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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A/A
(Amendment No. 3)
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
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Michigan 38-1093240
(State of Incorporation or Organization) (I.R.S. Employer Identification Number)
100 East Patterson Street, Tecumseh, Michigan 49286
(Address of Principal Executive Offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g)of the Act:
Class A Stock Purchase Rights
(Title of Class)
Items 1 and 2 of the Form 8-A Registration Statement concerning the
Class A Stock Purchase Rights of the registrant, as heretofore amended, are
hereby further amended to read in their entirety as follows:
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Item 1. Description of Registrant's Securities to Be Registered.
a. Background.
The Board of Directors of Tecumseh Products Company (the "Company")
first adopted a Rights Agreement on January 23, 1991 (the "Rights Agreement").
Pursuant to the Rights Agreement, the Company distributed one stock purchase
right for each share of the Company's common stock outstanding at that time.
Also pursuant to the Rights Agreement, one stock purchase right was distributed
to each share of the Company's common stock issued thereafter.
On April 22, 1992, the Company reclassified its capital stock (the
"Reclassification") by dividing it into two classes: Class A Common Stock, $1.00
par value per share ("Class A Stock"), and Class B Common Stock, $1.00 par value
per share ("Class B Stock", and together with the Class A Stock, the "Common
Stock"). The Company converted each share of common stock outstanding at the
time (the "Former Common Stock") into one share of Class B Stock. On the same
day, the Company's Board of Directors declared a dividend distribution of one
share of Class A Stock for each outstanding share of Class B Stock (the "1992
Stock Dividend"). The 1992 Stock Dividend was payable May 29, 1992 to holders of
record of Class B Stock as of the close of business on May 8, 1992.
Collectively, the Reclassification and the 1992 Stock Dividend are referred to
herein as the "Recapitalization." On May 26, 1993, the Board of Directors
declared a dividend distribution of one share of Class A Stock for each share of
Common Stock (the "1993 Stock Dividend"). The 1993 Stock Dividend was payable
June 30, 1993 to shareholders of record as of the close of business on June 8,
1993.
At the time the 1992 Stock Dividend was declared, the Board of
Directors amended the Rights Agreement in order to clarify the effect of the
Recapitalization on the stock purchase rights that had been distributed under
that Agreement. Pursuant to the amendment, each previously distributed stock
purchase right was converted, as of the effective date of the Reclassification,
into a Class B Right. The amendment also provided for the distribution of one
Class B Right for each share of Class B Stock issued thereafter until the
Distribution Date (described below). At the same time, the Board of Directors
adopted a new plan for the distribution of a Class A Right for each share of
Class A Stock issued after the effectiveness of the Recapitalization (including
Class A Stock issued in the 1992 and 1993 Stock Dividends) until the
Distribution Date.
The agreements setting forth these rights plans were amended on May 26,
1993 in connection with the 1993 Stock Dividend. They were again amended on
August 25, 1999 to, among other things, increase the exercise price under each
Class A Right and Class B Right, to extend the term of each plan, and to reflect
that as of that date the Rights Agent under both plans had changed from NBD
Bank, N.A. to State Street Bank and Trust Company, N.A.
Each Class A Right entitles the registered holder, subject to the terms
of the Class A Rights Agreement, to purchase from the Company one share of Class
A Stock at a purchase price of $180.00 per share, subject to adjustment (such
purchase price, as it may be adjusted, the "Purchase Price"). The Purchase Price
is payable in cash or by certified or bank check or money order payable to the
order of the Company. The description and terms of the Class A Rights are set
forth in the Class A Rights Agreement, as amended, between the Company and State
Street
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Bank and Trust Company, N.A., as successor Class A Rights Agent (the "Class A
Rights Agreement").
b. The Class A Rights Agreement
The Class A Rights currently are attached to all certificates
representing shares of outstanding Class A Stock and until the Distribution Date
will be attached to certificates representing subsequently issued shares of
Class A Stock. Initially, no separate Class A Rights Certificates will be
distributed. Until the Distribution Date, (i) the Class A Rights will be
evidenced by the certificates representing Class A Stock and will be transferred
with and only with such certificates, (ii) Class A Stock certificates issued
after April 22, 1992 will contain a notation incorporating the Class A Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
representing outstanding Class A Stock will also constitute the transfer of the
Class A Rights associated with the Class A Stock represented by such
certificates. The Class A Rights are not exercisable until the Distribution Date
and will expire at the close of business on August 25, 2009, unless earlier
redeemed by the Company as described below.
The Class A Rights will separate from the Class A Stock and the
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement (the date of such announcement being the "Stock
Acquisition Date") that a person or group of affiliated or associated persons
(other than the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or such Subsidiary) (an "Acquiring Person") has acquired,
obtained the right to acquire, or otherwise obtained beneficial ownership of 10%
(or, if such person or group is a "Grandfathered Person," the "Grandfathered
Percentage") or more of the then outstanding shares of Class B Stock, or (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group becomes an Acquiring Person)
following the commencement, without Board approval, of a tender offer or
exchange offer that would result in a person or group beneficially owing 10% or
more of the then outstanding shares of Class B Stock. Any person or group that
beneficially owned 5% or more of the Class B Stock outstanding on April 22, 1992
(a "Grandfathered Person") will not be an Acquiring Person, however, unless the
percentage of outstanding shares of Class B Stock beneficially owned by that
Grandfathered Person subsequently exceeds twice the percentage beneficially
owned on April 22, 1992, plus an additional 1% (the "Grandfathered Percentage").
A public announcement giving rise to the Stock Acquisition Date may be made by
either the Company or an Acquiring Person. However, the Company is not obligated
under any circumstances to make any such announcement, and no announcement by
the Company of any matter or state of facts will give rise to the Stock
Acquisition Date unless the announcement itself expressly so provides.
As soon as practicable after the Distribution Date, Class A Rights
Certificates will be mailed to holders of record of Class A Stock as of the
close of business on the Distribution Date and, thereafter, the separate Class A
Rights Certificates alone will represent the Class A Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of Class A Stock remain outstanding,
(ii) any Person becomes the beneficial owner of 15% (or, if such Person is a
Grandfathered Person, the greater of 15% or the Grandfathered Percentage) or
more of the then outstanding shares of Class B Stock (other than
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pursuant to a transaction described in the next paragraph), (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Class A Rights Agreement, or (iv) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., by means of a reverse stock
split or recapitalization) (other than pursuant to a transaction described in
the next paragraph), then, in each such case, each holder of a Class A Right
will thereafter have the right to receive, upon exercise, Class A Stock (or, in
certain circumstances, shares of Class A Stock and cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Class A Right. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Class A Rights
that are, or (under certain circumstances specified in the Class A Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company merges into any other Person, (ii) any Person merges into the
Company and in connection therewith all or part of the Class A Stock is
converted or exchanged for cash or property, or securities, of any other Person,
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Class A Right (except Class A Rights which
previously have been voided as described above) shall thereafter have the right
to receive, upon exercise, common stock of the Acquiring Person having a value
equal to two times the Purchase Price of the Class A Right.
The Purchase Price payable, and the number of shares of Class A Stock
issuable, upon exercise of the Class A Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a dividend on the Class A
Stock payable in shares of Common Stock or a subdivision, combination or
reclassification of Class A Stock, (ii) if all holders of the Class A Stock are
granted certain rights or warrants to subscribe for Class A Stock or convertible
securities at less than the current market price of the Class A Stock, or (iii)
upon the distribution to the holders of the Class A Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends but including
dividends payable in Company securities other than shares of Common Stock) or of
subscription rights or warrants (other than those referred to above). With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. The Company
is not required to issue fractional shares. In lieu thereof, an adjustment in
cash may be made based on the market price of the Class A Stock prior to the
date of exercise.
At any time until 10 business days following the Stock Acquisition
Date, the Company's Board of Directors may redeem the Class A Rights in whole,
but not in part, at a price of one-fourth of one cent ($.0025) per Class A
Right, subject to adjustment (such price, as it may be adjusted, the "Redemption
Price"), payable, at the election of the Board, in cash or shares of Class A
Stock. Immediately upon action of the Board of Directors ordering the redemption
of the Class A Rights, the Class A Rights will terminate and the only right of
the holders of Class A Rights will be to receive the Redemption Price.
Until a Class A Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Class A
Rights is not taxable to shareholders or to the
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Company, Class A shareholders may, depending upon the circumstances, recognize
taxable income in the event that the Class A Rights become exercisable for
shares of Class A Stock (or other consideration).
Any of the provisions of the Class A Rights Agreement may be amended at
any time prior to the Distribution Date. After the Distribution Date, the
provisions of the Class A Rights Agreement may be amended in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Class A Rights Certificates (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Class A Rights Agreement; provided, however, that no amendment may be
made to lengthen the time period governing redemption at such time as the Class
A Rights are not redeemable or to lengthen any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of and/or the benefits to the holders of Class A Rights.
The Class A Rights and the similar Class B Rights (collectively, the
"Rights") may have certain anti-takeover effects. The Rights will 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 unless the offer is
conditioned on a substantial number of Rights being acquired. However, the
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because the Rights may be redeemed by the
Company at $.0025 per Right at any time on or prior to the tenth business day
following the Stock Acquisition Date. Thus, the Rights are intended to encourage
persons who may seek to acquire control of the Company to initiate such an
acquisition through negotiations with the Board of Directors. However, the
effect of the Rights may be to discourage a third party from making a partial
tender offer or otherwise attempting to obtain a substantial equity position in
the equity securities of, or seeking to obtain control of, the Company. To the
extent any potential acquirors are deterred by the Rights, the Rights may have
the effect of preserving incumbent management in office.
The Class A Rights Agreement between the Company and the Class A Rights
Agent, dated as of April 22, 1992, specifying the terms of the Class A Rights,
which includes as Exhibit A the Form of Class A Rights Certificate; the First
Amendment to Class A Rights Agreement, dated August 30, 1992, which, among other
things includes an amendment to the Form of Class A Rights Certificate; the
Second Amendment to Class A Rights Agreement, dated as of May 26, 1993; and the
Third Amendment to Class A Rights Agreement, dated as of August 25, 1999, are
filed with this Form 8-A Registration Statement as Exhibits 4, 4.1, 4.2, and
4.3, respectively. Each of these Exhibits is incorporated herein by reference.
The foregoing description of the Class A Rights does not purport to be complete
and is qualified in its entirety by reference to said Exhibits.
Item 2. Exhibits.
The following exhibits are filed as part of this Form 8-A/A
Registration Statement:
4 Class A Rights Agreement, dated as of April 22, 1992,
between Tecumseh Products Company and NBD Bank, N.A.,
as Class A
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Rights Agent. (Filed with Form 8-A Registration
Statement, dated April 22, 1992, concerning
registrant's Class A Stock Purchase Rights).
4.1 First Amendment to Class A Rights Agreement, dated
August 30, 1992, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 1 on Form 8, dated October 2,
1992, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.2 Second Amendment to Class A Rights Agreement, dated
as of May 26, 1993, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 2 on Form 8-A/A, dated June 22,
1993, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.3 Third Amendment to Class A Rights Agreement, dated as
of August 25, 1999, between Tecumseh Products Company
and State Street Bank and Trust Company, N.A., as
successor Class A Rights Agent.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this Form 8-A/A (Amendment No. 3) to
the Form 8-A Registration Statement concerning registrant's Class A Stock
Purchase Rights to be signed on its behalf by the undersigned, thereunto duly
authorized.
TECUMSEH PRODUCTS COMPANY
Date: August 26, 1999 By: /s/ John H. Foss
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John H. Foss
Its Vice President, Treasurer
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
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4 Class A Rights Agreement, dated as of April 22, 1992,
between Tecumseh Products Company and NBD Bank, N.A.,
as Class A Rights Agent. (Filed with Form 8-A
Registration Statement, dated April 22, 1992,
concerning registrant's Class A Stock Purchase
Rights).
4.1 First Amendment to Class A Rights Agreement, dated
August 30, 1992, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 1 on Form 8, dated October 2,
1992, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.2 Second Amendment to Class A Rights Agreement, dated
as of May 26, 1993, between Tecumseh Products Company
and NBD Bank, N.A., as Class A Rights Agent. (Filed
with Amendment No. 2 on Form 8-A/A, dated June 22,
1993, to the Form 8-A Registration Statement
concerning registrant's Class A Stock Purchase
Rights).
4.3 Third Amendment to Class A Rights Agreement, dated as
of August 25, 1999, between Tecumseh Products Company
and State Street Bank and Trust Company, N.A., as
successor Class A Rights Agent.
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EXHIBIT 4.3
THIRD AMENDMENT TO
CLASS A RIGHTS AGREEMENT
THIS THIRD AMENDMENT to the Class A Rights Agreement dated April 22,
1992, as amended (as so amended, the "Existing Class A Agreement"), is dated as
of August 25, 1999 and is between TECUMSEH PRODUCTS COMPANY, a Michigan
corporation (the "Company"), and STATE STREET BANK AND TRUST COMPANY, N.A., as
Class A Rights Agent (the "Agent").
WHEREAS, pursuant to Section 7(a) of the Existing Class A Agreement, on
January 23, 2001, holders of Class A Rights Certificates will no longer be
permitted to exercise the Class A Rights evidenced thereby; and
WHEREAS, pursuant to Section 7(b) of the Existing Class A Agreement,
the purchase price for each share of Class A Stock upon exercise of Class A
Rights is $160.00, subject to adjustment from time to time pursuant to Sections
11 and 13(a) of the Existing Class A Agreement; and
WHEREAS, as adjusted for events occurring prior to the date hereof, the
current purchase price of each share of Class A Stock upon exercise of Class A
Rights is $80.00; and
WHEREAS, the Company has appointed State Street Bank and Trust Company,
N.A. to succeed NBD Bank, N.A. as Class A Rights Agent under the Existing Class
A Agreement, with such appointment to be effective as of the date of this Third
Amendment, and State Street Bank and Trust Company, N.A. has accepted such
appointment; and
WHEREAS, the Board of Directors of the Company desires to amend the
Existing Class A Agreement to, among other things, (a) extend to August 25, 2009
the date upon which holders of Class A Rights Certificates can exercise the
Class A Rights evidenced thereby, (b) to increase the purchase price of each
share of Class A Stock upon exercise of Class A Rights to $180.00 (taking into
account all adjustments to such purchase price occurring prior to the date
hereof), and (c) to reflect that State Street Bank and Trust Company, N.A. has
become successor Class A Rights Agent under the Existing Class A Agreement; and
WHEREAS, the Board of Directors of the Company has authorized and
approved the amendments to the Existing Class A Agreement hereafter set forth in
this Third Amendment and has directed the execution hereof, and a compliance
certificate concerning this Third Amendment has been delivered to the Agent;
NOW, THEREFORE, in consideration of the foregoing and pursuant to
Section 26 of the Existing Class A Agreement, the parties hereby agree as
follows:
1. All references in the Existing Class A Agreement to the Class A
Rights Agent shall refer to State Street Bank and Trust Company, N.A., as Class
A Rights Agent.
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2. The cover page of the Existing Class A Agreement is hereby amended
by replacing the words "NBD BANK, N.A." with "STATE STREET BANK AND TRUST
COMPANY, N.A."
3. The first paragraph of the Existing Class A Agreement is hereby
amended by replacing the words "NBD BANK, N.A., a National Association" with
"STATE STREET BANK AND TRUST COMPANY, N.A., a Massachusetts Trust Company."
4. The definition of "Business Day" in Section 1 of the Existing Class
A Agreement is hereby amended in its entirety to read as follows: "'Business
Day' shall mean 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."
5. The definition of "Close of Business" in Section 1 of the Existing
Class A Agreement is hereby amended in its entirety to read as follows: "'Close
of Business' on any given date shall mean 5:00 P.M., Eastern time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00
P.M., Eastern time, on the next succeeding Business Day."
6. The second sentence of Section 2 of the Existing Class A Agreement
is hereby amended in its entirety to read as follows: "With the consent of the
Class A Rights Agent, the Company may from time to time appoint such Co-Class A
Rights Agents as it may deem necessary or desirable, upon ten (10) days' prior
written notice to the Class A Rights Agent. The Class A Rights Agent shall have
no duty to supervise, and shall in no event be liable for, the acts or omissions
of any such Co-Class A Rights Agent."
7. Section 7(a) of the Existing Class A Agreement is hereby amended by
replacing the date "January 23, 2001" with the date "August 25, 2009."
8. Section 7(b) of the Existing Class A Agreement is hereby amended by
replacing the reference to "$160.00" with "$180.00."
9. Section 11(a)(i) of the Existing Class A Agreement is hereby
amended by replacing the words "In the event the Company shall at any time after
the date of this Class A Rights Agreement" with the following words: "In the
event the Company shall at any time after August 25, 1999."
10. Each of Section 11(p)(A) and Section 11(p)(B) of the Existing Class
A Agreement is hereby amended by replacing the date "April 22, 1992" with the
date "August 25, 1999."
11. The second sentence of Section 18(a) of the Existing Class A
Agreement is hereby amended by inserting the word "gross" immediately before the
word "negligence" in such sentence.
12. Section 20(c) of the Existing Class A Agreement is hereby amended
by inserting the word "gross" immediately before the word "negligence" in such
Section.
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13. The address of the Class A Rights Agent in Section 25 of the
Existing Class A Rights Agreement is hereby replaced with the following:
"State Street Bank and Trust Company, N.A.
c/o Equiserve Limited Partnership
150 Royal Street
Canton, MA 02021
Attn: Client Administrator"
14. Exhibit B to the Existing Class A Agreement (Summary of Rights to
Purchase Class A Stock) is hereby amended to read in its entirety as set forth
in Annex A to this Third Amendment.
15. Except as specifically amended herein, the Existing Class A
Agreement shall remain in full force and effect as existing prior to the date
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed, all as of the date first above written.
ATTEST: TECUMSEH PRODUCTS COMPANY
By: By: /s/ Todd W. Herrick
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Name: Name: Todd W. Herrick
Title: Title: President and Chief
Executive Officer
ATTEST: STATE STREET BANK AND TRUST
COMPANY, N.A.
By: By: /s/ Charles V. Rossi
------------------------- ----------------------------------------
Name: Name: Charles V. Rossi
Title: Title: President
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ANNEX A
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
CLASS A STOCK
Pursuant to a Class A Rights Agreement entered into in 1992, Tecumseh
Products Company (the "Company") distributed one Class A Right for each share of
Class A Stock issued by the Company. Each Class A Right entitles the registered
holder, subject to the terms of the Class A Rights Agreement, to purchase from
the Company one share of Class A Stock at a specified purchase price.
Effective August 25, 1999, the Company and State Street Bank and Trust
Company, N.A., as successor Class A Rights Agent, amended the Class A Rights
Agreement to, among other things, (a) increase the initial exercise price of
each Class A Right from $80.00 to $180.00, (b) extend the expiration date of the
Class A Rights from January 23, 2001 to August 25, 2009, and (c) to reflect that
State Street Bank and Trust Company, N.A. has become successor Class A Rights
Agent. This summary does not purport to be complete and is qualified in its
entirety by reference to all the provisions of the Class A Rights Agreement,
including its definition of certain terms. The Class A Rights Agreement is
incorporated in this summary by reference. A copy of the Class A Rights
Agreement and all amendments to that Agreement have been filed with the
Securities and Exchange Commission and are available free of charge from the
Company.
Each Class A Right entitles the registered holder, subject to the terms
of the Class A Rights Agreement, to purchase from the Company one share of Class
A Stock at a purchase price of $180.00 per share, subject to adjustment (the
"Purchase Price"). The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company.
The Class A Rights currently are attached to all certificates
representing shares of outstanding Class A Stock. Class A Rights will also be
attached to all certificates representing shares of Class A Stock issued in the
future until the Distribution Date. Initially, no separate Class A Rights
Certificates will be distributed. Until the Distribution Date, the Class A
Rights will be evidenced by the certificates representing Class A Stock and will
be transferred with and only with those certificates. The Class A Rights are not
exercisable until the Distribution Date and will expire at the close of business
on August 25, 2009, unless earlier redeemed by the Company as described below.
The Class A Rights will separate from the Class A Stock on the
Distribution Date. The Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement (the "Stock Acquisition Date")
that a person or group of persons (an "Acquiring Person") has acquired 10% (or,
if such person or group is a "Grandfathered Person," the "Grandfathered
Percentage") or more of the then outstanding shares of Class B Stock, or (ii) 10
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business days (or a later date determined by the Board of Directors) following
the commencement, without Board approval, of a tender or exchange offer that
would result in a person or group owning 10% or more of the then outstanding
shares of Class B Stock. Any person or group that owned 5% or more of the Class
B Stock outstanding on April 22, 1992 (a "Grandfathered Person") will not be an
Acquiring Person unless the percentage of outstanding shares of Class B Stock
owned by that Grandfathered Person subsequently exceeds twice the percentage
owned on April 22, 1992, plus an additional 1% (the "Grandfathered Percentage").
An announcement by the Company will only give rise to the Stock Acquisition Date
if the Company expressly states in the announcement that it will do so.
After the Distribution Date, Class A Rights Certificates will be mailed
to holders of record of Class A Stock on the Distribution Date. From that point
on, the separate Class A Rights Certificates alone will represent the Class A
Rights.
If (i) the Company survives a merger with an Acquiring Person and
shares of Class A Stock remain outstanding, or (ii) any person becomes the owner
of 15% (or, if such person is a Grandfathered Person, the greater of 15% or the
Grandfathered Percentage) or more of the outstanding shares of Class B Stock
(other than pursuant to a transaction described in the next paragraph), or (iii)
an Acquiring Person engages in one or more "self-dealing" transactions as set
forth in the Class A Rights Agreement, or (iv) an event occurs which results in
an Acquiring Person's ownership interest being increased by more than 1% (other
than pursuant to a transaction described in the next paragraph), then, in each
such case, each Class A Right will thereafter represent the right to receive,
upon exercise, shares of Class A Stock (or, in certain circumstances, shares of
Class A Stock and cash, property or other securities of the Company) having a
value equal to two times the Purchase Price of the Class A Right. However, all
Class A Rights that are owned by any Acquiring Person will be null and void.
If, at any time following the Stock Acquisition Date, (i) the Company
merges into any other person, (ii) any person merges into the Company and in
connection with the merger all or part of the Class A Stock is converted or
exchanged for cash or property, or securities of any other person, or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Class A Right (except Class A Rights which previously have been
voided as described above) will have the right to receive, upon exercise, common
stock of the Acquiring Person having a value equal to two times the Purchase
Price of the Class A Right.
The Purchase Price payable, and the number of shares of Class A Stock
issuable, upon exercise of the Class A Rights are subject to adjustment from
time to time to prevent dilution. Those circumstances are set forth in detail in
the Class A Rights Agreement With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. The Company is not required to issue fractional
shares. Instead, it may make a cash adjustment based on the market price of the
Class A Stock prior to the date of exercise.
For 10 business days following the Stock Acquisition Date, the
Company's Board of Directors may redeem all the Class A Rights at a price of
one-fourth of one cent ($.0025) per Class A Right, subject to adjustment (the
"Redemption Price"). The Redemption Price is payable, at the election of the
Board, in cash or shares of Class A Stock. Immediately upon
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action of the Board of Directors ordering the redemption of the Class A Rights,
the Class A Rights will terminate and the holders of Class A Rights will only
have a right to receive the Redemption Price.
Until a Class A Right is exercised, the holder of the Right will have
no rights as a shareholder of the Company with respect to that Right (but they
will have rights as a shareholder with respect to the Class A Common Stock that
the Class A Right is attached to). The distribution of the Class A Rights is not
taxable to shareholders or to the Company. However, Class A shareholders may,
depending on the circumstances, recognize taxable income if the Class A Rights
become exercisable.
Any of the provisions of the Class A Rights Agreement may be amended at
any time prior to the Distribution Date. After the Distribution Date, the Class
A Rights Agreement may be amended to cure an ambiguity, defect or inconsistency,
to make changes that do not adversely affect the interests of holders of Class A
Rights Certificates (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period. However, no amendment may be made to
lengthen the time period governing redemption when the Class A Rights are not
redeemable or to lengthen any other time period unless it is for the purpose of
protecting, enhancing or clarifying the rights of and/or the benefits to the
holders of Class A Rights.
