SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SYNALLOY CORPORATION
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Delaware 57-0426694
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(State or other jurisdiction (IRS Employer
of organization) Identification No.)
Post Office Box 5627
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Spartanburg, South Carolina 29304
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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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None None
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. [ ]
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), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
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Item 1. Description of Registrant's Securities to be Registered.
On February 4, 1999, the Board of Directors of Synalloy Corporation
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, par value $1.00 per share (the "Common
Stock"), of the Company to stockholders of record at the close of business on
March 26, 1999 (the "Record Date"). Each Right entitles the registered holder to
purchase from the Company two-tenths (2/10ths) of one (1) share of Common Stock
at a Purchase Price of Twenty-Five Dollars ($25) per whole share, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and EquiServe Trust, a
Massachusetts trust company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date (subject to extension) will occur after the earlier of (i) the
first date of public announcement that a person or group of associated persons
(the "Acquiring Person") has acquired, or obtained the right to acquire,
twenty-two (22%) percent of the outstanding Common Stock of the Company (other
than pursuant to a transaction approved by the vote of the directors not
affiliated with the Acquiring Person) , (ii) the date any person announces an
intention to commence a tender or exchange offer for twenty-two (22%) percent or
more of the Company's Common Stock, or (iii) the determination that a beneficial
owner of twenty-two (22%) percent or more of the Common Stock is, in the opinion
of the Board, likely to engage in activities adverse to the Company and its
other stockholders (an "Adverse Person"). Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on March 26, 2009, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, generally only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
In the event that the Company is acquired in a merger or other business
combination transaction or fifty (50%) percent or more of its assets or earning
power are sold (in one transaction or a series of transactions), proper
provision shall be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction would have a market value of two (2) times
the exercise price of the Right. In the event an Acquiring Person shall become
the beneficial owner of twenty-two (22%) percent or more of the outstanding
Common Stock, or in the event that the Company is the surviving corporation in a
<PAGE>
merger with an Acquiring Person thereof and the Common Stock is not changed or
exchanged, or in the event that an Acquiring Person engages in certain
self-dealing transactions specified in the Rights Agreement, proper provision
shall be made so that each holder of a Right will thereafter have the right to
receive upon exercise that number of shares of Common Stock having a market
value of two (2) times the exercise price of the Right.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock securities convertible into Common Stock
at less than the current market price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidence of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least one (1%) percent of the
Purchase Price. No fractional shares will be issued and, in lieu thereof,
adjustment in cash will be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
At any time prior to the earliest of (i) the Distribution Date or (ii)
March 26, 2009, the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the company or for
common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of
the Rights (except as set forth above), 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, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
As of February 26, 1999, there were 6,725,629 shares (excluding
1,274,371 shares held in treasury) of the Company's Common Stock outstanding.
Each outstanding share of Common Stock on the Record Date will receive one (1)
Right. As long as the Rights are attached to the Common Stock, the Company will
issue one (1) Right with each new share of Common Stock.
<PAGE>
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors prior to the time a person or group acquired beneficial ownership of
twenty-two (22%) percent or more of the Common Stock, because until such time
the rights may be redeemed by the Company at $.01 per Right
The form of the Rights Agreement between the Company and the Rights
Agent which specifies the terms of the Rights and includes as Exhibit A the Form
of Right Certificate is attached hereto as Exhibit 1 and is incorporated by
reference. The foregoing description of the Rights is qualified by reference to
such exhibit.
Item 2. Exhibits.
A. Form of Rights Agreement, dated as of February 4, 1999,
between Synalloy Corporation and EquiServe Trust, which
includes as Exhibit A the Form of Right Certificate. Pursuant
to the Rights Agreement, Right Certificates will not be mailed
until the Distribution date (as defined in Item 1 of this Form
8-A).
Signature
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
(Registrant) Synalloy Corporation
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Date: March , 1999
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By: /s/ James G. Lane, Jr.
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James G. Lane, Jr.
Chairman and Chief Executive Officer
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of February 4, 1999 (the "Agreement"),
between Synalloy Corporation, a Delaware corporation (the "Company"), and
EquiServe Trust Company, N.A., a national banking association (the "Rights
Agent").
WHEREAS, in 1989, the Board of Directors of the Company authorized a
dividend distribution of one Right for each share of Common Stock outstanding on
March 26, 1988, representing the right to purchase, after the occurrence of
certain events, shares of Common Stock on the terms and conditions set forth in
the Rights Agreement dated as of March 26, 1988, as amended April 30, 1993,
between the Company and Wachovia Bank & Trust Company, N.A. (the "1988 Rights
Agreement");
WHEREAS, the Rights granted under the Rights Agreement will terminate
on March 26, l999;
WHEREAS, the Board of Directors of the Company, has determined that a
rights plan substantially similar to the l988 Rights Agreement is in the best
interests of the shareholders of the Company and has, accordingly, authorized
and declared on February 4, l999 (the "Rights Dividend Declaration Date"), a
dividend distribution of one Right for each share of Common Stock of the Company
outstanding at the close of business on March 26, 1999 (the "Record Date"); and,
in certain circumstances, after the Distribution Date each Right will initially
represent the right to purchase two-tenths (2/10ths) of one (1) share of Common
Stock upon the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has approved and
authorized the appointment of the Rights Agent;
WHEREAS, the Rights Agent desires to accept such appointment.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Acquiring Person" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial
Owner of twenty-two (22%) percent or more of the shares of
Common Stock then outstanding, but does not include (i) the
Company; (ii) any Subsidiary of the Company; (iii) any
employee benefit plan of the Company or of any Subsidiary of
the Company; (iv) any person organized, appointed or
established by the Company for or pursuant to the terms of
any such plan; (v) any person that becomes an Acquiring
Person pursuant to a Permitted Transaction; (vi) any Person
that that has become an Acquiring Person inadvertently and,
within five (5) Business Days of being requested by the
Company to advise it regarding the same, certifies to the
Company that such Person-acquired beneficial ownership of
shares of Common Stock in excess of twenty-two (22%) percent
inadvertently or without knowledge of the terms of the Rights
<PAGE>
and such certification is accepted as true by a Requisite
Majority acting in good faith, and such Person divests as
promptly as practicable a sufficient amount of Common Stock
so that such Person would no longer hold in excess of
twenty-two (22%) percent of the Common Stock then
outstanding; and (vii) any Person that becomes an Acquiring
Person solely as a result of a reduction in the number of
outstanding shares of Common Stock in a transaction that is
approved by a Requisite Majority, provided that such Person
will immediately be an Acquiring Person in the event such
Person thereafter acquires any additional shares of Common
Stock (other than as a result of a stock split or stock
dividend) while the Beneficial Owner of twenty-two (22%)
percent or more of the shares of Common Stock then
outstanding.
(c) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon a determination
of the Board of Directors that the criteria set forth in
Section 11(a)(ii)(B) apply to such Person.
(d) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act and in effect on the date
of this Agreement.
(e) A Person will be deemed the "Beneficial Owner" of, and will
be deemed to "beneficially own," any securities that:
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after
the passage of time or upon the occurrence of certain events)
pursuant to any agreement, arrangement, or understanding
(whether or not in writing) or upon the exercise of conversion
Rights, exchange Rights, Rights, warrants or options, or
otherwise; provided, however, that a Person will not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A)
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, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Distribution
Date or (C) securities issuable upon exercise of Rights, which
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) or Section 22 (the "Original Rights")
or pursuant to Section 11(1) in connection with an adjustment
made with respect to any Original Rights;
(ii) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
<PAGE>
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;
provided, however, that a Person will not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this Section 1(d)(ii) as a result of an agreement,
arrangement, or understanding: (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, provisions of the General Rules and Regulations
under the Exchange Act and (2) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such
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 in Section 1(d)(ii)), or
disposing of any voting securities of the Company;
provided, however, that nothing in this Section 1(d) will cause a
Person engaged in business as an underwriter of securities to be the "Beneficial
Owner' of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a bona fide firm commitment underwriting
until the expiration of forty (40) days after the date of such acquisition.
(f) "Business Day" means any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive
order to close.
(g) "Close of Business" on any given date will mean 5:00 p.m.,
Eastern Standard time on such date; provided, however, that
if such date is not a Business Day it will mean 5:00 p.m.,
Eastern Standard time, on the next succeeding Business Day.
(h) "Common Stock" means the Common Stock, par value $1.00 per
share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company will mean
the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest
having power to control or direct the management, of such
Person.
(i) "Continuing Director" means any member of the Board of
Directors of the Company who (i) is not an Acquiring Person
or an Adverse Person or an Affiliate or Associate of such
Person and (ii) was either a member of the Board of Directors
of the Company on the date of this Agreement or who
subsequently became a director of the Company and whose
initial election or initial nomination for election was
approved by a majority of the Continuing Directors then on
the Board of Directors of the Company.
<PAGE>
(j) "Distribution Date" means the Close of Business on the tenth
(10th) Business Day (unless extended by vote of a Requisite
Majority) after the earlier to occur of (i) the Stock
Acquisition Date, (ii) the determination by the Board of
Directors of the Company that a Person is an Adverse Person,
or (iii) the date any Person commences or publicly announces
an intention to commence a tender offer or exchange offer for
the Common Stock which would result in, upon the consummation
of such offer, the Person making such offer, together with
all of its Affiliates and Associations, being the Beneficial
Owner of twenty-two (22%) percent or more of the Common Stock
then outstanding (including any such date that is after the
date of this Agreement and prior to the issuance of the
Rights); provided, however, that if the tender offer or
exchange offer that gave rise to the Distribution Date is
cancelled, terminated or otherwise withdrawn within ten (10)
Business Days of its announcement, such offer shall be deemed
never to have been made and no Distribution Date shall occur
with respect thereto.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
(m) "Permitted Transaction" means a stock acquisition or a tender
or exchange offer pursuant to a definitive agreement by which
a Person (who is not at the time an Acquiring Person) would
become an Acquiring Person and which has been approved by
Requisite Majority prior to the execution of the definitive
agreement providing for the acquisition or the public
announcement of the offer, as the case may be.
(n) "Person" means any individual, firm, corporation,
partnership, limited liability Company or other public or
private entity.
(o) "Record Date" means the Close of Business on March 26, 1999.
(p) "Redemption Price" with respect to each Right means $.01 as
such amount may from time to time be adjusted in accordance
with Section 11. All references herein to the Redemption
Price means the Redemption Price as in effect at the time in
question.
(q) "Requisite Majority" means, at any time, the affirmative vote
of a majority of the Continuing Directors then in office.
(r) "Rights Dividend Declaration Date" is February 4, 1999, the
date the Board of Directors of the Company declared a
dividend distribution of one (1) Right for each share of
Common Stock outstanding on the Record Date.
(s) "Rights Shares" means the shares of Common Stock issuable or
issued upon the exercise of the Rights.
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(t) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii).
(u) "Section 13 Event" means any event described in clauses (i),
(ii) or (iii) of Section 13(a).
(v) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, will
include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become an
Acquiring Person.
(w) "Subsidiary" means, with reference to any Person, any entity
of which an amount of voting securities sufficient to elect
at least a majority of the directors or similar Persons of
such entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(x) "Trading Day" means a day on which the principal national
securities exchange or quotation system on which the shares
of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange, a Business Day.
(y) "Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
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 of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
pursuant to this Section or successor Rights Agents pursuant to Section 21 as it
may deem necessary or desirable, upon ten (10) days' prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Prior to the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of this Section 3(b)) by the
certificates for the Common Stock registered in the names of the
holders of Stock (which certificates for Stock will be deemed also to
be certificates for Rights) and not by separate certificates, and (ii)
the Rights will be transferable only in connection with the transfer of
the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
<PAGE>
Rights Agent will send by first-class, postage prepaid mail, to each
record holder of the Common Stock as of the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
Rights Certificates, in substantially the form of Exhibit A (the
"Rights Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided in this Agreement. In
the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p), at the time of
distribution of the Rights Certificates, the Company will make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a)) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) As soon as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form of
Exhibit B, by first class, postage prepaid mail, to each record holder
of the Common Stock as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced
by such certificates for the Common Stock and the registered holders of
the Common Stock will also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date (as defined in Section 7), the transfer of any certificates
representing shares of Common Stock in respect of which Rights have
been issued will also constitute the transfer of the Rights associated
with such shares of Common Stock.
(c) Rights will be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing
such shares of Common Stock will also be deemed to be certificates for
Rights, and will bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES
THE HOLDER TO CERTAIN RIGHTS AS SET FORTH IN
THE RIGHTS AGREEMENT BETWEEN SYNALLOY
CORPORATION (THE "COMPANY") AND EQUISERVE
TRUST COMPANY, N.A.(THE "RIGHTS AGENT")
DATED AS OF FEBRUARY 4, 1999 (AS AMENDED
FROM TIME TO TIME, THE "RIGHTS AGREEMENT"),
THE TERMS OF WHICH ARE HEREBY INCORPORATED
IN THIS CERTIFICATE BY REFERENCE AND A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES
OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES,
AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED
BY THIS CERTIFICATE. THE COMPANY WILL MAIL
TO THE HOLDER OF THIS CERTIFICATE A COPY OF
THE RIGHTS AGREEMENT, AS IN EFFECT ON THE
DATE OF MAILING, WITHOUT CHARGE PROMPTLY
AFTER RECIEPT OF A WRITTEN REQUEST. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED
BY ANY PERSON WHO IS, WAS, OR BECOMES AN
ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.
<PAGE>
With respect to the shares of Common Stock issued after the Record
Date, until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates will be evidenced by such certificates alone and registered holders
of Common Stock will also be the registered holders of the associated Rights,
and the transfer of any of such certificates will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse of the Rights
Certificates) will each be substantially in the form set forth in
Exhibit A and may have such marks of identification or designation and
such legends, summaries, or endorsements as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject
to the provisions of Section 11 and Section 22, the Rights
Certificates, whenever distributed, will be dated as of the Record Date
and on their face will entitle the holders of such Rights Certificates
to purchase such number of shares of Common Stock as is set forth in
such Rights Certificates at the price set forth in such Rights
Certificates (such exercise price per share, the "Purchase Price"), but
the amount and type of securities purchased upon the exercise of each
Right and the Purchase Price will be subject to adjustment as provided
in this Agreement.
(b) The Company may require that any Rights Certificate issued
pursuant to Section 3(a) or Section 22 hereof that represents rights
beneficially owned by: (i) an Acquiring Person, an Adverse Person or
any Associate or Affiliate of such Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee of an Acquiring
Person or Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
or Adverse Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person to holders of equity interests in
such Acquiring Person or Adverse Person or to any Person with whom such
Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is
part of a plan arrangement or understanding which has a primary purpose
or effect avoidance of Section 7(e) hereof, and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate
<PAGE>
referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Adverse Person or an Affiliate
or Associate of an Acquiring Person or an
Adverse Person (as such terms are defined in
the Rights Agreement). Accordingly, this
Rights Certificate and the Rights
represented hereby may become null and void
in the circumstances specified in Section
7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates will be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
Chief Financial Officer, its President or any Vice President, either
manually or by facsimile signature, will have affixed thereto the
Company's seal or a facsimile thereof, and will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Rights Certificates will be countersigned
by the Rights Agent, either manually or by facsimile signature and will
not be valid for any purpose unless so countersigned. In case any
officer of the Company who has signed any of the Rights Certificates
ceased to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect
as thought the Person who signed such Rights Certificates had not
ceased to be such officer of the Company, and any Rights Certificate
may be signed on behalf of the Company by any Person who, at the actual
date of the execution of such Rights Certificate, is a proper officer
of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights
Certificates issued under this Agreement. Such books will show the
names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on the face of the Rights
Certificates, and the date of each of the Rights Certificates.
<PAGE>
Section 6. Transfer, Split Up, Combination, and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost, or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), 7(e) and Section
14, at any time after the Distribution Date, and at or prior to the
Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined, or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of Rights Shares (or, following a Triggering
Event, Common Stock, other securities, cash, or other assets, as the
case may be) as the Rights Certificate or 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 Rights Certificate or Rights Certificates will
make such request in writing delivered to the Rights Agent, and will
surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined, or exchanged at the principal office
or offices of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company will be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder has completed and signed the
certificate contained in the form of assignment on the reverse side of
such Rights Certificate and has provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliations or Associates thereof as the Company requests in good
faith. Thereupon, the Rights Agent will, subject to Section 4, Section
7(e) and Section 14, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split up, combination, or exchange of
any Rights Certificate.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or
mutilation of a Rights Certificate, and, in case of loss, theft, or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed, or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
(a) Subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii), Section 23(a), and Section 24) in whole or in part at any
time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase, in substantially
the form of Exhibit C (the "Form of Election to Purchase") and the
certificate on the reverse side of the Rights Certificate duly
executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price for each share of Common Stock (or other
<PAGE>
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of
(i) the Close of Business on March 26, 2009 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 or (iii) the time at which such Rights are exchanged as
provided in Section 24 (the earlier of such times being the "Expiration
Date")).
(b) The Purchase Price for each whole share of Common Stock
pursuant to the exercise of a Right will initially be Twenty-Five and
no/100 Dollars ($25.00), subject to adjustment from time to time as
provided in Section 11 and Section 13(a). The Purchase Price will be
payable in accordance with Section 7(c).
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the Form of Election to Purchase and the certificate duly
executed, accompanied by payment of the Purchase Price for the shares
of Common Stock (or other shares, 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 will, subject to Section 20(k), promptly
(i)(A) requisition from any transfer agent of the shares of Common
Stock (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 purchase (the Company hereby irrevocably authorizing its
transfer agent to comply with all such requests) or (B) if the Company
has elected to deposit the shares of Common Stock with a depository
agent, requisition from the depository agent depository receipts
representing such number of shares of Common Sock as are to be
purchased (in which case certificates for the shares of Common Stock
represented by such receipts will be deposited by the transfer agent
with the depository agent) and the Company will direct the depository
agent to comply with such request; (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14; (iii) after receipt of such certificates or
depository receipts, cause such certificates or depository receipts to
be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder; and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such
Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii)) will be made in cash or
by certified bank check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash, or
distribute other property pursuant to Section 11(a), the Company will
make all arrangements necessary so that such other securities, cash, or
other property are available for distribution by the Rights Agent, if
and when appropriate. The Company reserves the right to require prior
to the occurrence of a Triggering Event, that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of
Common Stock would be issued.
<PAGE>
(d) If the registered holder of any Rights Certificate exercises
less than all the Rights evidenced by such certificate, a new Rights
Certificate evidencing the unexercisable Rights will be issued by the
Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as
may be designated by such older, subject to the provisions of Section
14.
(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 any Person referred to in clauses (i)
through (iii) below will become null and void without any further
action and no holder of such Rights will have any Rights whatsoever
with respect to such Rights, under any provision of this Agreement or
otherwise: (i) an Acquiring Person, an Adverse Person, or an Associate
or Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee from an Acquiring Person or an Adverse Person (or from any
Associate or Affiliate of such Person) that becomes a transferee after
the Acquiring Person or Adverse Person becomes such, or (iii) a
transferee from an Acquiring Person or an Adverse Person (or of any
Associate or Affiliate of such Person) that becomes a transferee prior
to or concurrently with the Acquiring Person or an Adverse Person
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration ) from the Acquiring Person
or the Adverse Person to holders of equity interests in such Acquiring
Person, Adverse Person or to any Person with whom the Acquiring Person
or the Adverse Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights or (B) a transfer that
the Board of Directors of the Company has determined is part of an
agreement, plan, arrangement, or understanding that has a substantial
purpose or effect the avoidance of this Section 7(e). The Company will
use reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) are complied with, but will have no liability
under this Agreement to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person, an Adverse Person, or any Affiliates,
Associates, or transferees thereof.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will 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 has (i) completed and signed the certificate
contained in the Form of Election to Purchase set forth on the reverse
side of the Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or associates thereof
as the Company requests in good faith.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, will be cancelled by it, and no Rights
Certificates will be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Company will deliver to the Rights
<PAGE>
Agent for cancellation and retirement, and the Rights Agent will so cancel and
retire, any other Rights Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent will deliver all
cancelled Rights Certificates to the Company, or will, at the written request of
the Company, destroy such cancelled Rights Certificates, and in such case will
deliver a certificate of destruction to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company will use its best efforts to reserve and keep
available out of its authorized and unissued shares of Commons Stock
(and/or other securities) or its authorized and issued shares of Common
Stock (and/or other securities) held in its treasury, the number of
shares of Common Stock (and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and, following the
occurrence of a Triggering Event, Common Stock or other securities)
issuable and deliverable upon the exercise of the Rights may be listed
on any national securities exchange or automated quotation system, the
Company will use its reasonable efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange or automated quotation system
upon official notice of issuance upon such exercise.
(c) The Company will use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Section 11 (a)(ii)
Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii), a registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights or issued in an
exchange pursuant to Section 24 on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities, and (B) the Expiration Date.
The Company will also take such action as may be appropriate under, or
to ensure compliance with, the applicable state securities laws in
<PAGE>
connection with the exercisability of the Rights. The Company may
temporarily suspend, for up to ninety (90) days after the date
described in clause (i) 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. Upon any such suspension, the Company
will issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension no longer remains in effect. In
addition, if the Company determines that a registration statement is
required following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction if the requisite qualification in such
jurisdiction ahs not been obtained, the exercise of such Rights is not
permitted under applicable law, or a registration statement has not
been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock
(and/or other securities) delivered upon exercise of Rights will, at
the time of delivery of the certificates for such shares upon payment
of the Purchase Price, be duly and validly authorized and issued and
fully paid and non-assessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of
Common Stock (or other securities, as the case may be) in respect of a
name other than that of the registered holder of the Rights
Certificates or to issue or deliver any Common Stock or other
certificates in a name other than that of the registered holder until
such tax has been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any Rights
Share certificate is issued will, for all purposes, be deemed to have become the
record holder of such Rights Shares represented thereby, and such certificate
will be dated, on the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Stock (or other
securities, as the case may be) transfer books of the Company are closed, such
Person will be deemed to have become the record holder of the Rights Shares on,
and such certificate will be dated, the next succeeding Business Day on which
the Common Stock (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
Rights Certificate holders will not be entitled to any stockholder Rights with
respect to Rights Shares, including, without limitation, the right to vote, to
receive dividends or other distributions, or to exercise any preemptive Rights,
and will not be entitled to receive any notice of any proceedings of the
Company, except a provided in this Agreement.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares, or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
<PAGE>
(a)
(i) In the event the Company at any time after the date
of this Agreement (A) declares a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivides the
outstanding Common Stock, (C) combines the outstanding Common
Stock into a smaller number of shares, or (D) issues any
shares of its capital stock in a reclassification of the
Common Stock (including, without limitation, 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), 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 Common Stock or capital
stock, as the case may be, issuable on such date, will be
proportionately adjusted so that the holder of any Right
exercised after such time will be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Common Stock or capital stock, as
the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination,
or reclassification. If an event occurs that 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) will be in addition to, and will be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that
(A) any Person, alone or together with its
Affiliates and Associates, at any time after the
Rights Dividend Declaration Date, becomes an
Acquiring Person, or
(B) the Board of Directors of the Company shall
declare any Person to be an Adverse Person, after (x)
a determination that such Person, alone or together
with its Affiliates and Associates, has become the
Beneficial Owner of twenty-two (22%) percent or more
of the outstanding shares of Common Stock and (y) a
determination by the Board of Directors, after
reasonable inquiry and investigation, including such
consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such
Beneficial Ownership by such person is intended to
cause, is reasonably likely to cause or will cause
the Company to repurchase the Common Stock
beneficially owned by such Person or to cause
pressure on the Company to take action or enter into
<PAGE>
a transaction or series of transactions which would
provide such Person with short-term financial gain
under circumstances where the Board of Directors
determines that the best long-term interests of the
Company and its shareholders, but for the actions and
possible actions of such Person, would not be served
by taking such action or entering into such
transactions or series of transactions at that time
or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of
relationships with customers or impairment of the
Company's ability to maintain its competitive
position) on the business or prospects of the
Company; provided, however, that the Board of
Directors of the Company may not declare a Person to
be an Adverse Person if, prior to the time that such
Person acquired twenty-two (22%) percent or more of
the shares of Common Stock then outstanding, such
Person provided to the Board of Directors in writing
a statement of such Person's purpose and intentions
in connection with the proposed acquisition of Common
Stock, together with any other information reasonably
requested of such Person by the Board of Directors,
and the Board of Directors, based on such statement
and reasonable inquiry and investigation, including
such consultation, if any, with such persons as the
Directors shall deem appropriate, determines to
notify and notifies such Person in writing that it
will not declare such Person to be an Adverse Person;
provided further, that the Board of Directors may
expressly condition in any manner a determination not
to declare a Person an Adverse Person on such
conditions as the Board of Directors may select,
including without limitation, such Person's not
acquiring more than a specified amount of stock
and/or on such Person's not taking actions
inconsistent with the purposes and intentions
disclosed by such Person in the statement provided to
the Board of Directors. No delay or failure by the
Board of Directors to declare a Person to be an
Adverse Person shall in any way waive or otherwise
affect the power of the Directors subsequently to
declare a Person to be an Adverse Person. In the
event that the Board of Directors should at any time
determine, upon reasonable inquiry and
investigations, including consultation with such
persons as the Directors shall deem appropriate, that
such Person has not met or complied with any
condition specified by the Board of Directors, the
Directors may at any time thereafter declare such
Person to be an Adverse Person pursuant to the
provisions of this Section 11(a)(ii)(B)
then, proper provision will be made so that each Right holder
(except as provided in Section 7(e)) will thereafter have the
right to receive, upon exercise of such Right at the then
<PAGE>
current Purchase Price in accordance with the terms of this
Agreement, such number of Rights Shares equal to the result
obtained by (x) multiplying the then current Purchase Priced
by the then number of Rights Shares for which a Right is then
exercisable times 5 and (y) dividing that product by fifty
(50%) percent of the current Market Price (defined in Section
11(d)) per share of Common Stock on the date such Person
became an Acquiring Person or an Adverse Person (such number
of Rights Shares, the "Adjustment Shares"). For example, if
the then Purchase Price for a share of Common Stock is $25.00
and the then current market price is $10.00 per share, a
holder of a Right on payment of $25.00 shall be entitled to
receive five (5) shares of Common Stock
(25 x .2 x 5)
-------------
(.50) (10)
(iii) In the event that the number of shares of
Common Stock that are authorized by the Company's articles of
incorporation but not issued, or issued but not outstanding,
are not sufficient to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii), the Company will,
upon the exercise of a Right and payment of the applicable
Purchase Price, (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current
Value"), and (B) with respect to each Right (subject to
Section 7(e)), make adequate provision to substitute for the
Adjustment Shares (1) cash, (2) reduction in the Purchase
Price, (3) other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred
stock), that a Requisite Majority has deemed to have
essentially the same Rights, privileges and preferences as
shares of Common 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
conclusively determined by a Requisite Majority based upon the
advice of a nationally recognized investment banking firm
selected by a Requisite Majority; provided, however, that if
the Company has not made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the first occurrence of a Section 11(a)(ii) Event, then the
Company will be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares or cash
have an aggregate value equal to the Spread. The term "Spread'
means the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board of Directors determines 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 30-day period set forth above may be
extended to the extent necessary, but no more than ninety (90)
days after the Section 11(a)(ii) Triggering Event, in order
that the Company may seek shareholder approval for the
authorization of such additional shares (such 30-day period,
as it may be extended, being the "Substitution Period"). To
the extent that action is to be taken pursuant to this Section
11(a)(iii), the Company (1) will provide, subject to Section
7(e), that such action will apply uniformly to all outstanding
<PAGE>
Rights, and (2) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to
seek any required shareholder approval or to decide the
appropriate form of distribution to be made and the value
thereof. In the event of any such suspension, the Company will
issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension no longer remains
in effect. For purposes of this Section 11(a)(iii), the
Current Value of each Adjustment Share will be the Current
Market Price per share of the Common Stock on the effective
date of the Section 11(a)(ii) Event and the per share or per
unit value of any Common Stock Equivalent will be deemed to
equal the Current Market Price per share of the Common Stock
on such date.
(b) In case the Company fixes a record date for the issuance of
Rights, options or warrants to all holders of Common Stock entitling
them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Common Stock
(and/or Common Stock Equivalents) (or securities convertible into
Common Stock) at a price per share of Common Stock (or having a
conversion price per share, if a security convertible into Common
Stock) less than the Current Market Price per share of Common Stock on
such record date, the Purchase Price to be in effect after such record
date will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, (i) the numerator
of which is the number of shares of Common Stock outstanding on such
record date, plus the number of shares of Common Stock that the
aggregate offering price of the total number of shares of Common Stock
(and/or Common Stock Equivalents ) so to be offered (or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and (ii) the
denominator of which is the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares
of Common Stock (and/or Common Stock Equivalents) to be offered for
subscription or purchase (or into which the convertible securities so
to be entered are initially convertible). In the event that the number
of shares of Common Stock issuable under the terms of a convertible
security, or the conversion or exercise price of such convertible
security, changes after the initial issuance of such convertible
security, an adjustment will be made to the Purchase Price that
conforms with the adjustment set forth in this Section 11(b). In case
such subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such
consideration will be as conclusively determined in good faith by the
Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent and will be
binding on the Rights Agent and the holders of the Rights. Shares of
Common Stock owned by or held for the account of the Company will be
deemed not to be outstanding for the purpose of any such computation.
Such adjustment will be made successively whenever such a record date
is fixed, and in the event that such Rights or warrants are not so
issued, the Purchase Price will be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(c) In case the Company fixes a record date for a distribution to
all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than
a regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in
Common Stock, but including any dividend payable in stock other than
<PAGE>
Common 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 will be determined by multiplying the Purchase price
in effect immediately prior to such record date by a fraction, (i) the
numerator of which is the Current Market Price per share of Common
Stock on such record ate, less the fair market value (as conclusively
determined in good faith by the Board of Directors of the Company,
whose determination will be described in a statement filed with the
Rights Agent) of the portion of the cash, assets, or evidences of
indebtedness so to be distributed or of such subscription Rights or
warrants applicable to a share of Common Stock and (ii) the denominator
of which is such Current Market Price per share of Common Stock. Such
adjustments will be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the
Purchase Price will be adjusted to be the Purchase Price that would
have been in effect if such record date had not been fixed.
(d) The "Current Market Price" per share of Common Stock on any
date will be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive Trading Days
immediately prior to such date; provided, however, that in the event
that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (i) a dividend or distribution on such Common
Stock payable in shares of such Common Stock (other than the Rights),
or (ii) any subdivision, combination, or reclassification of such
Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination, or
reclassification has not occurred prior to the commencement of the
requisite thirty (30) Trading Day period, as set forth above, then and
in each such case, the Current Market Price will be properly adjusted
to take into account ex-dividend trading. The closing price for each
day will be the last sales price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use, or, if on any such
date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market and will be
conclusive for all purposes.
<PAGE>
(e) Anything in this Agreement to the contrary notwithstanding, no
adjustment in the Purchase Price will be required unless such
adjustment would require an increase or decrease of at least one (1%)
percent in the Purchase Price; provided, however, that any adjustments
that by reason of this section 11(e) are not required to be made will
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 will be made to the nearest cent
or to the nearest one-hundredth of a share of Common Stock.
Notwithstanding the first sentence of this section 11(e), any
adjustment required by this Section 11 will be made no later than the
earlier of (i) three (3) years from the date of the transaction that
mandates such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter
exercised becomes entitled to receive any shares of capital stock other
than Common Stock, then the number of such other shares so receivable
upon exercise of any Right and the Purchase Price will 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 Common
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j),
(k), (m) and (q) and the provisions of Sections 9, 10, 13 and 14 with
respect to the Common Stock will 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 under this Agreement will
evidence the right to purchase, at the adjusted Purchase Price, the
number of Rights Shares purchasable from time to time under this
Agreement, all subject to further adjustment as provided in this
Agreement.
(h) Unless the Company has 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 will
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of Rights Shares (calculated to the nearest
one-hundredth) obtained by (i) multiplying (x) the number of Rights
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 lieu of any
adjustment in the number of Rights Shares purchasable upon the exercise
of a Right. Each of the Rights outstanding after such an adjustment in
the number of Rights will be exercisable for the number of Rights
Shares 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 will become that number of Rights (calculated to the
nearest one-hundredth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company will make a public announcement of its election to
<PAGE>
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter but, if the Rights Certificates have
been issued, will be at least ten (10) Business Days later than the
date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company will, as promptly as practicable, cause to
be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14, the
additional Rights to which such holders are entitled as a result of
such adjustment, or, at the option of the Company, will cause to be
distributed to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders are
entitled after such adjustment. Rights Certificates so to be
distributed will be issued, executed, and countersigned in the manner
provided for in this Agreement (and may bear, at the option of the
Company, the adjusted Purchase Price) and will be registered in the
names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the Rights Shares, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per Rights
Shares and the number of Rights Shares that were expressed in the
initial Rights Certificates issued under this Agreement.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
number of Rights Shares, the Company will take any corporate action
that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such number of fully paid and
non-assessable Rights Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 requires 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 number of Rights Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Rights Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company will deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
<PAGE>
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company will be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that, in its good faith judgment, the
Board of Directors of the Company determines it to be advisable in
order that any (i) consolidation or subdivision of the Common Stock,
(ii) issuance wholly for cash of any shares of Common Stock at less
than the current market price, (ii) issuance wholly for cash of shares
of Common Stock or securities that by their terms are convertible into
or exchangeable for shares of Common Stock, (iv) stock dividends, or
(v) issuance of Rights, options, or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common
Stock will not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not, at any time
after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), (ii) merger with, from, or into any other Person
(other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than
fifty (50%) percent 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 or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if (x) 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 that could reasonably be expected
to substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with, or
immediately after, such consolidation, merger, or sale, the
stockholders of the Person that constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, in
the event that the Company at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding shares of Common Stock,
or (iii) combines 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, will be proportionately adjusted so
that the number of Rights thereafter associated with each share of
Common Stock following any such event will 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 is the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which is the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
<PAGE>
(q) In the event that the Rights become exercisable following a
Section 11(a)(ii) Event, the Company, by action of a Requisite
Majority, may permit the Rights, subject to Section 7(e), to be
exercised for fifty (50%) percent of the shares of Common Stock (or
cash or other securities or assets to be substituted for the Adjustment
Shares pursuant to Section 11(a)(iii)) that would otherwise be
purchasable under Section 11(a) in consideration of the surrender to
the Company of the Rights so exercised and without other payment of the
Purchase Price. Rights exercised under this Section 11(q) will be
deemed to have been exercised in full and will be cancelled.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Common Stock, a
copy of such certificate, and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to t he Distribution Date, to each holder of
a certificate representing shares of Common Stock) in accordance with Section
25. The Rights Agent will be fully protected in relying on any such certificate
and on any adjustment contained in such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) Except in a Permitted Transaction, in the event that,
following the Stock Acquisition Date, directly or indirectly, (i) the
Company consolidates with, or merges with, or into, any other Person
(other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), and the Company is not the continuing or surviving
Person of such consolidation or merger; (ii) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section
11(o)) consolidates with, or merges with, or into, the Company, and the
Company is the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock is
changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or (iii) the Company sells or
otherwise transfer (or one or more of its Subsidiaries sells or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than fifty (50%)
percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than
the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o)), then, and in
each such case (except as contemplated by Section 13(d)), proper
provision will be made so that (A) each holder of a Right, except as
provided in Section 7(e) or Section 13(e), will thereafter have the
right to receive, upon the exercise of such Right at the then current
Purchase Price in accordance with the terms of this Agreement, such
<PAGE>
number of validly authorized and issued, fully paid, non-assessable,
and freely tradable shares of Common Stock of the Principal Party (as
defined below), not subject to any liens, encumbrances, preemptive
rights, rights of first refusal, or other adverse claims, as are equal
to the result obtained by (1) multiplying the then current Purchase
Price by the number of Rights Shares for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or if
a Section 11(a)(ii) Event has occurred prior to the first occurrence of
a Section 13 Event, multiplying the number of such Rights Shares for
which a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence) times 5, and (2) dividing
that product (which, following the first occurrence of a Section 13
Event, will be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by fifty (50%) percent of the
Current Market Price per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event; (B) such
Principal Party will thereafter be liable for, and will assume, by
virtue of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" will
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 will apply only
to such Principal Party following the first occurrence of a Section 13
Event; (D) such Principal Party will take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions of this
Agreement will thereafter be applicable, as nearly as may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (E) the provisions of Section 11(a)(ii)
will be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" means
(i) in the case of any transaction described in clause
(i) or (ii) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered,
"Principal Party" will refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or indirectly, of
more than one (1) Person, with Common Stock that is and has
been so registered, "Principal Party" will refer to whichever
of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
<PAGE>
(c) The Company will not consummate any such consolidation,
merger, sale, or transfer unless the Principal Party has a sufficient
number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party have executed and delivered to the
Rights Agent a supplemental agreement providing for the Principal Party
to assume and perform the terms set forth in Sections 13(A) and (B) and
further providing that, as soon as practicable after the date of any
consolidation, merger, or transfer mentioned in Section 13(a), the
Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In the event that the Rights become exercisable under Section
13(A), the Company, by action of a Requisite Majority, may agree with
the Principal Party that the Principal Party may permit the Rights to
be exercised for fifty (50%) percent of the Common Shares of the
Principal Party that would otherwise be purchasable under Section
13(a), in consideration of the surrender to the Principal Party, as the
successor to the Company under Section 13(a)(ii), of the Rights so
exercised and without other payment of the Purchase Price. Rights
exercised under this Section 13(e) will be deemed to have been
exercised in full and cancelled.
(e) The provision of this Section 13 will apply to successive
mergers, consolidations, and sales or other transfers. In the event a
Section 13 Event occurs at any time after the occurrence of a Section
11(a)(ii) Event, the Rights that have not theretofore been exercised
will thereafter become exercisable in the manner described in Section
13(a).
<PAGE>
Section 14. Fractional Rights and Fractional Shares
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p), or
to distribute Rights Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there will be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right will be
the closing price of the Rights for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day will 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 law 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
conclusively determined in good faith by the Board of Directors of the
Company will be used.
(b) The Company will not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Common Stock. In lieu
of fractional shares of Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as provided in this Agreement an amount in cash equal to the
same fraction of the Current Market Price of one (1) share of Common
Stock as of the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right, by the acceptance of the Rights,
expressly waives the right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action, or other
proceeding against the Company to enforce, or otherwise act in respect of, its
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under this Agreement and injunctive relief against actual or
threatened violations of the obligations under this Agreement of any Person
subject to this Agreement.
<PAGE>
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the Rights consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that: ---------------------------
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorse or accompanied by a proper
instrument of transfer, and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights
Agent, will 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 will have any liability to any
holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree, or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory, or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company will use
its reasonable best efforts to have any such order, decree, or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate will be entitled to vote or receive dividends
or be deemed for any purpose the holder of the number of shares of Common Stock
or any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor will anything contained in this
Agreement or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for e election of directors or upon any matter
submitted to stockholders, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 25), or to receive dividends or subscription
rights, or otherwise, until the Right or rights evidenced by such Rights
Certificate have been exercised in accordance with the provisions of this
Agreement.
<PAGE>
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties under this Agreement. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expenses, incurred without
gross negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of
defending against any claim of liability.
(b) The Rights Agent will be protected and will incur no liability
for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by
it to be genuine and to be signed, executed, and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into or with which the Rights Agent may be merged
or with which it may be consolidated, or any person resulting from any
merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights Agent, will 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 to this Agreement; provided, however, that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21. In case at the time such
successor Rights Agent succeeds to the agency created by this
Agreement, any of the Rights Certificates have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates have not bee countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of
the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
<PAGE>
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name, and in
all such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance of such Rights Certificates, will be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person or Adverse Person and the determination of "Current Market
Price") be proved or established by the Company prior to taking or
suffering any action under this Agreement, such fact or matter (unless
other evidence in respect of such fact or matter is specifically
prescribed in this Agreement) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the Board,
the Chief Executive Officer, the Chief Operating Officer, the
President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary, or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate will be full authorization to
the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable under this Agreement only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such
statements and recitals are and will be deemed to have been made by the
Company only.
<PAGE>
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
of this Agreement (except the due execution of this Agreement by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature); nor will it be responsible
for any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor will it be responsible
for any adjustment required under the provisions of Section 11 or
Section 13, or responsible for the manner, method, or amount of any
such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor will it by any act under this Agreement be deemed
to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Common Stock will, when so issued, be validly authorized or issued,
fully paid, or non-assessable.
(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 under this
Agreement from the Chairman of the board, the Chief Executive Officer,
the Chief Operating Officer, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
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 in this Agreement will 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 vested by this Agreement in it or perform any duty under this
Agreement either itself or by or through its attorneys or agents, and
the Rights Agent will 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 resulting from any such act, default neglect,
or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment of such Person.
<PAGE>
(j) No provision of this Agreement will 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 under this Agreement
or in the exercise of its rights if there are reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 or 2 of such certificate, the Rights Agent will not take any
further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails 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
Rights Certificate (who will, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, will be a corporation organized and doing
business under the laws of the United States or a State of the United States, in
good standing, that is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and that has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000. After appointment, the successor
Rights Agent will 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, except that the predecessor Rights Agent will deliver and
transfer to the successor Rights Agent any property at the time held by it under
this Agreement and execute and deliver and transfer to the successor Rights
Agent any property at the time held by it under this Agreement 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
will file notice of such appointment in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Common Stock, and mail a notice of such appointment in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect in such notice, will 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.
<PAGE>
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
in its discretion, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number, kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the Expiration Date, the Company (a) will, 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, granted or awarded as of the
Distribution Date, or upon the exercise, conversion, or exchange of securities
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 Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (y) no such Rights Certificate will be issued
if, and to the extent that, the Company is advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (z)
no such Rights Certificate will be issued if, and to the extent that,
appropriate adjustment has otherwise been made in lieu of the issuance of such
Rights Certificate.
Section 23. Redemption and Termination.
(a) The Company may, at its option, by action of a Requisite
Majority, at any time prior to the earlier of (i) the Distribution
Date, or (ii) the Final Expiration Date, redeem all but not fewer than
all the then outstanding Rights at the Redemption Price (the date of
such redemption, the "Redemption Date"), and the Company, at its
option, may pay the Redemption Price either in cash or Common Stock or
other securities of the Company, deemed by the Board of Directors, in
the exercise of its sole discretion, to be at least equivalent in value
to the Redemption Price.
(b) Immediately upon the action of a Requisite Majority ordering
the redemption of the Rights, evidence of which has been filed with the
Rights Agent and without further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption
Price. Promptly after the action of a Requisite Majority ordering the
redemption of the Rights, the Company will give notice of such
redemption to the Rights Agent and to the holders of the then
outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Any notice that is mailed in the manner in this
Agreement provided will be deemed given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail,
or any defect in the notice, to any particular holder of Rights shall
not affect the sufficiency of the notice to other holders of Rights.
<PAGE>
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after a Triggering Event, exchange all or part of the
outstanding and exercisable Rights (which will not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for
shares of Common Stock, each Right being exchangeable for two-tenths
(2/10ths) share of Common Stock, appropriately adjusted to reflect any
transaction specified in Section 11(a)(i) occurring after the Record
Date (such number of shares of Common Stock issuable in exchange for
two-tenths (2/10ths) Right being referred to herein as the "Exchange
Shares"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any of its Subsidiaries or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such Plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of fifty
(50%) percent or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (1)
of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive the
Exchange Shares. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding, or authorized but unissued, to permit any
exchange of Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional Common Stock for issuance upon exchange of the Rights or
shall take such other action specified in Section 11(a)(iii) hereof.
<PAGE>
(d) The Company shall not be required to issue fractions of shares
of Common Stock to distribute certificates which evidence fractional
Common Stock. In lieu of such fractional shares, the Company shall pay
to the registered holders of the Rights Certificates with regard to
which such fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the Current Market Price of a whole
share of Common Stock. For the purposes of this subsection (d), the
Current Market Value of a whole share of Common Stock shall be
determined as of the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company proposes, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Common Stock or to make any other distribution
to the holders of Common Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii)
to offer to the holders of Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Common stock or shares of
stock of any class or any other securities, rights or options, or (iii)
to effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding shares
of Common Stock), or (iv) to effect any consolidation or merger into,
or with any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o)), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), on one transaction or a series or related
transactions, of more than fifty (50%) percent 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 or any of its
Subsidiaries in one or more transaction each of which complies with
Section 11(o)), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company will
give to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26, a notice of such proposed action, which
will specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up of the Company, then, in each such case, the
Company will give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26, a notice of such proposed
action, which will specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Common Stock,
if any such date is to be fixed, and such notice will be so given in
the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of
the shares of Common Stock for purposes of such action, and in the case
of any such other action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation
therein by the holders of the shares of Common Stock, whichever is the
earlier.
<PAGE>
(b) In case of Section 11(a)(ii) Event, then (1) the Company will
as soon as practicable give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26, a notice of the
occurrence of such event, which will specify the event and the
consequences of the event to holders of Rights under this Agreement.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company will 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:
Synalloy Corporation
Post Office Box 5627
Spartanburg, SC 29304
with a copy to:
Haynsworth, Marion, McKay & Guerard, L.L.P.
P.O. Box 2048
Greenville, SC 29602
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent will 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:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
150 Royal Street
Canton, MA 02021
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent tot he holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) will 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 27. Supplement and Amendments. Prior to the Distribution Date, the
Company and the Rights Agent shall, if so directed by the Company, may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights in order to cure any ambiguity, to
correct or supplement any provision contained in this Agreement that may be
defective or inconsistent with any other provisions in this Agreement, to
shorten or lengthen any time period, or to make any other provisions in regard
<PAGE>
to matters or questions arising under this Agreement that the Company and Rights
Agent may deem necessary or desirable and that will be consistent with, and for
the purpose of fulfilling, the objectives of the Board of Directors in adopting
this Agreement; provided, however, that a following the Distribution Date, this
Agreement shall not be amended in any manner that would adversely affect the
basic economic terms of the Rights. Notwithstanding the foregoing, once the
Rights are no longer redeemable in accordance with section 23 of this Agreement,
no amendment to this Agreement may have the effect of making the Rights
redeemable.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent will bind and inure to
the benefit of their respective successors and assigns under this Agreement.
Section 29. Determination and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, will be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company (with, where specifically provided for in this
Agreement, the concurrence of the Continuing Directors) will have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors (with, where specifically
provided for in this Agreement, the concurrence of the Continuing Directors) or
to the Company, or as may be necessary or advisable in the Administration of
this Agreement, including, without limitation, the rights and power to (a)
interpret the provisions of this Agreement, and (b) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights, to amend the Agreement or to extend the Distribution Date). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors (with, where specifically provided
for in this Agreement, the concurrence of the Continuing Directors) in good
faith, will (x) be final, conclusive, and binding on the Company, the Rights
Agent, the holders of the Rights, and all other parties, and (y) not subject the
Board of Directors or the Continuing Directors to any liability to the holders
of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy, or claim under this Agreement; and this Agreement will
be for the sole and exclusive benefit of the Company, the Rights Agent, and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
<PAGE>
Section 31. Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, or unenforceable, the remainder of the terms,
provisions, covenants, and restrictions of this Agreement will remain in full
force and effect and will in no way be affected, impaired, or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant, or restriction is held by such
court or authority to be invalid, void, or unenforceable and 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 23 will
be reinstated and will not expire until the Close of Business on the tenth
(10th) Business Day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provision requiring action by
a Requisite Majority is held by any court of competent jurisdiction or other
authority to be invalid, void, or unenforceable, such determination will then be
made by the Board of Directors of the Company in accordance with applicable law
and the Company's articles of incorporation and bylaws.
Section 32. Governing Law. This Agreement, each Right, and each Rights
Certificate issued under this Agreement will be deemed to be a contract made
under the laws of the State of Delaware and for all purposes will be governed by
and construed in accordance with the laws of such state applicable to contracts
made and to be performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to be
an original, and all such counterparts will together constitute but one and the
same instrument.
Section 34. Interpretation. Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and will not control or affect
the meaning or construction of any of the provisions of this Agreement.
References in this Agreement to Sections and Exhibits are references to the
Sections of, and Exhibits to, this Agreement unless the context requires
otherwise. In this Agreement, the word "or" is not exclusive.
<PAGE>
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.
SYNALLOY CORPORATION
By: /s/ James G. Lane, Jr.
------------------------------------
Name: James G. Lane, Jr.
------------------------------------
Its: Chairman and Chief Executive Officer
------------------------------------
EQUISERVE TRUST COMPANY, N.A.
By: /s/ Darlene M. DioDato
------------------------------------
Name: Darlene M. DioDato
------------------------------------
Its: Managing Partner
------------------------------------
<PAGE>
Exhibit "A" to Rights Agreement
Rights Certificate No. ____
[FORM OF RIGHTS CERTIFICATE]
_______ Rights
NOT EXERCISABLE AFTER MARCH 26, 2009 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED INT HER RIGHTS AGREEMENT) AND BY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
Rights Certificate
SYNALLOY CORPORATION
This certifies that ___________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of February 4, 1999, (as amended from time to time,
the "Rights Agreement"), between Synalloy Corporation, a Delaware corporation
(the "Company"), and ____________________ (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 p.m. (South Carolina time) on March 26,
1999, at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent two-tenths (2/10ths) of one (1) share of
Common Stock (the "Common Stock") of the Company, at a purchase price of
Twenty-Five Dollars ($25) per share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares that 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 March 26, 1999, based on the Common Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Common Stock or other securities,
that may be purchased upon the exercise of the rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions are
incorporated herein by reference and made a part of this Certificate and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties, and immunities hereunder of
the Rights Agent, the Company, and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the certain circumstances set forth in the Rights Agreement.
<PAGE>
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written request to the
Rights Agent. All capitalized terms not otherwise defined have the meaning set
forth in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Adverse Person or an Affiliate or Associate of any such Person,
(ii) a transferee of any such Acquiring Person or Adverse Person or an Associate
or Affiliate of such Person, 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 Adverse Person or an Affiliate or Associate of such
Person, such Rights will become null and void and no holder of this Certificate
will have any right with respect to such Rights from and after the occurrence of
such Section 11(a)(ii) Event.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered have
entitled such holder to purchase. If this Rights Certificate is exercised in
part, the holder will be entitled to receive upon surrender of this Certificate
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
priced of $0.01 per Right. In addition, in certain circumstances the Rights may
be exchanged, in whole or in part, for shares of the Common Stock. 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 that are not subject to such exchange) will terminate and the Rights will
only enable holders to receive the shares issuable upon such exchange. Under
certain circumstances set forth in the Rights Agreement, the decision to redeem
the Rights will require the concurrence of a majority of the Continuing
Directors.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate will be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Company that may at any time be issuable
on the exercise hereof, nor will anything contained in the Rights Agreement or
herein be construed to confer upon the holder of this 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 the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or rights evidenced by this Rights
Certificate have been exercised as provided in the Rights Agreement.
<PAGE>
This Rights Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of: _____________________
ATTEST: SYNALLOY CORPORATION
- ---------------------------------
By: _______________________________
Its: _______________________________
Countersigned:
By: ___________________________
Authorized Signature
<PAGE>
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns, and transfer unto __________________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Please print name and address of transferee)
This Rights Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint
____________________- attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution. The
undersigned acknowledges that this Assignment is voidable by the Company if it
contains any material misstatement of fact by the transferor.
Dated: ______________________ __________________________________
Signature
Signature Guaranteed:
- -------------------------------------
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
1. this Rights Certificate [ ] is [ ] is not being sold, assigned, or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Adverse Person or an Affiliate or Associate of any such 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 Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an Adverse
Person or an Affiliate or Associate of such Person.
<PAGE>
Dated: ______________________ __________________________________
Signature
Signature Guaranteed:
- -------------------------------------
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United State.
<PAGE>
Exhibit "B" to the Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SYNALLOY CORPORATION COMMON STOCK
On February 4, 1999, the Board of Directors of Synalloy Corporation
(the "Company") declared a dividend of one (1) common share purchase right (a
"Right") for each outstanding share of common stock, One Dollar ($1.00) par
value per share (the "Common Shares"), of the Company. The dividend was made to
the shareholders of record at the close of business on March 26, 1999 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company two-tenths (2/10ths) of one (1) Common Share, at a price of Twenty-Five
Dollars ($25) per whole share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of February 4, 1999 (the "Rights Agreement") between the Company and
__________________, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) Business Days following a
public announcement that a person or group of affiliated or associated persons
has acquired, or obtained the right to acquire, beneficial ownership of
twenty-two (22%) percent or more of the outstanding Common Shares (an "Acquiring
Person"); (ii) ten (10) Business Days following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer, the
consummation of which would result in the beneficial ownership by a person or
group of twenty-two (22%) percent or more of such outstanding Common Shares; or
(iii) declaration by the Board of Directors that any Person is an "Adverse
Person" (the earlier of such dates being the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached to the certificate. A majority of the
Continuing Directors (not associated with the Acquiring Person or an Adverse
Person) may in their discretion vote to extend the Distribution Date.
An "Adverse Person" is a person that, after (x) a determination that
such Person, alone or together with its Affiliates and Associates, has become
the Beneficial Owner of twenty-two (22%) percent or more of the outstanding
shares of Common Stock and (y) a determination by the Board of Directors, after
reasonable inquiry and investigation, including such consultation, if any, with
such persons as such directors shall deem appropriate, that (a) such Beneficial
Ownership by such person is intended to cause, is reasonably likely to cause or
will cause the Company to repurchase the Common Stock beneficially owned by such
Person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions which would provide such Person with
short-term financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and its
shareholders, but for the actions and possible actions of such Person, would not
be served by taking such action or entering into such transactions or series of
transactions at that time or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse impact (including, but not limited
to, impairment of relationships with customers or impairment of the Company's
<PAGE>
ability to maintain its competitive position) on the business or prospects of
the Company; provided, however, that the Board of Directors of the Company may
not declare a Person to be an Adverse Person if, prior to the time that such
Person acquired twenty-two (22%) percent or more of the shares of Common Stock
then outstanding, such Person provided to the Board of Directors in writing a
statement of such Person's purpose and intentions in connection with the
proposed acquisition of Common Stock, together with any other information
reasonably requested of such Person by the Board of Directors, and the Board of
Directors, based on such statement and reasonable inquiry and investigation,
including such consultation, if any, with such persons as the Directors shall
deem appropriate, determines to notify and notifies such Person in writing that
it will not declare such Person to be an Adverse Person; provided further, that
the Board of Directors may expressly condition in any manner a determination not
to declare a Person an Adverse Person on such conditions as the Board of
Directors may select, including without limitation, such Person's not acquiring
more than a specified amount of stock and/or on such Person's not taking actions
inconsistent with the purposes and intentions disclosed by such Person in the
statement provided to the Board of Directors. No delay or failure by the Board
of Directors to declare a Person to be an Adverse Person shall in any way waive
or otherwise affect the power of the Directors subsequently to declare a Person
to be an Adverse Person. In the event that the Board of Directors should at any
time determine, upon reasonable inquiry and investigations, including
consultation with such persons as the Directors shall deem appropriate, that
such Person has not met or complied with any condition specified by the Board of
Directors, the Directors may at any time thereafter declare such Person to be an
Adverse Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares 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 certificates for
Common Shares outstanding even without such notation or a copy of this Summary
of Rights being attached to such Certificate, will also constitute the transfer
of the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (the "Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 26, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.
The Purchase Price payable and the number of Common Shares or other
securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination, or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights or
warrants to subscribe for or purchase Common shares at a price, or securities
convertible into Common Shares with a conversion price, less than the then
current market price of the Common Shares or (iii) upon the distribution to
holders of the Common Shares of evidences of indebtedness or assets or of
subscription rights or warrants (other than those referred to above).
<PAGE>
In the event that any person or entity becomes an Acquiring Person (the
beneficial owner of twenty-two (22%) percent or more the Common Shares) or an
Adverse Person, provision will be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person or Adverse Person (which
will then be void), will have the right to purchase from the Company upon
exercise that number of Common Shares having a market value of two (2) times the
applicable exercise price of the Right ($25.00).
The Rights Agreement excludes from the definition of Acquiring Persons
who certify to the Company that they inadvertently acquired in excess of
twenty-two (22%) percent of the outstanding Common Shares and thereafter divest
such excess common Share or who acquire twenty-two (22%) percent or more of the
Common Shares in a Permitted Transaction. A "Permitted Transaction" is a stock
acquisition or tender or exchange offer pursuant to a definitive agreement which
would result in a person beneficially owning twenty-two (22%) percent or more of
the Common shares and which has been approved by the Board of Directors
(including a majority of the Continuing Directors) prior to the execution of the
agreement or the public announcement of the offer.
In the event that the Company is acquired in a merger or other business
combination transaction, or fifty (50%) percent or more of its consolidated
assets or earning power are sold, proper provisions will be made so that each
holder of a Right will have the right to purchase from the acquiring company,
upon the exercise of the Right at the then applicable exercise price, that
number of shares of common stock of the acquiring company that at the time of
such transaction will have a market value of two (2) times the applicable
exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one (1%)
percent in such Purchase Price. No fractional Common Shares will be issued and,
in lieu of such fractional shares, an adjustment in cash will be made based on
the market price of the Common Shares on the last trading day prior to the date
of exercise.
After a person becomes an Acquiring Person or an Adverse Person, the
Company's Board of Directors may exchange the Rights, other than those Rights
owned by the Acquiring Person or the Adverse Person, in whole or in part, at an
exchange ratio of two-tenths (2/10ths) of one (1) share of Common Stock per
Right, subject to adjustment. However, the Board of Directors cannot conduct an
exchange at any time after any Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of fifty (50%) percent or more of the
outstanding Common Stock.
<PAGE>
At any time prior to a Distribution Date, a Requisite Majority may
redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). In addition, the Board of Directors may extend or reduce
the period during which the Rights are redeemable, so long as the Rights are
redeemable at the time of such extension or reduction. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The terms of the rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to extend the Final Expiration Date, except that from and after the date any
Person becomes an Acquiring Person or an Adverse Person, no such amendment may
adversely affect the economic interests of the holders of the Rights.
Until a Right is exercised, the holder of the Right, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote, or to receive dividends.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement. A copy of the
Rights Agreement is available free of charge from the Rights Agent. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
<PAGE>
Exhibit "C" to the Rights Agreement
FORM OF ELECTION TO PURCHASE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alternation or enlargement or any change whatsoever.
To: SYNALLOY CORPORATION:
The undersigned hereby irrevocably elects to exercise ____________-
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number: ____________
Please print name and address:
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If such number of Rights are not all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights will
be registered in the name of and delivered to:
Please insert social security or other identifying number: ____________
Please print name and address:
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<PAGE>
FORM OF ELECTION TO PURCHASE (continued)
The undersigned acknowledges that this Election to Purchase is voidable
by the Company if it contains any material misstatement of fact by the
undersigned.
Dated: ______________________ __________________________________
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
1. this Rights Certificate [ ] is [ ] is not being sold, assigned, or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Adverse Person or an Affiliate or Associate of any such 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 Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Adverse
Person or an Affiliate or Associate of such Person.
Dated: ______________________ __________________________________
Signature
Signature Guaranteed:
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Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United State.
