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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
TEXAS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-0832210
(State of incorporation or organization) (I.R.S. Employer Identification No.)
7610 Stemmons Freeway, Suite 200
Dallas, Texas 75247
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A(c)(1), please
check the following box: [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant to
General Instruction A(c)(2), please check the following box: [ ]
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:
Preferred Share Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
N/A
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On October 15, 1996, the Board of Directors of Texas Industries, Inc.
(the "Company") declared a dividend distribution of one preferred share
purchase right (a "Right") for each outstanding share of common stock, $1.00
par value (the "Common Stock"), of the Company. The distribution is payable on
November 15, 1996 to the stockholders of record at the close of business on
November 1, 1996. Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series B Junior Participating
Preferred Stock of the Company ("Series B Preferred Stock") at a price of
$245.00 per one one-thousandth of a share of Series B Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, any majority-owned subsidiary of the Company, any employee
benefit plan of the Company or any such subsidiary, or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common 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 becomes an Acquiring Person) following the commencement or announcement
of an intention to make a tender or exchange offer the consummation of which
would result in any person becoming an Acquiring Person (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of November 1,
1996, by such Common Stock certificates with a copy of a Summary of Rights
attached thereto.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after November 1, 1996 upon transfer or new
issuance of shares of Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Stock, outstanding as of November 1, 1996, even without
such notation or a copy of the Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of Record of shares of Common Stock 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 November 1, 2006 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company as described below.
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The Purchase Price payable, and the number of shares of Series B
Preferred 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 Series B Preferred Stock, (ii) upon the grant to
holders of the shares of Series B Preferred Stock of certain rights or warrants
to subscribe for shares of Series B Preferred Stock or securities convertible
into shares of Series B Preferred Stock at less than the current market price
of the Series B Preferred Stock or (iii) upon the distribution to holders of
shares of Series B Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends thereafter and, if there is an
Acquiring Person, not exceeding 125% of the prior regular periodic cash
dividend, or dividends payable in shares of Series B Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a share of Series B Preferred Stock issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Stock or
a stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Shares of Series B Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Series B Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of Common Stock. In the event of liquidation, the holders
of the shares of Series B Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1000 per share but will be entitled to an
aggregate payment of 1000 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 1000 votes, voting together with the
shares of Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged, each share of
Series B Preferred Stock will be entitled to receive 1000 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Series B Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest in
a share of Series B Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
Subject to certain exchange rights that may be exercised by the Board
of Directors, in the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right (other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void)) will thereafter have the right
(automatically upon exercise thereof) to receive that number of shares of
Common Stock having a market value of two times the Purchase Price. In the
event that the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold to any person other than the Company or one or more of its wholly-owned
subsidiaries after a person or group has become an Acquiring Person, proper
provision will be made so that
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each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction would have a market value of two times the 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 1% in
such Purchase Price. No fractional shares of Series B Preferred Stock (other
than fractions that are integral multiples of one one-thousandth of a share)
will be issued, and in lieu thereof a payment 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 such time as any person or group becomes an
Acquiring Person, the Board of Directors of the Company may redeem the Rights
in whole, but, not in part, at a price of $.001 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after any person or group becomes an Acquiring Person, the
Board of Directors may exchange all or part of the outstanding and exercisable
Rights (other than Rights owned by such person or group which have become void)
for Common Stock (or, if sufficient shares of Common Stock are not available,
for shares of Series B Preferred Stock) at an exchange ratio of one share of
Common Stock (or one one-thousandth share of Series B Preferred Stock) per
Right, as may be adjusted from time to time to reflect any stock split, stock
dividend or similar transaction (the "Exchange Right"). Notwithstanding the
above, the Board of Directors may not exercise the Exchange Right after any
person, together with any associate or affiliate of such person, has become the
beneficial owner of 50% or more of the voting power of the shares of Common
Stock.
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, except that from
and after such time as any person or group becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the Rights.
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.
The Rights 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, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a person or group has
acquired beneficial ownership of 15% or more of the shares of Common Stock.
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The Rights Agreement, dated as of November 1, 1996, between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent,
specifying the terms of the Rights and including as an exhibit thereto the form
of the Certificate of Designations setting forth the terms of the Series B
Preferred Stock, is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its
entirety by reference to such exhibit.
ITEM 2. EXHIBITS
4 Form of Rights Agreement dated as of November 1, 1996 between
Texas Industries, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, which includes the form of
Certificate of Designations setting forth the terms of the
Series B Preferred Stock of Texas Industries, Inc. as Exhibit
A, the form of Right Certificate as Exhibit B, and a Summary
of Rights to Purchase Preferred Stock as Exhibit C.
99 Press Release dated October 15, 1996.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration to be signed on
its behalf by the undersigned, thereto duly authorized.
Texas Industries, Inc.
By:/s/ RICHARD M. FOWLER
------------------------------------
VICE PRESIDENT
Date: October 28, 1996
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Description
-----------
<S> <C>
4 Form of Rights Agreement dated as of November 1, 1996 between Texas Industries, Inc. and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, which includes the form of Certificate of Designations
setting forth the terms of the Series B Preferred Stock of Texas Industries, Inc. as Exhibit A, the
form of Right Certificate as Exhibit B, and a Summary of Rights to Purchase Preferred Stock as Exhibit
C.
99 Press Release dated October 15, 1996.
</TABLE>
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EXHIBIT (4)
TEXAS INDUSTRIES, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF
NOVEMBER 1,1996
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . 6
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . 6
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . 9
Section 5. Countersignature and Registration . . . . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights: Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8. Cancellation and Destruction of Right Certificates . . . 14
Section 9. Reservation and Availability of Shares of Preferred
Stock . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . 16
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . 32
Section 14. Fractional Rights and Fractional Shares . . . . . . . . 37
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . 39
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . 40
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . 41
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . 41
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . 44
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Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . 48
Section 22. Issuance of New Right Certificates . . . . . . . . . . . 50
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . 50
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . 52
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . 55
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . 58
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . 58
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . 58
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . 59
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . 59
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . 59
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . 59
Exhibit A
Certificate of Designations
Exhibit B
Form of Right Certificate
Form of Assignment
Form of Election to Purchase
Exhibit C
Summary of Rights to Purchase Preferred Stock
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RIGHTS AGREEMENT
This Agreement, dated as of November 1, 1996, between TEXAS INDUSTRIES,
INC., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution (the "Distribution") of one preferred share
purchase right (a "Right") for each outstanding share of the Common Stock,
$1.00 par value, of the Company outstanding on November 1, 1996 and has
authorized the issuance of one Right in respect of each share of Common Stock
of the Company issued between November 1, 1996 and the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (as such
terms are hereinafter defined) and under certain other circumstances, each
Right representing the right to purchase one one-thousandth (1/1,000th) of one
share of Series B Junior Participating Preferred Stock of the Company having
the rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
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(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more
of the shares of Common Stock of the Company then outstanding, but
shall not include any employee benefit plan of the Company or of any
subsidiary of the Company, or any entity organized, appointed or
established pursuant to the terms of any such plan, or the Company or
any subsidiary of the Company.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as in effect on October 15, 1996.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person, or any of such Person's
Affiliates or Associates, beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary
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agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or
options, or otherwise, provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially
own," 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; or (B) the right to vote pursuant to any
agreement, arrangement or understanding, provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to "beneficially own," any security under this clause (B) if
the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not then reportable
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than
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customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in clause
(B) of subparagraph (ii) of this paragraph (c)) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding", when used
with reference to a Person's Beneficial Ownership of Securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State
of New York or the State of Texas are authorized or obligated by law
or executive order to close.
(e) "close of business" on any given date shall mean 5:00
p.m., Dallas, Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas
time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the
Company shall mean the Common Stock, $1.00 par value (or as
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such par value may be changed from time to time), of the Company and,
when used with reference to any Person other than the Company, shall
mean the capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(h) "Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(i) "Preferred Stock" shall mean the Series B Junior
Participating Preferred Stock of the Company having the rights and
preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A.
(j) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(l) "Subsidiary" of a Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
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Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement of, or first public announcement of
the intent to commence, by any Person (other than the Company, any wholly-owned
Subsidiary of the Company, or any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding shares of Common Stock for
or pursuant to the terms of any such plan), a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring Person
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights; the earlier of the dates in subsections (i) and
(ii) hereof being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the
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holders thereof (which certificates shall be deemed also to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of the Common Stock. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class, insured, postage-prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit B hereto, evidencing
one Right for each share of the Common Stock so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On November 1, 1996 or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C hereto (the "Summary of
Rights"), by first class, postage-prepaid mail, to each record holder of the
Common Stock as of the close of business on November 1, 1996, at the address of
such holder shown on the records of the Company. With respect to certificates
for the Common Stock outstanding as of November 1, 1996, until the Distribution
Date, the Rights will be evidenced by such certificates for the Common Stock
registered in the names of the holders of the Common Stock together with a copy
of the Summary of Rights attached thereto. Until the Distribution Date (or the
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earlier of the Redemption Date or the Final Expiration Date), the surrender for
transfer of any of the certificates for the Common Stock outstanding on
November 1, 1996, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
(c) Certificates for the Common Stock issued after November 1 ,
1996 but prior to the earliest of the Distribution Date or the Redemption Date
or the Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between TEXAS
INDUSTRIES, INC. and ChaseMellon Shareholder Services, L.L.C., dated
as of November 1, 1996 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of TEXAS INDUSTRIES, INC.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. ChaseMellon Shareholder
Services, L.L.C., will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
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<PAGE> 12
In the event that the Company purchases or acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate 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 automated
quotations system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates, in each case, on their face shall entitle the holders thereof to
purchase such number of shares of the Preferred Stock as shall be set forth
therein at the price per share set forth therein (the "Purchase Price"), but
the number of such shares and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company in the manner provided in the
By-Laws of the Company for Common Stock
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Certificates. The Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, issued and delivered with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal offices, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and
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prior to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to
paragraph (a)(ii) of Section 11 hereof or that have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of shares of the Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in the case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company
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<PAGE> 15
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights: Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the offices of the Rights Agent in
Dallas, Texas, together with payment of the Purchase Price for each one
one-thousandth of one share of the Preferred Stock as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on November
1, 2006 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 ("Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided for in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of one share of
the Preferred Stock pursuant to the exercise of a Right shall initially be
$245.00, shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof, and shall be
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<PAGE> 16
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for shares to be purchased and an amount equal to
any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall
thereupon (i) (A) promptly requisition from any transfer agent of the Preferred
Stock of the Company certificates for the number of shares of the Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, promptly requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, promptly cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be
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<PAGE> 17
designated by such holder, and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
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Section 9. Reservation and Availability of Shares of Preferred Stock.
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Stock or its authorized
and issued Preferred Stock held in its treasury, the number of shares of the
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof.
So long as the Preferred Stock issuable upon the exercise of Rights
may be listed on any national securities exchange or automated quotations
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted for trading on such exchange or automated quotations
system upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of the Preferred Stock delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such (subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of the Preferred Stock upon the exercise of Rights. The Company
shall not, however, be required (a) to pay any transfer tax which may be
payable in
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<PAGE> 19
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Preferred
Stock in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to issue or
deliver any certificates for shares of the Preferred Stock upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for shares of the Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
business day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares
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<PAGE> 20
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares of Preferred Stock
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall
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<PAGE> 21
be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of Preferred Stock issuable upon exercise of one Right. If an
event occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a Right
shall thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a share of Preferred Stock for which
a Right is then exercisable, in accordance with the
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<PAGE> 22
terms of this Agreement and in lieu of shares of Preferred Stock,
such number of shares of Common Stock as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which
a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Company's Common Stock
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event; provided, however, that if the transaction
that would otherwise give rise to the adjustment is also subject to
the provisions of Section 13, then only the provisions of Section 13
shall apply and no adjustment shall be made pursuant to this Section
11 (a)(ii). In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or
any Associate or Affiliate of such Acquiring Person) shall be void and
any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No
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Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued
at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person or any Associate
or Affiliate whose Rights would be void pursuant to the preceding
sentence shall be cancelled.
(iii) In the event that there shall not be sufficient
Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all such action as
may be necessary to authorize additional Common Stock for issuance
upon exercise of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be
issuable upon exercise of a Right, a number of shares of
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<PAGE> 24
Preferred Stock or fractions thereof such that the current per share
market price of one share of Preferred Stock multiplied by such
number or fraction is equal to the current per share market price of
one share of Common Stock as of the date of issuance of such shares of
Preferred stock or fractions thereof.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or equivalent preferred
stock at a price per share of Preferred Stock or equivalent preferred stock (or
having a conversion price per share, if a security convertible into Preferred
Stock or equivalent preferred stock) less than the current per share market
price of the Preferred Stock (as defined in Section 11(d)) on such record date,
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price
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<PAGE> 25
of the total number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of Preferred Stock issuable upon exercise of
one Right. In case such subscription price may be paid in consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Shares of Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
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<PAGE> 26
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of Preferred 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 or assets
(other than (i) a regular periodic cash dividend the record date for which
occurs at a time when there is no Acquiring Person or (ii) a regular periodic
cash dividend, the record date for which occurs at a time when there is an
Acquiring Person, at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or (iii) a dividend payable in Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the current per share
market price of the Preferred Stock (as defined in Section 11(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one share of Preferred Stock and the denominator of
which shall be such current per share market price of the Preferred Stock;
provided, however, that in no event shall the
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<PAGE> 27
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of Preferred Stock issuable upon exercise of
one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price per share" of any security (a "Security") on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current market price per share of
the Security is determined during the period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into shares of such Security, or (B) any
sub-division, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex- dividend date
for such dividend or distribution, or the record date for such
sub-division, combination or reclassification, then, and in each such
case, the current market price per share shall be appropriately
adjusted to take into account ex- dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes
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<PAGE> 28
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 Security
is 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 Security is listed or admitted to trading or, if
the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not quoted by such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for Common Stock
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<PAGE> 29
in clause (i) of this Section 11(d). If the Preferred Stock is not
publicly traded or if the current market price per share of Preferred
Stock cannot be determined in the manner provided above, the
"current market price" per share of Preferred Stock shall be
conclusively deemed to be the current market price per share of Common
Stock (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof),
multiplied by one thousand. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current
market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share (other than Preferred Stock) or one-millionth of
a share of Preferred stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (A) three years from the date of
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<PAGE> 30
the transaction which mandates such adjustment or (B) the date of the expiration
of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than shares of the
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the shares of the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of the Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price per one
one-thousandths of a share of
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<PAGE> 31
Preferred Stock, that number of one one-thousandths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one one-thousandths of a share of Preferred Stock covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a share of the Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-millionth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after the adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment to be made
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,
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<PAGE> 32
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a share of the Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share of Preferred Stock and the number of one
one-thousandths of a share
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<PAGE> 33
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then par value, if
any, of the shares of the Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of such Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of the
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such
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<PAGE> 34
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determined to be advisable in order that any consolidation or
subdivision of the Preferred Stock, issuance wholly for cash of any shares of
the Preferred Stock at less than the current market price, issuance wholly for
cash of any shares of the Preferred Stock or securities which by their terms
are convertible into or exchangeable for Preferred Stock, dividends on the
Preferred Stock payable in Preferred Stock or issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
shareholders.
(n) In the event that at any time after the date of this
Agreement and Prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock)
into a greater or lesser number of shares of Common Stock, then in any such
case (i) the number of one one-thousandths of a share of Preferred Stock
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one- thousandths of a share of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common Shares
outstanding immediately after
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such event, and (ii) each share of Common Stock outstanding immediately after
such event shall have issued with respect to it that number of Rights which
each share of Common Stock outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected. If an event occurs
which would require an adjustment under Section 11(a)(ii) and this Section
11(n), the adjustments provided for in this Section 11(n) shall be in addition
and prior to any adjustment required pursuant to Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock and the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Distribution Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person, (y) any Person shall consolidate with or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of
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<PAGE> 36
such merger and, in connection with such merger, all or part of the Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its subsidiaries shall sell
or otherwise transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly-owned subsidiaries), then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at the then-current Purchase Price multiplied by the number of
one one-thousandths of a share of Preferred Stock for which a right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of validly issued, fully paid,
non-assessable and freely tradable Common Stock of the Principal Party (as
hereinafter defined) (including the Company as successor thereto or as the
surviving corporation), unencumbered and not subject to any liens,
encumbrances, rights of call or first refusal or other adverse claims, as shall
be equal to the result obtained by (A) multiplying the then current Purchase
Price by the then number of one one-thousandths of share of Preferred Stock for
which a Right is then exercisable and dividing that Product by (B) 50% of the
current market price per share of the Common Stock of such Principal Party
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(determined in the manner described in Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such Principal
Party following the occurrence of such consolidation, merger, sale or transfer;
and (iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or
(y) 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 the merger or consolidation; and
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(2) in the case of any transaction described in (z) of
the first sentence in this Section 13(a), the
Person that is the other party to such transaction
or, if more than one, the Person that is the party
receiving the greatest portion of the assets or
earning power transferred pursuant to such
transaction;
provided, however, that in any such case, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Securities Exchange Act of
1934, 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"
shall refer to such other Person; (y) in case such Person is a subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of all of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value of shares held by the public, and (z) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 13 in
the same ratio as
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their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger or sale or transfer of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act") with respect to the
Rights and the securities purchasable upon exercise of the Rights on
an appropriate form, will use its best efforts (A) to cause such
registration statement to become effective as soon as practicable
after such filing, (B) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the date of expiration of the Rights, and (C) to
similarly comply with applicable state securities laws, and use its
best efforts to list (or continue the listing of) the rights and the
securities purchasable upon exercise of the rights on a national
securities exchange; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
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requirements for registration on Form 10 (or any successor form)
under the Securities Exchange Act of 1934, as amended.
The Company shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
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York Stock Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on-any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights, selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair market value of
the Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one- thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between
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the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
shares of Preferred Stock. In lieu of fractional shares that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of a share of the Preferred Stock. For purposes of
this Section 14(b), the current market value of a share of the Preferred Stock
shall be the closing price of a share of the Preferred Stock (as determined
pursuant to the second sentence of Section 11(d)(i) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as above provided).
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his
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own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights
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evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificates made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this
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Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred 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 or
otherwise upon the advice of counsel as set forth in Section 20 hereof. In no
case shall the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the possibility
of such loss or damage.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any
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successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the
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Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 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 Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent
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for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of Rights
(including any Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, 11, 13, 23, or 24 hereof, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any
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representation or warranty as to the authorization or reservation of any shares
of the Preferred Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of the Preferred Stock will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
interested money to the Company or otherwise act as fully and freely as though
it were not
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Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) 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 that the Rights are beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof, the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) The Rights Agent shall have no responsibility to the Company,
any holders of Rights or any holders of shares of Preferred Stock or other
securities for interest or earnings on any monies held by the Rights Agent
pursuant to this Agreement, except as otherwise specifically agreed in a
separate writing by the Company and the Rights Agent.
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(l) The Rights Agent shall not be required to take notice or be
deemed to have notice of any event or condition hereunder, including, but not
limited to, a Distribution Date, a Redemption Date, any adjustment of the
Purchase Price of the Preferred Stock, the existence of an Acquiring Person or
any other event or condition that may require action by the Rights Agent,
unless the Rights Agent shall be specifically notified in writing of such event
or condition by the Company, and all notices or other instruments required by
this Agreement to be delivered to the Rights Agent must, in order to be
effective, be received by the Rights Agent as specified in Section 26 hereof,
and in the absence of such notice so delivered, the Rights Agent may
conclusively assume no such event or condition exists.
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 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail, and to the holders of the Right Certificates by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
the Preferred Stock by registered or certified mail, and to the holders of the
Rights Certificates by first class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor
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to the Rights Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation (or an affiliate of such a corporation) organized and
doing business under the laws of the United States or of the State of Texas or
New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of Texas or New York), in good standing, having a principal office in the State
of Texas or the State of New York, which is authorized under such laws to
exercise corporate trust powers or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further
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assurance, conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company, at its option, may issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to 5:00 P.M., Dallas, Texas time, on the earliest of (x) the Shares
Acquisition Date, (y) the tenth business day (or such later date as may be
determined by action of the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement of, or first public announcement of the intent to
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commence, by any Person (other than the Company, any wholly-owned subsidiary of
the Company, or any employee benefit plan of the Company or any Subsidiary of
the Company or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan) a tender offer or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights), or (z) the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the
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Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the repurchase of Common
Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). 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 such
Subsidiary, or any entity holding shares of Common Stock for
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or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
voting power of the shares of 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 paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. 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 by first class mail 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 which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of 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
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number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) 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 shares of Common Stock
for issuance upon exchange of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be necessary
to authorize such additional shares of Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be issuable
upon exchange of a Right, a number of shares of Preferred Stock or fraction
thereof such that the current per share market price of one share of Preferred
Stock multiplied by such number or fraction is equal to the current per share
market price of one share of Common Stock as of the date of issuance of such
shares of Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares, the Company shall pay to the
registered
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holders of the Right 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 value of a whole share of Common Stock. For purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular periodic cash dividend at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid), or (b) to offer,to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of the Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding Preferred Stock), or (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its subsidiaries to effect any sale or other transfer), in one
or more transactions, of more than 50% of the
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<PAGE> 59
assets or earning power of the Company and its subsidiaries (taken as a whole)
to, any other Person, (e) to effect the liquidation, dissolution or winding up
of the Company, or (f) to declare or pay any dividend on the shares of Common
Stock payable in shares of Common Stock or to the effect a subdivision,
combination or consolidation of the shares of Common Stock (by reclassification
or otherwise than by payment of dividends in shares of Common Stock), then, in
each such case, the Company shall give to each holder of a Right Certificate,
in accordance with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Stock and/or the Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (a)
or (b) above at least ten days prior to the record date for determining holders
of the Preferred Stock for purposes of such action, and in the case of any such
other action, at least ten days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Stock and/or the Preferred Stock, whichever shall be the earlier. In
case the event set forth in Section 11(a)(ii) of this Agreement shall occur,
then, the Company shall as soon as practicable thereafter give to each holder
of a Right, in accordance with Section 26, a notice of the occurrence of
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<PAGE> 60
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii).
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 Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Texas Industries, Inc.
1341 W. Mockingbird Lane
Dallas, Texas 75247-6913
Attention: Robert C. Moore, Vice President --
General Counsel and Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
2323 Bryan Street, Suite 2300
Dallas, Texas 75201
Attention: Barbara J. Robbins
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
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<PAGE> 61
Section 27. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, or (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or
(iii) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be changed or supplemented in any manner which
would adversely affect the interests of the holders of Right Certificates in
any way (other than pursuant to clauses (i) and (ii) above). Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this, Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered
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holders of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: TEXAS INDUSTRIES, INC.
By: /s/ ROBERT C. MOORE By: /s/ RICHARD M. FOWLER
------------------------------ ------------------------------------
Title: Secretary Title: Vice President
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ DAVID M. CARY By: /s/ R. JOHN DAVIS
------------------------------ ------------------------------------
Title: Relationship Manager Title: Vice President
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<PAGE> 64
Exhibit A
CERTIFICATE OF DESIGNATIONS
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
TEXAS INDUSTRIES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Texas Industries, Inc.
2. The following resolution was duly adopted on October 15, 1996
by the Board of Directors of the Corporation pursuant to Section 151 of the
General Corporation Law of the State of Delaware and in accordance with Article
FOURTH of the Corporation's Certificate of Incorporation, as amended:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Corporation's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock of the Corporation and hereby states the designation and number-of
shares, and fixes the relative rights and preferences thereof (in addition to
the provisions set forth in the Certificate of Incorporation which are
applicable to the Preferred Stock of all classes and series) as follows:
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
I. Designation and Amount. The shares of such series
shall be designated as "Series B Junior Participating Preferred Stock" (the
"Series B Preferred Stock") and the number of shares constituting such series
shall be 25,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors, provided, that no decrease shall reduce
the number of shares of Series B Preferred Stock to a number less than that of
the shares then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation convertible
into Series B Preferred Stock.
II. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior
and superior to the shares of Series B Preferred Stock and with
respect to dividends, the holders of shares of
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Series B Preferred Stock, in preference to the holders of Common
Stock, par value $1.00 per share (or as such par value may be changed
from time to time), of the Corporation (the "Common Stock") and of any
other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of
January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provision for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series B Preferred Stock. In the event the Corporation shall
at any time on or after the Distribution Date (as such term is defined
in the Rights Agreement dated as of November 1, 1996 between the
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent) declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the
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<PAGE> 66
Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series B Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series B Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
III. Voting Rights. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time on or after the
Distribution Date declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation, in any other Certificate of Designations creating
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a series of Preferred Stock, or by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as
one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
IV. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section II
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on or make any other
distributions on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred Stock, except dividends paid ratably on the Series
B Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series B Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any shares of
stock ranking on a parity with the Series B Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective
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<PAGE> 68
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section IV, purchase or otherwise acquire such shares at such time and in
such manner.
V. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth herein,
in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
VI. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Preferred Stock
unless, prior thereto, the holders of shares of Series B Preferred Stock-shall
have received $1,000.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series B Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of Common Stock, or (2)
to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
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<PAGE> 69
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
VII. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series B Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VIII. No Redemption. The shares of Series B Preferred Stock shall
not be redeemable.
IX. Rank. The Series B Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to (i) all
other series of the Preferred Stock unless the terms of any such series shall
provide otherwise and (ii) the $5 Cumulative Preferred Stock.
X. Amendment. The Certificate of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series B Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds of the
outstanding shares of Series B Preferred Stock, voting together as a single
series.
3. The Certificate of Incorporation, as amended, of the
Corporation is amended so that the designation and number of shares of the
class and series acted upon in the foregoing resolution, and the relative
rights and preferences of such class and series, are as stated in the
resolution.
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<PAGE> 70
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its __________________________________________
this _____ day of November, 1996.
TEXAS INDUSTRIES, INC.
By:
---------------------------------
Title:
-----------------------------
ATTEST:
By:
--------------------------------
Title:
------------------------------
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<PAGE> 71
Exhibit B
[Form of Right Certificate]
Certificate No. R- Rights
----------------
NOT EXERCISABLE AFTER NOVEMBER 1, 2006 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT, AT THE OPTION OF THE
COMPANY, TO REDEMPTION AT $0.001 PER RIGHT OR TO EXCHANGE, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
TEXAS INDUSTRIES, INC.
This certifies that ___________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of November 1, 1996 (the "Rights Agreement")
between TEXAS INDUSTRIES, INC., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M. Dallas, Texas time on November 1, 2006 at the office of the
Rights Agent, or its successors as Rights Agent, in Dallas, Texas, one
one-thousandth of one fully paid and non-assessable share of the Series B
Junior Participating Preferred Stock (the "Preferred Stock") of the Company, at
a purchase price of $245.00 per one one-thousandth of one share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by
this Right Certificate (and the number of one one-thousandths of a share of
Preferred Stock which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of November 1, 1996, based on the shares of the Preferred Stock of the
Company as constituted at such date.
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<PAGE> 72
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandths of a share of the Preferred Stock which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of the Preferred Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be (i) redeemed by
the Company at its option at a redemption price of $0.001 per Right or (ii) may
be exchanged by the Company in whole or in part for shares of Preferred Stock
or Common Stock, $1.00 par value, of the Company.
No fractional shares of the Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of one share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
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to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______________, 19____.
ATTEST: TEXAS INDUSTRIES, INC.
By:
- ------------------------------ ------------------------------------
Secretary Title:
---------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES,
L.L.C.
By:
---------------------------
Authorized Signature
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<PAGE> 74
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED_____________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within right Certificate on the books of the within-
named Company, with full power of substitution.
Dated:__________________________, ______
------------------------------
Signature
(Signature must conform in
all respects to the name of
holder as written upon the
face of this Right
Certificate, without
alteration or enlargement or
any change whatsoever.)
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<PAGE> 75
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 States.
- --------------------------------------------------------------------------------
(to be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
-----------------------------------
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<PAGE> 76
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to
exercise the Right Certificate.)
TO: TEXAS INDUSTRIES, INC.
The undersigned hereby irrevocably elects to exercise ________________________
Rights represented by this Right Certificate to purchase the shares of the
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
[Please insert social security
or other identifying number] -----------------------------------
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
[Please insert social security
or other identifying number] -----------------------------------
- --------------------------------------------------------------------------------
(Please print name and address)
Dated: ,
-------------------------- ------
----------------------------
Signature
(Signature must conform in
all respects to the name of
holder as written on the face
of this Right Certificate,
without alteration or
enlargement or any change
whatsoever.)
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<PAGE> 77
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 States.
- --------------------------------------------------------------------------------
(to be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
--------------------------------------
Signature
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 15, 1996, the Board of Directors of TEXAS INDUSTRIES, INC.
(the "Company") declared a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of Common Stock, $1.00
par value (the "Common Stock"), of the Company. The distribution is payable on
November 15, 1996 to the shareholders of record on November 1. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of the Company's Series B Junior Participating Preferred Stock (the
"Preferred Stock") at a price of $245.00 per one one-thousandth of a share of
Preferred Stock (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the tenth day following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired beneficial ownership of 15% or more of the
outstanding shares of the Common Stock (the "Shares Acquisition Date") or (ii)
the tenth business day (or such later date as may be determined by action of
the Board of Directors prior to such time as any person or group of affiliated
or associated persons becomes an Acquiring Person) after the commencement of,
or announcement of an intention to commence, a tender offer or exchange offer
the consummation which would result in any person becoming an Acquiring Person
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of November 1, 1996, by such Common Stock certificate with a
copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after November 1, 1996, upon transfer or new issuance of the Common Stock, will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Common Stock certificates outstanding as
of November 1, 1996, even without a copy of this Summary of Rights attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable
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following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Common Stock
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 November 1, 2006, (the "Final Expiration Date") unless
the Final Expiration Date is extended or unless earlier redeemed or exchanged
by the Company, in each case, as described below.
Each share of Preferred Stock purchasable upon exercise of the Rights
will have a minimum preferential quarterly dividend rate of $1.00 per share,
but will be entitled to an aggregate dividend of 1,000 times the dividend
declared on one share of the Common Stock. In the event of liquidation, the
holders of the Preferred Stock will receive a preferential liquidation payment
of $1,000 per share, but will be entitled to receive an aggregate liquidation
payment equal to 1,000 times the payment made on one share of Common Stock.
Each share of Preferred Stock will have 1,000 votes voting together with the
Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount received per
one share of Common Stock. The Rights are protected by customary anti-dilution
provisions. Because of the nature of the Preferred Stock dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
The Purchase Price payable, and the number of shares of the Preferred
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
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for shares of the Preferred Stock or
convertible securities at less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings at a rate not in excess of 125%
of the rate of the last cash dividend theretofore paid or dividends payable in
the Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock
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payable in shares of Common Stock or subdivisions, consolidations or
combinations as of the Common Stock occurring, in any such case, prior to the
Distribution Date.
In the event that the Company is acquired in a merger or other
business combination transaction or that 50% or more of its assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction would have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated person becomes an Acquiring Person, proper provision
will be made so that each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of shares
of the Common Stock having a market value of two times the 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 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which will
have become void) in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth of a Preferred Share per Right (subject to
adjustment).
At any time prior to 5:00 P.M. Dallas, Texas time on the earliest of
(i) the Shares Acquisition Date, (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person) after the commencement of, or announcement of an intention to
commence, a tender offer or exchange offer the consummation of which would
result in any person becoming an Acquiring Person, or (iii) the Final
Expiration Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
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Immediately upon the action of the Board of Directors of the Company
electing to redeem or exchange the Rights, the Company shall make announcement
thereof, and upon such election, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price, or the shares of Common Stock or Preferred Stock exchangeable
for the Rights, as applicable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
October 28, 1996. A copy of the Rights Agreement is available free of charge
from the Rights Agent, ChaseMellon Shareholder Services, L.L.C. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
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<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE
TEXAS INDUSTRIES ADOPTS SHAREHOLDER PROTECTION PLAN
(Dallas, Texas - October 15, 1996) The Board of Directors of Texas Industries,
Inc. (NYSE-TXI) today announced that it has adopted a shareholder protection
plan designed to assure that all TXI shareholders receive fair and equal
treatment in the event of any takeover attempt.
"The rights issued under this plan are intended to enable all TXI shareholders
to realize the long-term value of their investment in the Company," stated
Robert D. Rogers, President. "Although the rights do not prevent a takeover,
they should encourage anyone seeking to acquire TXI to negotiate with the Board
prior to attempting such. The rights also guard against partial tender offers
and other abusive tactics. The Company is not aware of any takeover attempt."
An overview of the plan is attached.
Texas Industries, a Dallas-based company, produces steel, cement, aggregate and
concrete products. The Company is the largest producer of cement in Texas and
a major producer of stone, sand, gravel and expanded shale and clay in Texas,
Louisiana and California. Chaparral Steel Company, an 85%-owned subsidiary of
TXI, manufactures high quality structural and bar products from recycled steel
for distribution throughout North America.
<PAGE> 2
TXI SHAREHOLDER PROTECTION PLAN OVERVIEW
ADOPTED OCTOBER 15, 1996
The Board of Directors of Texas Industries, Inc. has declared a dividend
distribution of one preferred stock purchase right for each outstanding share
of TXI common stock. Each right will entitle shareholders to buy one
one-thousandth of a share of the Company's Series B Junior Participating
Preferred Stock for each share of TXI common stock held, at a price of $245.
The rights will be exercisable only if a person or group of affiliated or
associated persons acquires, or has announced the intent to acquire, 15% or
more of TXI common stock.
The rights will provide for protection against self-dealing transactions by a
control shareholder. In case of acquisition through a merger of other business
combination, the rights will entitle holders to purchase a number of the
acquiring company's common shares having the market value at that time of twice
the rights exercise price. In the event of the acquisition, or the
announcement of the intention to acquire, 15% or more of TXI common stock,
rights holders may, upon exercise, receive TXI common shares having a market
value of two times the exercise price of the rights. Under similar
circumstances, the Board of Directors may exchange each right for one share of
TXI common stock or one one-thousandth of a preferred share.
The rights plan will not prevent tender offers or other takeover attempts.
However, it will enable shareholders to realize the long-term value of the
Company's common stock in the event of a takeover. It is the Company's belief
that the plan will cause anyone contemplating a takeover of TXI to first
discuss its plans with the Board of Directors.
The Company is entitled to redeem the rights in whole, but not in part, at a
price of $.001 per right at any time prior to the acquisition of 15% or more of
TXI common stock.
The dividend distribution will be made on November 15, 1996 to shareholders of
record on November 1, 1996. The rights will be evidenced by, and transferred
with, TXI common stock certificates until the acquisition of, or the
announcement of the intention to acquire, 15% or more of TXI common stock
should occur. If either event were to occur, separate rights certificates
would be mailed to shareholders as soon as practicable.
