)(B) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in the introduction
hereto.
(f) "Alexander Person" shall mean (i) Norman E. Alexander and his
spouse, their lineal descendants and their spouses (so long as they remain
spouses) and the estate of any of the foregoing persons, and any
partnership, trust, corporation or other entity to the extent any shares of
Voting Stock owned by such entity are considered beneficially owned by any
of such individuals or estates, and (ii) any person who would be an
Acquiring Person solely by reason of being deemed to be the Beneficial
Owner of shares of Voting Stock beneficially owned by any such estate or
entity, whether by acting as an officer, director, executor, trustee or
other managing person of any such entity, or by reason of any ownership
interest or other pecuniary interest in any such entity, or having an
agreement, arrangement or understanding with any such individual, estate or
entity.
(g) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to acquire (whether
such right is exercisable immediately or only after the passage of
time or upon the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (1) securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (2) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section
3(a) hereof ("Original Rights") or pursuant to Section 11(i) or
Section 21 hereof in connection with an adjustment made with respect
to Original Rights; or
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding
(whether or not in writing) or has a "pecuniary interest" or an
"indirect pecuniary interest" in (as determined pursuant to
Rule 16a-1(a)(2) of the General Rules and Regulations under the
Exchange Act); provided, however, a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this subparagraph (ii) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy given
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations of
the Exchange Act and (2) is not then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph
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(ii) of this paragraph (g)) or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition
shall cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in a bona fide firm commitment underwriting pursuant to an
underwriting agreement with the Company.
(h) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) "Certification" shall have the meaning set forth in Section 17
hereof.
(j) "Class A Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii)(A) hereof.
(k) "Class A Common Stock" shall have the meaning set forth in the
recitals hereto.
(l) "Class A Right" shall have the meaning set forth in Section 3(a)
hereof.
(m) "Class A Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(n) "Class B Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii)(B) hereof.
(o) "Class B Common Stock" shall have the meaning set forth in the
recitals hereto.
(p) "Class B Right" shall have the meaning set forth in Section 3(a)
hereof.
(q) "Class B Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(r) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
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(s) "Common Stock" when used with reference to the Company shall mean
the Class A Common Stock of the Company and the Class B Common Stock of the
Company. "Common Stock" when used with reference to any Person other than
the Company shall mean either the capital stock with the greatest voting
power of such other Person or, if such Person is a Subsidiary of another
Person, the equity securities or other equity interest having power to
control or direct the management of such other Person.
(t) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(u) "Company" shall have the meaning set forth in the introduction
hereto.
(v) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(w) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(x) "Distribution" shall have the meaning set forth in the recitals
hereto.
(y) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(z) "Equivalent Junior Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(aa) "Exchange Act" shall have the meaning set forth in the
definitions of "Affiliate" and "Associate" above.
(bb) "Exchange Ratio" shall have the meaning set forth in Section
23(a) hereof.
(cc) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(dd) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(ee) "Incumbency Certificate" shall have the meaning set forth in
Section 26 hereof.
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(ff) "Junior Preferred Stock" shall mean the shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company.
(gg) "NASDAQ" shall have the meaning set forth in Section 11(d)(i)
hereof.
(hh) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(ii) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
(jj) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(kk) "Record Date" shall have the meaning set forth in the recitals
hereto.
(ll) "Redemption Price" shall have the meaning set forth in Section
22(a) hereof.
(mm) "Right Certificates" shall have the meaning set forth in Section
3(a) hereof.
(nn) "Rights" shall have the meaning set forth in the recitals hereto.
(oo) "Rights Agent" shall have the meaning set forth in the
introduction hereto.
(pp) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals hereto.
(qq) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(rr) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ss) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, includes a report
filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(tt) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
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(uu) "Subsidiary" shall mean, with reference to any Person, any
corporation (or other entity) of which an amount of voting securities (or
comparable ownership interests) sufficient to elect at least a majority of
the directors (or comparable individuals) of such corporation (or other
entity) is beneficially owned or otherwise controlled, directly or
indirectly, by such Person.
(vv) "Substantial Block" shall mean a number of shares of the Voting
Stock which are entitled to thirty three and one-third percent (33 1/3%) or
more (without regard to any instruments, agreements, arrangements or
understandings to which a holder thereof may be a party or to which such
shares may be subject or by which such shares may be bound) of the
aggregate voting power of all outstanding shares of Voting Stock.
(ww) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(xx) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(yy) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(zz) "Triggering Event" shall mean any Section 11(a)(ii) Event.
(aaa)"Voting Stock" when used with reference to the Company shall mean
the Class A Common Stock, the Class B Common Stock and the $5 Cumulative
Convertible Preferred Stock, $1.00 par value, and any other outstanding
shares of capital stock of the Company which are entitled to vote generally
in the election of directors.
Any term defined in the singular shall have the same meaning in the plural and
any term defined in the plural shall have the same meaning in the singular.
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 shall act as Co-Rights Agent and may from time to time appoint such
other Co-Rights Agents as it may deem necessary or desirable upon ten calendar
days' written notice to the Rights Agent. In no event shall the Rights Agent
have any duty to su-
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pervise or in any way be liable for the actions or omissions of such Co-Rights
Agents.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the close of business on the tenth calendar day after the Shares Acquisition
Date (or, if the tenth calendar day after the Shares Acquisition Date occurs
before the Record Date, the close of business on the Record Date) or (ii) the
close of business on the tenth calendar 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 the commencement of, or 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 Person organized, appointed or established by
the Company or any Subsidiary of the Company for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer if, upon consummation
thereof, such Person would be an Acquiring Person (the earlier of the dates in
subsections (i) and (ii) hereof being herein referred to as the "Distribution
Date") (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for the Common
Stock shall be deemed also to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Stock. A Right
issued to a holder of Class A Common Stock (a "Class A Right"), if exercised to
purchase Common Stock pursuant to Section 11(a)(ii)(A) of this Agreement, may
purchase only Class A Common Stock and a Right issued to a holder of Class B
Common Stock (a "Class B Right"), if exercised to purchase Common Stock pursuant
to Section 11(a)(ii)(B) of this Agreement, may purchase only Class B Common
Stock. As soon as practicable after receipt by the Rights Agent of written
notice from the Company of the Distribution Date, the Rights Agent, at the
Company's expense, will send by first-class, postage prepaid mail, to each
record holder of Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Class
A Right Certificate or a Class B Right Certificate, as the case may be, in
substantially the form of Exhibit B hereto (the "Class A Right Certificate" or
the "Class B Right Certificate," as the case may be) (together, the "Right
Certificates"), evidencing one Class A Right or one Class B Right for,
respectively, each share of the Class A Common Stock or Class B Common Stock so
held, subject to adjustment as provided herein.
<PAGE>
-10-
As of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates and the conversion of a share of Class B Common Stock into a share
of Class A Common Stock after the Distribution Date will have no effect on any
such Rights.
(b)......As soon as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Junior Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for Common Stock, and the registered holders
of the Common Stock shall also be the registered holders of the associated
Rights. Until the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer or conversion of any of the certificates for
Common Stock outstanding on the Record Date shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
(c)......Rights shall be issued in respect of all shares of Common
Stock issued after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date (as such term is defined in Section 7), or, in
certain circumstances provided in Section 21 hereof, after the Distribution
Date. Certificates representing such shares of Common Stock 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 Sequa
Corporation and The Bank of New York dated as of October 30, 2000 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of Sequa Corporation. 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. Sequa Corporation will mail to the holder of this
certificate a copy of the Rights Agreement as in effect on the date of
mailing without charge within five Business Days after receipt of a
written request therefor. Rights
<PAGE>
-11-
beneficially owned by an Acquiring Person and certain other persons
will be null and void under certain circumstances set forth in the
Rights Agreement.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend shall be evidenced by such
certificates alone, and the surrender for transfer or conversion of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. In the event that the Company
purchases or acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
Section 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which do
not affect the rights or duties of the Rights Agent) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of the NASDAQ National Market or of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage. The
Right Certificates shall be in machine-printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 11 and
Section 21 hereof, the Right Certificates, whenever distributed, shall be dated
as of the Record Date, shall show the date of countersignature, and on their
face shall entitle the holders thereof to purchase such number of shares of
Junior Preferred Stock (or following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as shall be set forth
therein at the price per one one-thousandth of a share of Junior Preferred
<PAGE>
-12-
Stock set forth therein (the "Purchase Price"), but the number of such shares
and the Purchase Price shall be subject to adjustment as provided herein.
(b)......Notwithstanding any other provision of this Agreement,
(i) any Right Certificate issued pursuant to Section 3(a) or Section 21 hereof
that represents Rights beneficially owned by: (x) an Acquiring Person or any
Associate or Affiliate thereof, (y) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such or (z) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any agreement, arrangement or understanding (whether
or not in writing) regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding (whether or not in writing) which has as a primary purpose or
effect avoidance of Section 7(e) hereof, (ii) any Right Certificate issued at
any time to any nominee of such Acquiring Person, Associate or Affiliate and
(iii) any Right Certificate issued pursuant to Section 6 or Section 11 hereof,
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent feasible
following the written instruction of the Company to the Rights Agent) the
following legend, modified as applicable to apply to such Person:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented will be null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
The Company shall instruct the Rights Agent in writing of the Rights
which should be so legended and shall supply the Rights Agent with such legended
Right Certificates.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by one of its authorized officers
either manually or by facsim-
<PAGE>
-13-
ile signature. The Right Certificates shall be countersigned by an authorized
signatory of the Rights Agent either manually or by facsimile signature and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, issued and delivered with the same
force and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
date of each of the Right Certificates and the date of countersignature of each
of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 13 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for
<PAGE>
-14-
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of shares of Junior Preferred Stock (or following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence,
as the Company or the Rights Agent shall reasonably request, of the identity of
the Beneficial Owner, Affiliates or Associates thereof or of the holder, or of
any other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of
securities of the Company. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 13 and Section 19(k) hereof, countersign and deliver
to the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment from a Right
Certificate holder of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates. The Rights Agent shall have no duty or
obligation to take any action under any Section of this Agreement which requires
the payment by a Rights holder of applicable taxes and governmental charges
unless and until the Rights Agent is satisfied that all such taxes and/or
charges have been paid.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, along with a signature guarantee and such other
further documentation as the Rights Agent may reasonably request and
reimbursement to the Company and the Rights Agent
<PAGE>
-15-
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate, if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 3(a), 9(c), 11(a)(iii), 22(a) and 23(b)
hereof) 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 the designated office
of the Rights Agent, together with payment of the aggregate Purchase Price for
the total number of one one-thousandths of a share of Junior Preferred Stock (or
shares of Common Stock, other securities, cash or other assets, as the case may
be) as to which the Rights are then exercisable, at or prior to the earliest of
(i) the close of business on October 31, 2010 (the "Final Expiration Date"),
(ii) the time at which the Rights are exchanged as provided in Section 23 or
(iii) the time at which the Rights are redeemed as provided in Section 22 (such
earliest date being herein referred to as the "Expiration Date").
(b)......The Purchase Price for each one one-thousandth of a share of
Junior Preferred Stock pursuant to the exercise of a Right shall initially be
$200, shall be subject to adjustment from time to time as provided in Section 11
hereof and shall be payable in accordance with paragraph (c) below.
(c)......Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed
and completed accompanied by payment of the Purchase Price for the number of one
one-thousandths of shares of Junior Preferred Stock (or shares of Common Stock,
other securities, cash or other assets, as the case may be) to be purchased and
an amount equal to any applicable transfer tax, the Rights Agent shall
thereupon, subject to Section 19(k), promptly (i) requisition from any transfer
agent of Junior Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the number of one
one-thousandths of shares of Junior Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
re-
<PAGE>
-16-
quests, (ii) if the Company shall have elected to deposit the total number of
shares of Junior Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of shares of Junior Preferred Stock as are to
be purchased (in which case certificates for the shares of Junior Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby directs the depositary agent to
comply with such request, (iii) when appropriate, requisition from any transfer
agent of the Common Stock of the Company (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total number of
shares of Common Stock to be paid in accordance with Section 11(a)(ii) and
11(a)(iii), (iv) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 13, (v) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such
holder and (vi) when appropriate, after receipt deliver such cash to or upon the
order of the registered holder of such Right Certificate. The payment of the
then Purchase Price may be made in cash or by certified bank check or bank draft
or money order payable to the order of the Company or the Rights Agent. In the
event that the Company is obligated to issue securities, distribute property or
pay cash pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available for
payment, distribution or issuance by the Rights Agent, if and when appropriate.
(d)......In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent 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 13 hereof.
(e)......Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who be-
<PAGE>
-17-
comes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
agreement, arrangement or understanding (whether or not in writing) regarding
the transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding (whether
or not in writing) which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall notify the Rights Agent when this Section 7(e) applies and shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but neither the Company nor the Rights
Agent shall have any liability to any holder of Right Certificates or other
Person as a result of the Company's failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. The Rights Agent will endeavor to comply with the provisions hereof
to the extent it has received instructions from the Company concerning such
matters.
(f)......Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner, Affiliates or Associates thereof or of the holder, or of any
other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company or the Rights Agent shall reasonably
request.
Section 8. Cancellation of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
<PAGE>
-18-
surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company.
Section 9. Reservation and Availability of Shares of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Junior Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities) or out of its
authorized and issued shares of Junior Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and issued Common Stock
and/or other securities) held in its treasury, the number of shares of Junior
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that will be sufficient to permit the exercise in
full of all outstanding Rights (it being understood that any of the foregoing
shares or securities may also be reserved for other purposes) or will take such
other steps as are appropriate to assure that the number of such shares or
securities (or their equivalents) sufficient to permit the exercise in full of
all outstanding Rights will be available upon such exercise.
(b)......So long as the shares of Junior Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable upon the exercise of Rights may be listed on any national
securities exchange, or admitted to trading on NASDAQ, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that the Board of Directors
of the Company determines that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such exchange
or admitted to trading on NASDAQ upon official notice of issuance upon such
exercise.
(c)......The Company shall use its best efforts (X)(i) to file, as
soon as practicable following the first occurrence of a Section 11(a)(ii) Event,
or as soon as required by law, as the case may be, a registration statement
under the Act with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) to cause such registration
<PAGE>
-19-
statement to become effective as soon as practicable after such filing and (iii)
to cause such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date and (Y)(i) to file appropriate applications with any state or
federal regulatory bodies having jurisdiction over the issuance of the
securities (or assets) purchasable upon exercise of the Rights in order to
obtain any approvals or orders of such bodies as may be legally required, (ii)
to cause such approvals to be obtained or orders to be issued as soon as
practicable after such filing and (iii) to cause such approvals or orders to
remain effective until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities (or assets) and (B) the Expiration Date,
to the extent not previously obtained. The Company will also take such action as
may be appropriate under the blue sky laws of the various states. The Company
may temporarily suspend, (X) for a period of time not to exceed ninety (90) days
after the date set forth in clause (X)(i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective and (Y) for a period of
time not in excess of one hundred eighty (180) days after such date (or for such
longer period as is required by any applicable law or rule or regulation of any
appropriate regulatory bodies), the exercisability of the Rights in order to
obtain any such required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained. The Rights Agent
may assume
that any Right exercised is permitted to be exercised under applicable law,
unless specifically notified in writing by the Company prior to such exercise,
and shall have no liability for acting in reliance upon such assumption.
(d)......The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of the Junior Preferred
Stock (and following the occurrence of a Triggering Event, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to pay-
<PAGE>
-20-
ment of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.
(e)......The Company further covenants and agrees that it will pay
when due and payable any and all taxes and government charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of the Junior Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required (a) to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Junior
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or (b) to issue or deliver any
certificates for shares of the Junior Preferred Stock (or Common Stock and/or
other securities, as the case may be) 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) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Junior Preferred Stock Record Date. Each Person in whose
name any certificate for any number of shares of Junior Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such whole and/or fractional shares of Junior Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes and charges) was made and shall show
the date of countersignature; provided, however, if the date of such surrender
and payment is a date upon which the Junior Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Junior Preferred Stock (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
<PAGE>
-21-
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)......(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Junior Preferred Stock
payable in shares of the Junior Preferred Stock, (B) subdivide the outstanding
Junior Preferred Stock, (C) combine the outstanding Junior Preferred Stock into
a smaller number of shares or (D) issue any shares of its capital stock in a
reclassification of the Junior Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, 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 Junior Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Junior Preferred Stock (or Common Stock and/or other
securities) transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination
or reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii)Subject to Section 23 of this Agreement, in the event any Person,
alone or together with its Affiliates and Associates, becomes an Acquiring
Person (a "Section 11(a)(ii) Event"), then, prior to the later of (x) the date
on which the Company's rights of redemption pursuant to Section 22(a) expire, or
(y) five (5) days after the date of the first occur-
<PAGE>
-22-
rence of a Section 11(a)(ii) Event, proper provision shall be made so that
(A)Each holder of a Class A Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon exercise thereof at
the then current Purchase Price for the number of one one-thousandths of a
share of Junior Preferred Stock for which such Class A Right is then
exercisable in accordance with the terms of this Agreement, in lieu of
shares of Junior Preferred Stock, such number of shares of the Class A
Common Stock of the Company (subject to Section 3(a) hereof) as shall equal
the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a share of Junior Preferred Stock
for which a Class A Right is then exercisable and dividing that product by
(y) fifty percent (50%) of the Current Market Price per share of the Class
A Common Stock of the Company (determined pursuant to Section 11(d)) on the
date of the occurrence of the event listed above in this subparagraph (ii)
(such number of shares are hereinafter referred to as the "Class A
Adjustment Shares") provided that the Purchase Price and the number of
Class A Adjustment Shares shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of such first
occurrence; and
(B) Each holder of a Class B Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon exercise thereof at
the then current Purchase Price for the number of one one-thousandths of a
share of Junior Preferred Stock for which such Class B Right is then
exercisable in accordance with the terms of this Agreement, in lieu of
shares of Junior Preferred Stock, such number of shares of the Class B
Common Stock of the Company (subject to Section 3(a) hereof) as shall equal
the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a share of Junior Preferred Stock
for which a Class B Right is then exercisable and dividing that product by
(y) fifty percent (50%) of the Current Market Price per share of the Class
B Common Stock of the Company (determined pursuant to Section 11(d)) on the
date of the occurrence of the event listed above in this subparagraph (ii)
(such number of shares are hereinafter referred to as the "Class B
Adjustment Shares") (together with the Class A Adjustment Shares, the
"Adjustment Shares") provided that the Purchase Price and the number of
Class B
<PAGE>
-23-
Adjustment Shares shall be further adjusted as provided in this Agreement
to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's Restated Certificate of Incorporation, as amended,
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company shall (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread") and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon exercise of the Rights
and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(subject to Section 3(a) hereof) (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors of the Company
has deemed to have the same value as shares of Common Stock (such shares of
preferred stock, "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's rights of redemption pursuant to Section
22(a) expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (subject to Section 3(a) hereof) (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. Only Class A Common Stock shall be issued
with respect to Class A Rights and only Class B Common Stock shall be issued
with respect to Class B Rights. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after
<PAGE>
-24-
the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement and shall give simultaneous written notice to the Rights
Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent
shall be deemed to have the same value as the Common Stock on such date. The
Company shall give the Rights Agent notice of the selection of any Common Stock
Equivalent under this Section 11(a)(iii).
(b)......In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Junior Preferred Stock
entitling them (for a period expiring within forty-five (45) calendar days after
such record date) to subscribe for or purchase Junior Preferred Stock (or
securities having substantially the same rights, privileges and preferences as
the shares of Junior Preferred Stock ("Equivalent Junior Preferred Stock") or
convertible into the Junior Preferred Stock or Equivalent Junior Preferred
Stock) at a price per share of the Junior Preferred Stock or Equivalent Junior
Preferred Stock (or having a conversion price per share, if a security
convertible into the Junior Preferred Stock or Equivalent Junior Preferred
Stock) less than the Current Market Price (as defined in Section 11(d) per share
of the Junior Preferred Stock or Equivalent Junior Preferred Stock, as the case
may be) 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, of which the numerator
shall be the number of shares of Junior Preferred Stock outstanding on such
record date plus the number of shares of Junior Preferred Stock or
<PAGE>
-25-
Equivalent Junior Preferred Stock which the aggregate offering price of the
total number of shares of Junior Preferred Stock or Equivalent Junior Preferred
Stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price and of which the denominator shall be the number of shares of Junior
Preferred Stock outstanding on such record date plus the number of additional
shares of Junior Preferred Stock and/or Equivalent Junior Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which shall be 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. Shares of Junior Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c)......In case the Company shall fix a record date for the making of
a distribution to all holders of Junior Preferred Stock (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 periodic cash dividend or a dividend payable in
Junior Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(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, of which the numerator
shall be the Current Market Price per share of Junior Preferred Stock (as
defined in Section 11(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 share of Junior
Preferred Stock and of which the denominator shall be such Current Market Price
per share of Junior Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall
<PAGE>
-26-
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)......(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
share of Class A Common Stock or Class B Common Stock, as the case may be, on
any date shall be deemed to be the average of the daily closing prices per share
of the Class A Common Stock or the Class B Common Stock, as the case may be, for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined in
this paragraph (d)) immediately prior to but not including such date and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Class A Common Stock or Class B Common
Stock, as the case may be, on any date shall be deemed to be the average of the
daily closing prices per share of the Class A Common Stock or the Class B Common
Stock, as the case may be, for the ten (10) consecutive Trading Days immediately
following but not including such date; provided, however, in the event that the
Current Market Price per share of Class A Common Stock or Class B Common Stock,
as the case may be, is determined during the period following the announcement
by the issuer of such Class A Common Stock or Class B Common Stock, as the case
may be, of (A) a dividend or distribution on such Class A Common Stock or Class
B Common Stock, as the case may be, payable in shares of Class A Common Stock or
Class B Common Stock, as the case may be, or securities convertible into shares
of Class A Common Stock (other than the Class A Rights) or Class B Common Stock
(other than the Class B Rights), as the case may be, or (B) any subdivision,
combination or reclassification of Class A Common Stock or Class B Common Stock,
as the case may be, and prior to the expiration of the requisite 30 Trading Day
or 10 Trading Day period, as set forth above after the ex-dividend date for such
dividend or distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of the Class A Common
Stock or Class B Common Stock, as the case may be, are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the prin-
<PAGE>
-27-
cipal national securities exchange on which the shares of the Class A Common
Stock or Class B Common Stock, as the case may be, are listed or admitted to
trading or, if the shares of the Class A Common Stock or Class B Common Stock,
as the case may be, are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Class A Common Stock or the Class B Common Stock, as the case may be, are
not quoted by such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Class A
Common Stock or the Class B Common Stock, as the case may be, selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Class A Common Stock or the Class B Common Stock, as the case
may be, the fair value of such shares on such date shall be as determined in
good faith by the Board of Directors (which may, in its sole discretion, rely
upon the opinion of an independent investment banking firm selected by the Board
of Directors) whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the shares of Class A Common Stock or Class B Common Stock, as the case
may be, are listed or admitted to trading is open for the transaction of
business or, if the shares of the Class A Common Stock or the Class B Common
Stock, as the case may be, are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of New York are not authorized or obligated by
law or executive order to close. If the Class A Common Stock or the Class B
Common Stock, as the case may be, is not publicly held or not so listed or
traded, "Current Market Price"
per share shall mean the fair value per share as determined in good faith by the
Board of Directors (which may, in its sole discretion, rely upon the opinion of
an independent investment banking firm selected by the Board of Directors) whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current Market
Price per share of Junior Preferred Stock shall be determined in the same manner
as set forth above for the Class A Common Stock in clause (i) of this Section
11(d) (other than the last sentence thereof). If the Current Market
<PAGE>
-28-
Price per share of Junior Preferred Stock cannot be determined in the manner
provided above or if the Junior Preferred Stock is not publicly held or listed
or traded in any manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Junior Preferred Stock shall be conclusively
deemed to be an amount equal to one thousand (1,000) (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Class A Common Stock occurring after the
date of this Agreement) multiplied by the Current Market Price per share of the
Class A Common Stock. If neither the Class A Common Stock nor the Junior
Preferred Stock is publicly held or so listed or traded, Current Market Price
per share of the Junior Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of one one-thousandth of a share of Junior Preferred Stock
shall be equal to the Current Market Price of one share of Junior Preferred
Stock divided by one thousand (1,000).
(e)......Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in such price;
provided, however, any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent, the nearest ten-thousandth of a share of Common Stock or the
nearest one-millionth of a share of Junior Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f)......If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than shares of Junior Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Junior Preferred Stock contained in
Sections 11(a) through (q), inclusive, and the provisions of Sections 7, 9, 10
<PAGE>
-29-
and 13 with respect to the Junior Preferred Stock shall apply on like terms to
any such other shares.
(g)......All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Junior Preferred Stock 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 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of shares covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i)......The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Junior Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of shares of Junior
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after the adjustment of the Purchase Price. The Company shall make a
public announcement and shall give simultaneous written notice to the Rights
Agent of its election to adjust the number of Rights, indicating the record date
for 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 ten (10) days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly
<PAGE>
-30-
as practicable, cause to be distributed to holders of Right Certificates on such
record date Right Certificates evidencing, subject to Section 13, 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 countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
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 shares of Junior Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
(k)......Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then stated value,
if any, of a share of Junior Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-thousandths of a share
of such Junior Preferred Stock at such adjusted Purchase Price.
(l)......In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Junior Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the shares of
Junior Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional
<PAGE>
-31-
shares upon the occurrence of the event requiring such adjustment.
(m)......Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of shares of Junior
Preferred Stock, issuance wholly for cash of any shares of Junior Preferred
Stock at less than the Current Market Price, issuance wholly for cash of the
Junior Preferred Stock or securities which by their terms are convertible into
or exchangeable for Junior Preferred Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section 11 hereafter
made by the Company to holders of its Junior Preferred Stock shall not be
taxable to such stockholders.
(n)......The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 22, 23 and 26 hereof, take
(nor will it permit any of its Subsidiaries to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o)......The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(n)) or (iii) sell or
transfer (or permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than fifty percent (50%)
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n)) if at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time
<PAGE>
-32-
after the Record Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event; provided, however, if the events in this
Section 11(p) involve Class A Common Stock, then the adjustments herein shall
apply to the Class A Rights, and if the events in this Section 11(p) involve
Class B Common Stock, then the adjustments herein shall apply to the Class B
Rights.
(q)......Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date, the Company may, in lieu of making any
adjustment to the Purchase Price, the number of shares of Junior Preferred Stock
eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(i),
11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the calculations and facts accounting for such adjustment and
the adjusted Purchase Price, (b) promptly file with the Rights Agent and with
each transfer agent for the Junior Preferred Stock and the Common Stock a copy
of such certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall have no duty with
<PAGE>
-33-
respect to and shall not be deemed to have knowledge of any adjustment unless
and until it shall have received such a certificate.
Section 13. Fractional Rights and Fractional Shares (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 13(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be used.
(b)......The Company shall not be required to issue fractions of
shares of Junior Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Junior Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares (other than fractions which are integral multiples of one one-thousandth
of a share of Junior Preferred Stock). In lieu of fractional shares that are not
integral multiples of one one-thousandth of a share of Junior Preferred Stock,
the Company
<PAGE>
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may pay to the registered holders of Right Certificates at the time
the Rights evidenced thereby are exercised or exchanged as herein provided an
amount in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Junior Preferred Stock. For purposes of this
Section 13(b), the current market value of one one-thousandth of a share of
Junior Preferred Stock shall be one one-thousandth of the closing price of a
share of Junior Preferred Stock (as determined pursuant to Section 11(d)(ii))
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock (subject to Section 3(a)
hereof). For purposes of this Section 13(c), the current market value of one
share of Common Stock shall be the closing price of one share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d)......The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right, except as otherwise permitted by
this Section 13.
(e) The Rights Agent shall have no duty or obligation with respect to
this Section 13 and Section 23(e) hereof unless and until it has received
specific instructions (and sufficient cash, if required) from the Company with
respect to its duties and obligations under such Sections.
Section 14. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in re-
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spect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 15. 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 Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6 and Section 7(f) hereof, 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
Stock 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 Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be required to 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, judgment or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency
<PAGE>
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or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however,
the Company must use its best efforts to have any such order, decree,
judgment or ruling lifted or otherwise overturned as soon as possible.
Section 16. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Junior Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 17. 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 other disbursements incurred in the preparation, execution, delivery,
amendment and administration 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, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense (including the
reasonable fees and expenses of counsel), incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent (each as may be
finally determined by a court of competent jurisdiction) for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability on the premises. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever
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(including, but not limited to, lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage. The indemnity provided herein
shall survive the termination of this Agreement and the termination and the
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent. The provisions of this Section 17 shall
survive the expiration of the Rights and the termination of this Agreement.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of the loss or damage and
regardless of the form of the action.
The Rights Agent shall be authorized and protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Agreement in reliance
upon any Right Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
instruction, adjustment notice, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
In addition to the foregoing, 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 (i) the execution of the certification concerning beneficial
ownership appended to the Form of Assignment and the Form of Election to
Purchase included as part of Exhibit B hereto (the "Certification"), unless the
Rights Agent shall have actual knowledge that, as executed, the Certification is
untrue or (ii) the non-execution or failure to complete the Certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution or failure.
Section 18. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights
<PAGE>
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Agent shall be a party, or any Person succeeding to all or substantially all 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 Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 20. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and
in all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 19. Duties of Rights Agent. The Rights Agent undertakes only
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 advice or opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in
accordance with such advice or 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
<PAGE>
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by the Company prior to taking, suffering or omitting to take 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 or the 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, suffered or
omitted by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (and as may be finally
determined by a court of competent jurisdiction); provided, however, the
Rights Agent shall not be liable for any indirect, special, consequential
or punitive damages. The issuance or non-issuance of a Right Certificate or
Junior Preferred Stock or other security issued in lieu of Junior Preferred
Stock in accordance with instructions given to the Rights Agent by the
Company pursuant to Section 19(k) hereof or in accordance with the terms
hereof shall not constitute gross 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 countersignature 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 be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under
the provisions of Section 11 or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty
<PAGE>
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as to the authorization or reservation of any shares of Junior Preferred
Stock or Common Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Junior Preferred Stock or Common
Stock will, when issued, be validly authorized and 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 and
certificates delivered pursuant to any provision hereof from any one of the
Chairman of the Board, the President, any Vice President, the Secretary or
the Treasurer of the Company, and is authorized to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken, suffered or omitted to be taken by it in
accordance with instructions of any such officer. An 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,
suffered or omitted by the Rights Agent with respect to its duties and
obligations under this Agreement and the date on and/or after which such
action shall be taken, or such omission shall be effective and the Rights
Agent shall not be liable for any action taken, suffered or omitted in
accordance with a proposal included in any such application on or after the
date specified therein (which date shall not be less than three Business
Days after the Company receives such application) without the consent of
the Company unless prior to taking, suffering or omitting such action, the
Rights Agent has received written instructions in response to such
application specifying the actions to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, affiliate, 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
trans-
<PAGE>
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action in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either by 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 to the Company or any other
person resulting from any such act, default, neglect or misconduct;
provided, however, reasonable care was exercised in the selection 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 it believes 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 certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response, the Rights
Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting the Company. The Company
shall give the Rights Agent prompt written instructions as to the action to
be taken regarding the Right Certificate involved. The Rights Agent shall
not be liable for acting in accordance with such instructions.
(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 purchase attached hereto unless the
Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such
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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 of ownership of which the Company is aware and which would
prohibit the exercise or transfer of the Right Certificates.
Section 20. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Junior Preferred Stock and the Common
Stock by registered or certified mail, and, at the Company's expense, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Junior
Preferred Stock and the Common Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then
the Company shall become the temporary Rights Agent and the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be
(i) a Person organized and doing business under the laws of the United
States or of the State of New York (or of any other state of the United
States so long as such Person is authorized to do business as a banking or
trust institution in the State of New York), in good standing, having an
office in the State of New York, which is subject to supervision or
examination by federal or state authority or which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $25
million or (ii) an affiliate of such Person. After appointment, the
successor Rights
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Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Junior Preferred
Stock and the Common Stock, 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 20, 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 21. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, (i) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 22. Redemption and Termination. (a) The Board of Directors of
the Company may, at its option, at any
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time prior to the earlier of (x) the close of business on the tenth calendar day
following the Shares Acquisition Date (or if the Shares Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date) or (y) the close of business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 per Right as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"), and the Company may, at its option, pay the Redemption Price either, in
whole or in part, in shares of its Class A Common Stock for Class A Rights or in
shares of its Class B Common Stock for Class B Rights (subject to Section 3(a)
hereof) (valued at their Current Market Price as defined in Section 11(d)(i) on
the date of the redemption), other securities, cash or other assets.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b)......In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board of Directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care, including reasonable inquiry, skill and diligence,
as a person of ordinary prudence would use under similar circumstances, and they
may consider the long-term and short-term effects of any action upon employees,
customers and creditors of the Company and upon communities in which offices or
other establishments of the Company are located, and all other pertinent
factors.
(c)......Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Within ten (10) days after the action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given,
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whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire
or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 22, and other than in connection with the
repurchase of Common Stock prior to the Distribution Date.
Section 23. Exchange. (a) The Board of Directors of the Company may,
at its option, from time to time on or after a Section 11(a)(ii) Event, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for shares of Class A Common Stock and Class B Common Stock (subject to
Section 3(a) hereof) at an exchange ratio of one share of Class A Common Stock
per Class A Right or one share of Class B Common Stock per Class B Right
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
(b)......Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 23(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock (subject to
Section 3(a) hereof) equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. Promptly after the action of the Board of
Directors ordering an exchange of the Rights, the Company shall give notice of
any such exchange to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent; provided, however,
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become null
and void pursuant to the provisions of Section 7(e) hereof) held by each holder
of Rights.
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(c)......In any exchange pursuant to this Section 23, the Company, at
its option, may substitute shares of Junior Preferred Stock (or Equivalent
Junior Preferred Stock, as such term is defined in Section 11(b) hereof) for
shares of Common Stock exchangeable for the Rights, at the initial rate of one
one-thousandth of a share of Junior Preferred Stock (or Equivalent Junior
Preferred Stock) for each share of Common Stock, as appropriately adjusted to
reflect adjustments in the dividend rights of the Junior Preferred Stock
pursuant to the terms thereof.
(d)......In the event that there shall not be sufficient shares of
Common Stock or Junior Preferred Stock issued, but not outstanding, or
authorized but unissued, to permit any exchange of Rights as contemplated in
accordance with this Section 23 or that any regulatory actions or approvals are
required in connection therewith, the Company shall take all such action as may
be necessary to authorize additional Common Stock or Junior Preferred Stock for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractional shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock pursuant to this Section 23. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock (subject to Section 3(a)
hereof). For the purposes of this Section 23(e), the current market value of a
whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 23.
(f) In any exchange pursuant to this Section 23, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) Common Stock Equivalents, (ii) cash, (iii) debt securities of the Company,
(iv) other assets or (v) any combination of the foregoing, having an aggregate
value which a majority of the Board of Directors of the Company shall have
determined in good faith to be equal to the Current Market Price of one share of
Common Stock (determined pursuant to Section 11(d) hereof) on the Trading Day
immediately preceding the date of exchange pursuant to this Section 23.
<PAGE>
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Section 24. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Junior Preferred Stock or to
make any other distribution to the holders of Junior Preferred Stock (other than
a regular periodic cash dividend), (b) to offer to the holders of Junior
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Junior Preferred Stock or shares of stock of any class or
any other securities, rights or options, (c) to effect any reclassification of
Junior Preferred Stock (other than a reclassification involving only the
subdivision of outstanding Junior Preferred Stock), (d) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n) hereof) or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than
fifty percent (50%) of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n) hereof) or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right, in accordance with
Section 25, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and the date
of participation therein by the holders of the Junior Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least twenty (20) days prior to the
record date for determining holders of the Junior Preferred Stock for purposes
of such action, and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Junior Preferred Stock, whichever
shall be the earlier.
In case a Section 11(a)(ii) Event 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, to the extent feasible and in accordance with Section
25, a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section 11(a)(ii) and
all references in the pre-
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ceding paragraph to Junior Preferred Stock shall be deemed to thereafter refer
to Common Stock and/or other securities, as the case may be.
Section 25. 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:
Sequa Corporation
200 Park Avenue
New York, New York 10166
Attn: Stuart Z. Krinsly,
Senior Executive Vice President
and General Counsel
Subject to the provisions of Section 20, 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, Floor 12W
New York, New York 10286
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any 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 registry
books of the Company.
Section 26. Supplements and Amendments. Prior to the earlier of the
Distribution Date or the Shares Acquisition Date and subject to the penultimate
sentence of this Section 26, the Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates.
From and after the earlier of the Distribution Date or the Shares Acquisition
Date, and subject to the penultimate sentence of this Section 26, the Company
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision con-
<PAGE>
-49-
tained herein which may be defective or inconsistent with any other provisions
herein, (iii) to lengthen the time period during which the Rights may be
redeemed following the Shares Acquisition Date for up to an additional twenty
(20) days beyond the time period set forth in Section 22(a) or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). The Company shall provide the Rights Agent
with an Incumbency Certificate in substantially the form attached hereto as
Exhibit D (the "Incumbency Certificate") and shall update it as necessary.
Upon the delivery of a certificate from an authorized officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interests under this
Agreement. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made on or after the Distribution Date which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of shares of Junior Preferred Stock for which a Right is then
exercisable.
Section 27. 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 28. Determinations and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Voting Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Voting Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Company's Board of Directors, or the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations and calculations
deemed necessary or advisable for the administration of this Agreement
(including a determination
<PAGE>
-50-
to redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (i) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Right Certificates and all
other parties and (ii) not subject the Company's Board of Directors to any
liability to the holders of the Right Certificates. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.
Section 29. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).
Section 30. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of the
Company determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 22 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Section 31. 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 Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State except that the rights,
<PAGE>
-51-
duties and obligations of the Rights Agent under this Agreement shall be
governed by the laws of the State of New York.
Section 32. 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 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
<PAGE>
-52-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
SEQUA CORPORATION
By:
Name:
Title:
Attest:
By:
Name:
Title:
THE BANK OF NEW YORK, Rights Agent
By:
Name:
Title:
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
SEQUA CORPORATION
__________________
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
__________________
SEQUA CORPORATION (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware does hereby
certify that, pursuant to authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation, as amended, and pursuant to the
provisions of Section 151 of the Delaware General Corporation Law, said Board of
Directors duly adopted the following resolution, which resolution remains in
full force and effect as of October 30, 2000:
RESOLVED, that pursuant to authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Corporation, as
amended, there is hereby created a series of preferred stock of the Corporation;
which series shall have the following powers, preferences, and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, in addition to those set forth in the
Restated Certificate of Incorporation of the Corporation, as amended:
1. Designation and Amount. The series of Preferred Stock established
hereby shall be designated as "Series A Junior Participating Preferred Stock,"
par value $1.00, and the authorized number of shares of Series A Junior
Participating Preferred Stock shall be 25,000 shares.
2. Dividends and Distributions. (A) Subject to the rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if
<PAGE>
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of February, May,
August and November in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10.00 per share or (b) subject
to the provision for adjustment hereinafter set forth, one thousand (1,000)
times the aggregate per share amount of all cash dividends, and one thousand
(1,000) times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Class A Common Stock or a subdivision of the outstanding shares of Class A
Common Stock (by reclassification or otherwise), declared on the Class A Common
Stock, no par value, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. In the
event the Corporation shall at any time after October 30, 2000 (the "Rights
Dividend Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on
the Series A Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
A-2
<PAGE>
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than thirty (30) days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to one thousand (1,000) votes on all matters submitted
to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the number of votes
per share to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
A-3
<PAGE>
(B) Except as otherwise provided herein, in the Certificate of
Incorporation, as amended, or by law, the holders of shares of Series A
Junior Participating Preferred Stock and the holders of shares of Class A
Common Stock, Class B Common Stock and $5 Cumulative Convertible Preferred
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including
holders of the Series A Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class, irrespective of series, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised initially at
a special meeting called pursuant to subparagraph (iii) of this Section
3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of directors shall be
exercised unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At any
meeting at which the holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have the
right, voting as a class, to elect directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2) directors
or, if such right is exercised at an annual meeting, to elect two (2)
directors. If the number which may be so elected at any special meeting
does not amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number
A-4
<PAGE>
of directors as shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock shall have
exercised their right to elect directors in any default period and during
the continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect directors,
the Board of Directors may order, or any stockholder or stockholders owning
in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant
to this Paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than twenty (20) days and not later than
sixty (60) days after such order or request or in default of the calling of
such meeting within sixty (60) days after such order or request, such
meeting may be called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number
of shares of Preferred Stock outstanding. Notwithstanding the provisions of
this Paragraph (C)(iii), no such special meeting shall be called during the
period within sixty (60) days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period and (y) any vacancy in the Board of
Directors may (except as provided in Para-
A-5
<PAGE>
graph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders of the class of
stock which elected the director whose office shall have become vacant.
References in this Paragraph (C) to directors elected by the holders of a
particular class of stock shall include directors elected by such directors
to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect directors shall
cease, (y) the term of any directors elected by the holders of Preferred
Stock as a class shall terminate and (z) the number of directors shall be
such number as may be provided for in the certificate of incorporation or
by-laws irrespective of any increase made pursuant to the provisions of
Paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board of Directors effected
by the provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity
A-6
<PAGE>
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding
up) to the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A
Junior Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes;
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subparagraph (A) of this
Paragraph 4, purchase or otherwise acquire such shares at such time and in such
manner.
5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution
A-7
<PAGE>
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall have received
an amount equal to $1,000 per share of Series A Junior Participating Preferred
Stock, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series A Junior Liquidation Preference by (ii) one thousand (1,000) (as
appropriately adjusted as set forth in subparagraph (C) below to reflect such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series A
Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to one (1) with
respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any
A-8
<PAGE>
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to one thousand (1,000) times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time after
the Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Junior Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
8. Redemption. The shares of Series A Junior Participating Preferred
Stock shall not be redeemable.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to the $5 Cumulative Convertible Preferred Stock and all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise.
10. Amendment. At any time when any shares of Series A Junior
Participating Preferred Stock are outstanding, neither the Restated Certificate
of Incorporation of the Corporation, as amended, nor this Certificate of
Designation shall
A-9
<PAGE>
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of a majority or more of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
A-10
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under penalties of perjury as of this th
day of , .
SEQUA CORPORATION
By:
[Name]
[Title]
ATTEST:
By:
[Name]
[Title]
A-11
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER OCTOBER 31, 2010 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]1
SEQUA CORPORATION
Class [A/B]2 Right Certificate
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of October 30, 2000 (the "Rights Agreement")
between Sequa Corporation, a Delaware corporation (the "Company"), and The Bank
of New York, a New York banking corporation, as Rights Agent (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M. (New York
City time) on October 31, 2010 at the office of the Rights Agent
----------------------------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
2 Depending on whether issued with respect to Class A Common Stock or Class B
Common Stock.
B-1
<PAGE>
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock, $1.00 par value (the "Junior Preferred Stock"),
of the Company, at a purchase price of $200 per one one-thousandth of a share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of October 30, 2000,
based on the Junior Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Junior Preferred Stock will be issued.
Upon the occurrence of a Triggering Event, if the Rights evidenced by
this Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights would become null and void and no holder hereof would have any right with
respect to such Rights from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Junior Preferred Stock (or, in certain circumstances,
common stock and/or other securities) which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, including Triggering
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights
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under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, 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 one one-thousandths
of a share of Junior Preferred Stock 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, along with a signature guarantee
and such other and further documentation as the Rights Agent may reasonably
request, 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 may be redeemed by the Company at its option at a
redemption price of $.001 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Shares Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement) and (ii) the
Final Expiration Date. In addition, under certain circumstances following the
Shares Acquisition Date, the Rights may be exchanged, in whole or in part, for
shares of common stock or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares. Immediately upon
the action of the Board of Directors of the Company authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.
No fractional shares of Junior Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Junior Preferred Stock),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement. The Company, at its election, may require that a number of Rights be
exercised so that only whole shares of Junior Preferred Stock would be issued.
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No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Junior
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give consent to or withhold consent from 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 valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of , .
[SEAL]
ATTEST: SEQUA CORPORATION
By: By:
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By:
Authorized Signatory
Date:
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<PAGE>
[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: __________, ____
Signature
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , ____
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To Sequa Corporation:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the shares of Junior
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security or
other taxpayer 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 of such Rights shall
be registered in the name of and delivered to:
Please insert social security or
other taxpayer identifying number
(Please print name and address)
Dated: ____________, ____
Signature
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , ____
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
JUNIOR PREFERRED STOCK
The Board of Directors of Sequa Corporation (the "Company") has
declared a dividend distribution of one Right for each outstanding share of
Class A Common Stock, no par value, and Class B Common Stock, no par value (the
"Class A Common Stock" and "Class B Common Stock," respectively and together,
the "Common Stock"), of the Company. The distribution is payable to holders of
record on December 1, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value (the "Junior
Preferred Stock"), at a price of $200.00 per one one-thousandth of a share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and The Bank of New York, as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following the date
(the "Shares Acquisition Date") of public announcement that a person or group of
affiliated or associated persons, subject to certain exceptions (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of
Common Stock or other voting securities ("Voting Stock") that have 33 1/3% or
more of the voting power of the outstanding shares of Voting Stock or (ii) ten
calendar days (or such later date as may be determined by action of the Board of
Directors prior to the time any person or group of affiliated persons becomes an
Acquiring Person) following the commencement or announcement of an intention to
make a tender offer or exchange offer the consummation of which would result in
such person or group acquiring, or obtaining the right to acquire, beneficial
ownership of Voting Stock having 33 1/3% or more of the voting power of the
outstanding shares of Voting Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Company's Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificates. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Company's
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Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Company's Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates outstanding as of the
Record Date or issued thereafter will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Company's Common Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights. The Rights
Agreement provides that, as defined therein, the term "Acquiring Person" shall
not include Norman E. Alexander (and certain related Persons) who currently
beneficially own Voting Stock in excess of 50% of the voting power.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 31, 2010, unless earlier
redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Class A Common
Stock for Rights issued with respect to Class A Common Stock and Class B Common
Stock for Rights issued with respect to Class B Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.
Exchange of Rights
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Common Stock of the Company" above, the Board of
Directors may exchange the Rights (other than Rights owned by the Acquiring
Person which shall have become void), in whole or in part, at an exchange
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<PAGE>
ratio of one share of Class A Common Stock (or a fraction of a share of Junior
Preferred Stock having the same market value) per Class A Right (subject to
adjustment) and one share of Class B Common Stock (or a fraction of a share of
Junior Preferred Stock having the same market value) per Class B Right (subject
to adjustment).
Redemption of Rights
At any time prior to 5:00 P.M., New York City time, on the tenth
calendar day following the Shares Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the "Redemption
Price"). Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, the Company shall make announcement thereof, and
upon such action, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Rights Holder Not a Stockholder
Until a Right is exercised or exchanged, 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.
Terms of the Junior Preferred Stock
The Junior Preferred Stock will rank junior to all other series of the
Company's preferred stock (including, but not limited to, the $5.00 Cumulative
Convertible Preferred Stock) with respect to payment of dividends and as to
distributions of assets in liquidation. Each share of Junior Preferred Stock
will have a quarterly dividend rate per share equal to the greater of $10.00 or
1,000 times the per share amount of any dividend (other than a dividend payable
in shares of Common Stock or a subdivision of the Common Stock) declared from
time to time on the Class A Common Stock, subject to certain adjustments. The
Junior Preferred Stock will not be redeemable. Generally, in the event of
liquidation, the holders of each one one-thousandth of a share of the Junior
Preferred Stock will receive a payment equivalent to that received by the
holders of each share of Common Stock. Generally, each share of Junior Pre-
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<PAGE>
ferred Stock will vote together with the Common Stock and any other series of
cumulative preferred stock entitled to vote in such manner and will be entitled
to 1,000 votes, subject to certain adjustments. In the event of any merger,
consolidation, combination or other transaction in which shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or other
property, each share of Junior Preferred Stock will be entitled to receive 1,000
times the aggregate amount of stock, securities, cash and/or other property,
into which or for which each share of Common Stock is changed or exchanged,
subject to certain adjustments. The foregoing dividend, voting and liquidation
rights of the Junior Preferred Stock are protected against dilution in the event
that additional shares of Common Stock are issued pursuant to a stock split or
stock dividend or distribution. Because of the nature of the Junior Preferred
Stock's dividend, voting, liquidation and other rights, the value of the one
one-thousandth of a share of Junior Preferred Stock purchasable with each Right
is intended to approximate the value of one share of Common Stock.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
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
____, 2000. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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<PAGE>
EXHIBIT D
SEQUA CORPORATION
INCUMBENCY CERTIFICATE
I, Steven R. Lowson, do hereby certify that I am the Secretary of
Sequa Corporation, a Delaware Corporation (the "Company"), and do further
certify in such capacity that (i) the following named individuals are duly
appointed officers of the Company who hold the offices set forth opposite their
names, and (ii) the signature opposite the name and title of each such officer
is his true and correct signature:
<TABLE>
<CAPTION>
NAME OFFICE SIGNATURE
<S> <C> <C>
Norman E. Alexander Chairman of the Board and Chief _________________________________
Executive Officer
John J. Quicke President and Chief Operating Officer _________________________________
Stuart Z. Krinsly Senior Executive Vice President and _________________________________
General Counsel
Howard M. Leitner Senior Vice President, Finance _________________________________
Kenneth A. Drucker Vice President and Treasurer _________________________________
William P. Ksiazek Vice President and Controller _________________________________
Martin Weinstein Executive Vice President _________________________________
Steven R. Lowson Secretary _________________________________
D-1
<PAGE>
Mitchell D. Bittman Assistant Secretary _________________________________
</TABLE>
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of _____,
2000.
Steven R. Lowson
Secretary
I, _____, ______ of the Company, do hereby certify that Steven R.
Lowson is duly elected, qualified and acting Secretary of the Company, and that
his signature set forth above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of _____,
2000.
[Name]
[Title]
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<PAGE>
