SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
BARNES GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 06-0247840
(State of Incorporation or Organization) (IRS Employer
Identification No.)
123 Main St., Bristol, Connecticut 06011-0409
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
Preferred Stock Purchase New York Stock Exchange
Rights
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On December 10, 1996, the Board of Directors of
Barnes Group Inc. (the "Company") adopted a Shareholder
Rights Plan, providing that one Right shall be attached to
each share of Common Stock of the Company. The Rights will
be issued on December 23, 1996 and will entitle the
registered holder to purchase from the Company a unit
consisting of one one-hundredth of a share (a "Unit") of
Series A Junior Participating Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), at a purchase price
of $200 per Unit (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.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. Any shares issued by the Company following the
Record Date will bear a legend indicating that the Rights
are attached to such Common Stock certificates. Shares
issued and owned by stockholders prior to the Record Date
will be deemed to have Rights attached. Stockholders should
not surrender such certificates for legending. The Rights
will separate from the Common Stock and a Distribution Date
will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 35%
or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 10 business days (or such
later date as may be determined by the Board of Directors)
following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially
owning 35% or more of such outstanding shares of Common
Stock (the earlier of (i) and (ii) the "Distribution Date").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates will
contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the
Distribution Date and will expire at the close of business
on December 23, 2006, unless earlier redeemed or extended by
the Company.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will
be issued with Rights.
In the event that any person becomes the
beneficial owner of 35% or more of the then outstanding
shares of Common Stock, each holder of a Right will
thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company), having a value equal to two
times the Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of any of the events set
forth in this paragraph (the "Flip-in Events"), all Rights
that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not
exercisable following the occurrence of any of the Flip-in
Events set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
In the event that following the Stock Acquisition
Date, (i) the Company engages in a merger or business
combination transaction in which the Company is not the
surviving corporation; (ii) the Company engages in a merger
or business combination transaction in which the Company is
the surviving corporation and the Common Stock of the
Company is changed or exchanged; or (iii) 50% or more of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the
right to receive, upon exercise, of the Right, Common Stock
of the acquiring company having a value equal to two times
the Purchase Price.
The Purchase Price payable, and the number of
Units of 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) if holders
of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible
securities at less than the 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 quarterly cash dividends) or of
subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional
Units will be issued 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.
Generally, at any time until ten days following
the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the $.01 redemption price. The foregoing
notwithstanding, the Rights generally may not be redeemed
for one hundred eighty (180) days following a change in a
majority of the Board as a result of a proxy contest or
consent solicitation.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment shall be
made at such time as the Rights are not redeemable.
As of December 19, 1996, there were 6,660,027
shares of Common Stock of the Company outstanding and
685,896 shares of Common Stock of the Company in the
treasury. As of December 19, 1996, options to purchase
362,497 shares of Common Stock were outstanding. Each share
of Common Stock of the Company outstanding at the close of
business on December 23, 1996, will receive one Right. So
long as the Rights are attached to the Common Stock, one
additional Right (as such number may be adjusted pursuant to
the provisions of the Rights Agreement) shall be deemed to
be delivered for each share of Common Stock issued or
transferred by the Company in the future. In addition,
following the Distribution Date and prior to the expiration
or redemption of the Rights, the Company may issue Rights
when it issues Common Stock only if the Board deems it to be
necessary or appropriate, or in connection with the issuance
of shares of Common Stock pursuant to the exercise of stock
options or under employee plans or upon the exercise,
conversion or exchange of certain securities of the Company.
65,000 shares of Preferred Stock are initially reserved for
issuance upon exercise of the Rights.
The Rights may have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company in a manner which
causes the Rights to become discount Rights unless the offer
is conditional on a substantial number of Rights being
acquired. The Rights, however, should not affect any
prospective offeror willing to make an offer at a fair price
and otherwise in the best interests of the Company and its
shareholders as determined by a majority of the Directors
who are not affiliated with the person making the offer, or
willing to negotiate with the Board. The Rights should not
interfere with any merger or other business combination
approved by the Board since the Board may, at its option, at
any time until ten days following the Stock Acquisition Date
redeem all but not less than all the then outstanding Rights
at the Redemption Price.
The Rights Agreement, dated as of December 10,
1996, between the Company and ChaseMellon Shareholder
Services L.L.C., as Rights Agent, specifying the terms of
the Rights 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. A Certificate of Designation, Preferences and
Rights setting forth the terms of the Preferred Stock was
filed with the Secretary of State of the State of Delaware
on July 24, 1986.
ITEM 2. EXHIBITS.
1 Rights Agreement, dated as of December 10, 1996,
between Barnes Group Inc. and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the form of Rights Certificate as
Exhibit A and the Summary of Rights to Purchase
Preferred Stock as Exhibit B. Pursuant to the
Rights Agreement, printed Rights Certificates will
not be mailed until after the Distribution Date
(as such term is defined in the Rights Agreement).
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the Registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: December 20, 1996 Barnes Group Inc.
By: /s/ Mary Louise Beardsley
___________________________
Mary Louise Beardsley
Associate General Counsel
and Secretary
EXHIBIT INDEX
Exhibit Description Page
1 Rights Agreement, dated as of December 10, 1996,
between Barnes Group Inc. and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the form of Rights Certificate as
Exhibit A and the Summary of Rights to Purchase
Preferred Stock as Exhibit B. Pursuant to the
Rights Agreement, printed Rights Certificates will
not be mailed until after the Distribution Date
(as such term is defined in the Rights Agreement).
____________________________________________________
BARNES GROUP INC.
and
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
Rights Agent
Rights Agreement
Dated as of December 10, 1996
____________________________________________________
Table of Contents
Section Page
Section 1. Certain Definitions . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . 4
Section 3. Issue of Rights Certificates . . . . . . 5
Section 4. Form of Rights Certificates . . . . . . . 7
Section 5. Countersignature and Registration . . . . 8
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . 10
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . 12
Section 9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . 13
Section 10. Preferred Stock Record Date . . . . . . 14
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . 15
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares . . . . . . . . . . 26
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . . 26
Section 14. Fractional Rights and Fractional Shares 29
Section 15. Rights of Action . . . . . . . . . . . . 31
Section 16. Agreement of Rights Holders . . . . . . 31
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . 32
Section 18. Concerning the Rights Agent . . . . . . 33
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . 33
Section 20. Duties of Rights Agent . . . . . . . . . 34
Section 21. Change of Rights Agent . . . . . . . . . 36
Section 22. Issuance of New Rights Certificates . . 37
Section 23. Redemption and Termination . . . . . . . 38
Section 24. Notice of Certain Events . . . . . . . . 39
Section 25. Notices . . . . . . . . . . . . . . . . 40
Section 26. Supplements and Amendments . . . . . . . 41
Section 27. Successors . . . . . . . . . . . . . . . 41
Section 28. Determinations and Actions by the Board
of Directors, etc. . . . . . . . . . . . 42
Section 29. Benefits of this Agreement . . . . . . . 42
Section 30. Severability . . . . . . . . . . . . . . 42
Section 31. Governing Law . . . . . . . . . . . . . 43
Section 32. Counterparts . . . . . . . . . . . . . . 43
Section 33. Descriptive Headings . . . . . . . . . . 43
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 10, 1996
(the "Agreement"), between Barnes Group Inc., a Delaware
corporation (the "Company"), and ChaseMellon Shareholder
Services L.L.C. (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on December 10, 1996 (the "Rights
Dividend Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend distribution of
one Right for each share of common stock, par value $1.00
per share, of the Company (the "Common Stock") outstanding
at the close of business on December 23, 1996 (the "Record
Date"), and has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) for each share of
Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's
treasury) and the Distribution Date each Right initially
representing the right to purchase on one-hundredth of a
share of Series A Junior Participating Preferred Stock
(the "Preferred Stock") of the Company having the rights,
powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights filed
with the Secretary of State of the State of Delaware on
July 24, 1986, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises
and the mutual agreements herein set forth, the parties
hereby agree as follows:
Section 1. Certain Definitions. For purposes
of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any
Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner
of 35% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company or (iii) any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any such plan.
(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 and in effect
on the date of this Agreement (the "Exchange Act").
(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, directly or
indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant
to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to
any Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this
subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not
also then reportable by such Person 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 (or any
Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (c))
or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (c)
shall cause a person engaged in business as an
underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good
faith in a firm commitment underwriting until the
expiration of forty days after the date of such
acquisition; and provided further, however, that
nothing in this paragraph (c) shall cause a person to
be the "Beneficial Owner" of, or to "beneficially
own," any securities held by any employee benefit
plan of the Company or any trust created pursuant
thereto solely as a result of such person being (A) a
member of a committee which is authorized to make
decisions on behalf of any such plan or with respect
to securities held pursuant thereto or (B) a trustee
of any trust created pursuant thereto.
(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 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., New York City time, on such date;
provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common
stock, par value $1.00 per share, of the Company, except
that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity
securities or other equity interest having power to
control or direct the management, of such Person.
(g) "Person" shall mean any individual,
firm, corporation, partnership or other entity.
(h) "Preferred Stock" shall mean shares of
Series A Junior Participating Preferred Stock, par value
$1.00 per share, of the Company, and, to the extent that
there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit
the full exercise of the Rights, any other series of
Preferred Stock, par value $1.00 per share, of the Company
designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating
Preferred Stock.
(i) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii) hereof.
(j) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(k) "Principal Party" shall have the
meaning set forth in Section 13(b) hereof.
(l) "Stock Acquisition Date" shall mean
the first date of public announcement (which, for purposes
of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(m) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at least a
majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(n) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time
appoint such Co-Rights Agents s it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth day after the Stock Acquisition Date
(or, if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the
tenth business day (or such later date as the Board shall
determine) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act,
if upon consummation thereof, such Person would be the
Beneficial Owner of 35% or more of the shares of Common
Stock then outstanding (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and
not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the
Distribution Date, the Rights Agent will 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, one or more rights
certificates, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights
Certificates.
(b) The Company will make available a copy
of a Summary of Rights, in substantially the form attached
hereto as Exhibit B (the "Summary of Rights") to each
holder of the Common Stock requesting such a copy. With
respect to certificates for the Common Stock outstanding
as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution
Date or the Expiration Date (as such term is defined in
Section 7 hereof), the transfer of any certificates
representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer
of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the
following legend (or the legend required under the Rights
Agreement, dated as of July 16, 1986 (the "1986
Agreement"):
This certificate also evidences and
entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between Barnes
Group Inc. (the "Company") and the Rights Agent
thereunder (the "Rights Agreement"), the terms
of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal offices of the Company. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date
of mailing, without charge promptly after
receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such
Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or
(ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any
of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by
such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms
of election to purchase and of assignment to be printed on
the reverse thereof) shall each be substantially in the
form set forth in Exhibit A hereto and may have such marks
of identification or designation and such legends,
summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, 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 on which the Rights may
from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein
(such exercise price per one one-hundredth of a share, the
"Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant
to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and
any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent feasible) the
following legend (or the legend required under the 1986
Agreement):
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights
Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, its Chairman of the Executive Committee of the
Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned
by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and
issued and delivered by the Company with the same force
and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the
Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate, shall be
a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced on
its face by each of the Rights Certificates and the date
of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section
4(b), Section 7(e) and Section 14 hereof, at any time
after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-
hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the
registered holder shall have completed and signed the
certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall,
subject to Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided
herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part
at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase
Price with respect to the total number of one one-
hundredths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as
to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the close of business on
December 23, 2006 (the "Final Expiration Date"), or (ii)
the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-
hundredth of a share of Preferred Stock pursuant to the
exercise of a Right shall initially be $200, and shall be
subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied
by payment, with respect to each Right so exercised, of
the Purchase Price per one one-hundredth of a share of
Preferred Stock (or other securities, cash or other
assets, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax,
the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is
the transfer agent for such shares) certificates for the
total number of one one-hundredths of a share of Preferred
Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-
hundredths 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 will direct the depositary agent to comply
with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder,
and (iv) after receipt thereof, deliver such cash, if any,
to or upon the order of the registered holder of such
Rights Certificate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other
property are available for distribution by the Rights
Agent, if and when appropriate. The Company reserves the
right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or
upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights
pursuant to a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights, shall
become null and void without any further action and no
holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and
signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it,
and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of
this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of
Capital Stock.
(a) The Company covenants and agrees that
it will cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock the
number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized
and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held
in its treasury) that, as provided in this Agreement
including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed
on any national securities exchange, 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 on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts
to (i) file, as soon as practicable following the earliest
date after the first occurrence of a Section 11(a)(ii)
Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration
statement under the Securities Act of 1933 (the "Act"),
with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and
(B) the date of the expiration of the Rights. The Company
will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90)
days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer
in effect. In addition, if the Company shall determine
that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a
registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to ensure
that all one one-hundredths of a share of Preferred Stock
(and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable.
(e) The Company further covenants and
agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number
of one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or
delivery of a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is
a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be
exercisable, including, without limitation, the 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 and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(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 shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a
smaller number of shares, 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) and Section 7(e) hereof, the
Purchase Price in effect at the time of the
record date for such dividend or of the
effective date of such subdivision, combination
or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as
the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of
any Right exercised after such time shall be
entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or
capital stock, as the case may be, 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.
If an event occurs which would require an
adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that any Person
(other than the Company, any Subsidiary of the
Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or
established by the Company for or pursuant to
the terms of any such plan), alone or together
with its Affiliates and Associates, shall, at
any time after the Rights Dividend Declaration
Date, become the Beneficial Owner of 35% or more
of the shares of Common Stock then outstanding,
unless the event causing the 35% threshold to be
crossed is a transaction set forth in Section
13(a) hereof, then, promptly following the
occurrence of any such event, proper provision
shall be made so that each holder of a Right
(except as provided below and in Section 7(e)
hereof) shall thereafter have the right to
receive, upon exercise thereof at the then
current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of
one one-hundredths of a share of Preferred
Stock, such number of shares of Common Stock of
the Company as shall equal the result obtained
by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths
of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such
first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of
the current market price (determined pursuant to
Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In the event that the number of
shares of Common Stock which are authorized by
the Company's Restated Certificate of
Incorporation but not outstanding or reserved
for issuance for purposes other than upon
exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the
"Current Value"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right
and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of
the Company (including, without limitation,
shares, or units of shares, of preferred stock,
such as the Preferred Stock, which the Board has
deemed to have essentially the same value or
economic rights as shares of Common Stock (such
shares of preferred stock being referred to as
"Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an
aggregate value equal to the Current Value (less
the amount of any reduction in the Purchase
Price), where such aggregate value has been
determined by the Board based upon the advice of
a nationally recognized investment banking firm
selected by the Board; provided, however, that
if the Company shall not have made adequate
provision to deliver value pursuant to clause
(B) above within thirty (30) days following the
later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall
be obligated to deliver, upon the surrender for
exercise of a Right and without requiring
payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. For
purposes of the preceding sentence, the term
"Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If
the Board determines in good faith that it is
likely that sufficient additional shares of
Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended
to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek
shareholder approval for the authorization of
such additional shares (such thirty (30) day
period, as it may be extended, is herein called
the "Substitution Period"). To the extent that
action is to be taken pursuant to the first
and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights,
and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution
Period in order to seek such shareholder
approval for such authorization of additional
shares and/or to decide the appropriate form of
distribution to be made pursuant to such first
sentence and to determine the value thereof. In
the event of any such suspension, the Company
shall issue a public announcement stating that
the exercisability of the Rights has been
temporarily suspended, as well as a public
announcement at such time as the suspension is
no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment
Share shall be the Current Market Price per
share of the Common Stock on the Section
11(a)(ii) Trigger Date and the per share or per
unit value of any Common Stock Equivalent shall
be deemed to equal the Current Market Price per
share of the Common Stock on such date.
(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 to subscribe
for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock
(or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price
per share of Preferred Stock or per share of 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 Market
Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock 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 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). In case such subscription
price may be paid by (delivery of consideration part or
all of which may be in a form other than cash, the value
of such consideration 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 and shall be binding on the Rights Agent
and the holders of the Rights. 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.
(c) In case the Company shall fix a record
date for 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, cash
(other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), 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
Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock 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 cash, assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current
Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any
computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is
determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth
above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock
are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a
professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of Directors
of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national
securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock
is not publicly held or not so listed or traded, Current
Market Price per share shall mean the fair value per share
as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Preferred
Stock shall be determined in the same manner as set forth
above for the Common Stock of the Company in clause (i) of
this Section 11(d) (other than the last sentence thereof).
If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if
the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section
11(d), the Current Market Price per share of Preferred
Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock of
the Company. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Preferred Stock
shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the Current Market
Price of one one-hundredth of a share of Preferred Stock
shall be equal to the Current Market Price of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in 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 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 (i)
three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a) hereof, the
holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from
time-to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to 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-
hundredths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one one-hundredths of a
share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust the
number of Rights, in lieu of any adjustment in the number
of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-
hundredths 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-ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than
the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on
such record date Rights Certificates evidencing, subject
to Section 14 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 Rights Certificates held by such
holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights 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-
hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express
the Purchase Price per one one-hundredths of a share and
the number of one one-hundredths of a share which were
expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then stated value, if any, of the number of one one-
hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of
one one-hundredths of a share of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11
shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right
exercised after such record date the number of one one-
hundredths of a share of Preferred Stock (or other
securities of the Company, if any) issuable upon such
exercise over and above the number of one one-hundredths
of a share of 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 (fractional or otherwise)
or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11,
as and to the extent that in their good faith judgment the
Board of Directors of the Company shall determine to be
advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any shares of Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section
11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that
it shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of
or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the
Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that,
after the Distribution Date, it will not, except as
permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result obtained
by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a
fraction the numerator which shall be the total number of
shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is made
as provided in Section 11 and Section 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
Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or
part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of
any other Person 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 transaction or a series of related 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 Person or Persons
(other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case except
as may be contemplated by Section 13(d) hereof, proper
provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredth of a share of
Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths of a share for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first
occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by (2) 50% of the Current
Market Price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13
Event, 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 only to such Principal Party
following the first occurrence of a Section 13 Event; (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 connection with the
consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction
described in clause (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 such merger or
consolidation; and
(ii) in the case of any transaction
described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the
Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been
so registered, "Principal Party" shall refer to such other
Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the
Common Stocks of two or more 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.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party
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 of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will:
(i) prepare and file a registration
statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A)
become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at
all times meeting the requirements of the Act) until
the Expiration Date; 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 requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything herein to the
contrary, if any Person shall merge with and into the
Company without any change in any shares of Common Stock,
but under circumstances in which if shares of common Stock
were changed or exchanged in whole or in part then the
provisions of this Section 13 would apply, then for
purposes of this Section 13 the Common Stock shall be
deemed changed, the provisions of this Section 13 shall be
deemed to apply and the Company shall be deemed to be the
Principal Party after such merger.
Section 14. Fractional Rights and Fractional
Shares.
(a) The Company shall not be required to
issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of
a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right 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 of the Rights
for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such
market maker is making a market in the Rights the fair
value of the Rights on such date as determined in good
faith by the Board of Directors, of the Company shall be
used.
(b) The Company shall not be required to
issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-
hundredth 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-hundredth of a
share of Preferred Stock). In lieu of fractional shares
of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the
current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing
price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a
Triggering Event, the Company shall not be required to
issue or deliver fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market
value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share
of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date
of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives such holder's
right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his or her own behalf and for his
or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such
holder's right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the
obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights 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 Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent), subject to the last sentence of Section
7(e) hereof, for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of
one one-hundredths of a share of 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
Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders
(except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) 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 disbursements and other disbursements incurred in
the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability in the premises. In no case shall the Rights
Agent be liable for special, indirect, incidental or
consequential loss of any kind whatsoever, even if the
Rights Agent has been advised of the likelihood of such
loss.
(b) 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
Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change
of Name of Rights Agent.
(a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any
further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible
for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in
its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by
this Agreement (and only such duties and obligations) upon
the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel 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 (including,
without limitation, the identity of any Acquiring Person
and the determination of Current Market Price) 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 the Chairman of the
Board, the Chairman of the Executive Committee of the
Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable
hereunder 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 Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights 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 Rights
Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced
by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock
or Preferred Stock to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any shares of
Common Stock or Preferred Stock will, when so 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 the Chairman of
the Board, the Chairman of the Executive Committee of the
Board, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties,
and it 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.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the
Company or for any other 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,
however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds
or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Right
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon
thirty (30) days' notice in writing mailed to the Company,
and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to
the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of
the Common Stock and 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
to the Rights Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the
holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be either (i) a
corporation organized and doing business under the laws of
the United States or of the States of New York or
Connecticut (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 States of New York or
Connecticut), in good standing, having a principal office
in the States of New York or Connecticut, which is
authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by
federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (ii) an affiliate of
such corporation. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the
Common Stock and the 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 Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under
the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company,
and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company,
issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would
create a significant risk of material adverse tax
consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of
(i) the close of business on the tenth day following the
Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the close of
business on the tenth day following the Record Date), or
(ii) the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be 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"). Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price", as defined in
Section 11(d)(i) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the
Board of Directors of the Company ordering the redemption
of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock.
Any notice which is mailed in the manner herein provided
shall be deemed given, 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.
(c) Notwithstanding the provisions of
Section 23(a) hereof, in the event that a majority of the
Board is elected by stockholder action by written consent,
or is comprised of persons elected at a meeting of
stockholders who were not nominated by the Board in office
immediately prior to such meeting, then for a period of
one hundred and eighty (180) days following the
effectiveness of such election, the Rights shall not be
redeemed if such redemption is reasonably likely to have
the purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence
of a Triggering Event or a transaction with an Acquiring
Person.
Section 24. Notice of Certain Events. In case
the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to
make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect
any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect
any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or to effect
any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in
one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give
to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 25 hereof, 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 shares of 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 (i) or (ii) above at
least twenty (20) days prior to the record date for
determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of
participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights 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:
Barnes Group Inc.
123 Main Street
Bristol, Connecticut 06010
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Rights Certificate to
or on the Rights Agent 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.
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior
to the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any
holders of certificates representing shares of Common
Stock. From and after the Distribution Date, the Company
and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided,
from and after the Distribution Date, this Agreement may
not be supplemented or amended to lengthen any time period
hereunder pursuant to clause (iii) of this sentence unless
such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights. 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 26, the
Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Notwithstanding
anything contained in this Agreement to the contrary, this
Agreement may not be amended at a time when the Rights are
not redeemable.
Section 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
Section 28. Determinations and Actions by the
Board of Directors, etc. For all purposes of this
Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of
such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted
to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this
Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement,
and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement
(including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations
(including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or
made by the Board of Directors in good faith, shall (x)
be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.
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 Rights Certificates (and,
prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable
and the Board of Directors of the Company determines in
its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth day
following the date of such determination by the Board of
Directors.
Section 31. Governing Law. This Agreement,
each Right and each Rights 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 made and to be
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.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: BARNES GROUP INC.
By /s/ Mary Louise Beardsley By /s/Theodore E. Martin
Name: Mary Louise Beardsley Name: Theodore E. Martin
Title: Associate General Title: President and
Counsel and Secre- Chief Executive
tary Officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES L.L.C.
By /s/ Lynore LeConche By /s/ Joan B. Hayes
Name: Lynore LeConche Name: Joan B. Hayes
Title: Assistant Vice Title: Assistant Vice
President President
Exhibit A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER DECEMBER 23, 2006 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.](1)
Rights Certificate
BARNES GROUP 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 December 10, 1996 (the
"Rights Agreement"), between Barnes Group Inc., a Delaware
corporation (the "Company"), and ChaseMellon Shareholder
Services L.L.C. (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 PM (New York City time) on
December 23, 2006 at the office or offices of the Rights
Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth of a fully share of Series A
Junior Participating Preferred Stock (the "Preferred Stock")
of the Company, at a purchase price of $200 per one one-
hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate
duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares 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 December 23, 1996, based on the
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
______________
1 The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event
(as such term is defined in the Rights Agreement), if the
Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Preferred Stock
or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as
such term is defined in the Rights Agreement).
This Rights 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 Rights
Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at
the principal office of the Company and are also available
upon written request to the Company.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal office
or offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate may be redeemed by
the Company at its option at a redemption price of $.01 per
Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. The foregoing notwithstanding, the Rights
generally may not be redeemed for one hundred eighty (180)
days following a change in a majority of the Board as a
result of a proxy contest.
No fractional shares of 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-hundredth of a 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 Rights Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or any other
securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights 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:
By
Secretary Title:
Countersigned:
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _____________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ___________, 19__
Signature
Medallion Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person
who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________, 19__
Signature
Medallion Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: BARNES GROUP INC.
The undersigned hereby irrevocably elects to
exercise ________________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may
be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of
and delivered to:
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 Rights Certificate, a new Rights
Certificate for the balance 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: ___________, 19__
Signature
Medallion Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person
who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________, 19__
Signature
Medallion Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 10, 1996, the Board of Directors of
Barnes Group Inc. (the "Company") adopted a Shareholder
Rights Plan, providing that one Right shall be attached to
each share of Common Stock of the Company. The Rights will
be issued on December 23, 1996 and will entitle the
registered holder to purchase from the Company a unit
consisting of one one-hundredth of a share (a "Unit") of
Series A Junior Participating Preferred Stock, par value
$1.00 per share (the "Preferred Stock") at a purchase price
of $200 per Unit (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.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. Any shares issued by the Company following the
Record Date will bear a legend indicating that the Rights
are attached to such Common Stock certificates. Shares
issued and owned by stockholders prior to the Record Date
will be deemed to have Rights attached. Stockholders should
not surrender such certificates for legending. The Rights
will separate from the Common Stock and a Distribution Date
will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 35%
or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 10 business days (or such
later date as may be determined by the Board of Directors)
following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially
owning 35% or more of such outstanding shares of Common
Stock (the earlier of (i) and (ii) the "Distribution Date").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates will
contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the
Distribution Date and will expire at the close of business
on December 23, 2006, unless earlier redeemed or extended by
the Company.
As soon as practicable after the Distribution
Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will
be issued with Rights.
In the event that any person becomes the
beneficial owner of 35% or more of the then outstanding
shares of Common Stock, each holder of a Right will
thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company), having a value equal to two
times the Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of any of the events set
forth in this paragraph (the "Flip-in Events"), all Rights
that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not
exercisable following the occurrence of any of the Flip-in
Events set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
In the event that following the Stock Acquisition
Date, (i) the Company engages in a merger or business
combination transaction in which the Company is not the
surviving corporation; (ii) the Company engages in a merger
or business combination transaction in which the Company is
the surviving corporation and the Common Stock of the
Company is changed or exchanged; or (iii) 50% or more of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the
right to receive, upon exercise, of the Right, Common Stock
of the acquiring company having a value equal to two times
the Purchase Price.
The Purchase Price payable, and the number of
Units of 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) if holders
of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible
securities at less than the 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 quarterly cash dividends) or of
subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional
Units will be issued 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.
Generally, at any time until ten days following
the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the $.01 redemption price. The foregoing
notwithstanding, the Rights generally may not be redeemed
for one hundred eighty (180) days following a change in a
majority of the Board as a result of a proxy contest or
consent solicitation.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment shall be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement is being filed with
the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to
the Rights Agreement, which is incorporated herein by
reference.
