EXHIBIT 4(e)
LINCOLN NATIONAL CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
Rights Agreement
Dated as of November 7, 1986
TABLE OF CONTENTS
Page
Section 1. Certain Definitions .............. 1
Section 2. Appointment of Rights Agent ...... 6
Section 3. Issue of Right Certificates ...... 6
Section 4. Form of Right Certificates ....... 9
Section 5. Countersignature and Registration 10
Section 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates ...... 11
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights ...... 13
Section 8. Cancellation and Destruction of
Right Certificates ............. 15
Section 9. Reservation and Availability of
Common Shares .................. 16
Section 10. Common Shares Record Date ........ 17
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights ..... 18
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares ............ 34
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning power ..... 34
Section 14. Fractional Rights and Fractional
Shares ......................... 36
Section 15. Rights of Action ................. 38
Section 16. Agreement of Right Holders ....... 39
Section 17. Right Certificate Holder Not
Deemed a Shareholder ........... 40
-i-
Page
Section 18. Concerning the Rights Agent ...... 41
Section 19. Merger or Consolidation or Change
of Name of Rights Agent ........ 42
Section 20. Duties of Rights Agent ........... 43
Section 21. Change of Rights Agent ........... 48
Section 22. Issuance of New Right Certificates 50
Section 23. Redemption ....................... 50
Section 24. Notice of Certain Events ......... 52
Section 25. Notices .......................... 53
Section 26. Supplements and Amendments ....... 55
Section 27. Successors ....................... 55
Section 28. Benefits of this Agreement ....... 55
Section 29. Severability ..................... 56
Section 30. Governing Law .................... 56
Section 31. Counterparts ..................... 56
Section 32. Descriptive Headings ............. 57
Signatures .................................. 57
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
-ii-
RIGHTS AGREEMENT
Agreement, dated as of November 7, 1986, between Lincoln
National Corporation, an Indiana corporation (the "Company"),
and The First National Bank of Boston, a national banking
association (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one common share purchase right (a
"Right") for each Common Share (as hereinafter defined) of
the Company outstanding as of the close of business on
November 21, 1986, each Right representing the right to
purchase one share of Common Stock, par value $1.25, upon the
terms and subject to the conditions herein set forth, and has
further authorized the issuance of one Right with respect to
each Common Share that shall become outstanding between
November 21, 1986 and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares then outstanding, but
shall not include the Company, any wholly-owned Subsidiary
(as such term is hereinafter defined) of the Company or any
employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding Common Shares 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 (the "Exchange Act"), as in
effect on November 6, 1986.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly
or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or
understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person
in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the
Company.
(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 5:00P.M., New York City time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of Common Stock, par value
$1.25 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(j) "Redemption Date" shall have the meaning set forth
in Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(l) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the
voting power of the voting equity securities or equity
interest is owner, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and
the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the
holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth day after the date of the commencement
of, or first public announcement of the intent of any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares for or
pursuant to the terms of any such Plan) to commence, a tender
or exchange offer the consummation of which would result in
beneficial ownership by a Person of 30% or more of the
outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates 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 Common Shares registered
in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates (as hereinafter
defined)) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only
in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit A
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. For the purpose of this Agreement, any
beneficial holder of Common Shares identified by the Company
in a notice addressed to the Rights Agent as having properly
elected to receive dividends directly pursuant to a duly
adopted recognition procedure of the Company, as authorized
in IND. CODE Sect. 23-1-30-4(a) (Cum. Supp. 1986) or any statute
of similar effect, shall be deemed to be a "record holder".
As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) As soon as practicable after November 21, 1986, the
Company will send a copy of a "Summary of Rights to Purchase
Common Stock", in substantially the form of Exhibit B hereto
(the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close
of business on November 21, 1986, at the address of such
holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the close of
business on November 21, 1986, until the Distribution Date
the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with a copy of
the Summary of Rights. Until the Distribution Date (or the
earlier of the Redemption Date or Final Expiration Date), the
surrender for transfer of any certificate for Common Shares
outstanding as of the close of business on November 21, 1986,
with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates issued for Common Shares (including,
without limitation, certificates issued upon transfer or
exchange of Common Shares and certificates for reacquired
Common Shares referred to in the last sentence of this
paragraph (c)) after November 21, 1986 but prior to the
earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Lincoln National
Corporation and The First National Bank of
Boston, dated as of November 7, 1986 (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal executive
offices of Lincoln National Corporation. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. Lincoln National
Corporation will mail to the holder of this
certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons (as
defined in the Rights Agreement) may become null
and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after November 21, 1986 but
prior to the Distribution Date, any Rights associated with
such Common Shares shall he deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Common
Shares, certificate and assignment to be printed on the
reverse thereof) shall be substantially the same as 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 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at
the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by
its Chief Executive Officer or a vice president of any class
and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal
or a facsimile thereof. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be
valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of the
execution of this Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or another
office designated for such purpose, books for registration
and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right
Certificates, the certificate number and the date of each of
the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. Subject to the provisions of Section 14
hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration
Date (as such terms are defined in Section 7 hereof), any
Right Certificate or Right Certificates may be transferred,
split-up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares as the Right
Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split-up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right
Certificates to te transferred, split-up, combined or
exchanged, with the form of assignment duly executed, at the
principal office of the Rights Agent or at its office or
agency in New York, New York. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed
and signed the certificate following the form of assignment
on the reverse side of such Right 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 or the Rights Agent shall
reasonably request. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split-up,
combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's
request, 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 Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office of the Rights Agent, or
at its office or agency in New York, New York, together with
payment of the Purchase Price for each Common Share as to
which the Rights are exercised, at or prior to the close of
business on the earlier of (i) the close of business on
November 21, 1996 (the "Final Expiration Date"), or (ii) the
time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date").
(b) The Purchase Price for each Common Share pursuant to
the exercise of a Right shall initially be $150.00, shall be
subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America in accordance with paragraph
(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
certificate duly executed, accompanied by payment of the
Purchase Price for the Common Shares to be purchased and an
amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance
with Section 9 hereof in cash, or by certified check or
cashier's check payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) either (A)
requisition from any transfer agent of the Common Shares
certificates for the number of Common Shares to he purchased
and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) requisition
from the depositary agent depositary receipts representing
such number of Common Shares as are to be purchased (in which
case certificates for the Common Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in
accordance with Section 14, (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 Right Certificate, registered in such name or names as
may be designated by such holder, and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the Order
of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split-up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Shares.
The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and
unissued Common Shares or any Common Shares held in its
treasury the number of Common Shares that will be sufficient
to permit the exercise in full of all outstanding Rights.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Common Shares (subject
to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
Common Shares 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 Right
Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Common Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or
depositary receipts for Common Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Common Shares Record Date. Each person in
whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date
upon which the Common Shares transfer books of the Company
are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the Common
Shares transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a
Right Certificate, as such, shall not be entitled to any
rights of a holder of Common Shares for which the Rights
shall be exercisable, including, without limitation, the
right to vote, or to receive dividends or other
distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number of Common
Shares or Number of Rights. The Purchase Price, the number of
Common 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
Common Shares payable in Common Shares, (B) subdivide the
outstanding Common Shares, (C) combine the outstanding Common
Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the
Common Shares (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Common Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination
or reclassification. If an event occurs which would require
an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
A. Any Acquiring Person or any Associate or
Affiliate of any Acquiring person, at any time after
the date of this Agreement, directly or indirectly,
(1) shall merge into the Company or otherwise combine
with the Company and the Company shall be the
continuing or surviving corporation of such merger or
combination and the Common Shares of the Company shall
remain outstanding and not be changed into or
exchanged for stock or other securities of any other
Person or the Company or cash or any other property,
(2) shall, in one or more transactions, other than the
exercise of Rights or in connection with the exercise
or conversion of securities exchangeable or
convertible into capital stock of the Company or any
of its Subsidiaries, transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole or
in part) for shares of any class of capital stock
of the Company or any of its Subsidiaries or for
securities exercisable for or convertible into shares
of any class of capital stock of the Company or any of
its Subsidiaries or otherwise obtain from the Company
or any of its Subsidiaries, with or without
consideration, any additional shares of any class of
capital stock of the Company or any of its Subsidiaries
or securities exercisable for or convertible into
shares of any class of capital stock of the Company or
any of its Subsidiaries (other than as part of a pro
rata distribution to all holders of such shares of any
class of capital stock of the Company or any of its
Subsidiaries), (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from, with
or of, as the case may be, the Company or any of its
Subsidiaries, assets (including securities) on terms
and conditions less favorable to the Company than the
Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, (4) shall
receive any compensation from the Company or any of
its Subsidiaries other than compensation at rates
in accordance with the Company's (or its Subsidiaries')
past practices, or (5) shall receive the benefit,
directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company
or any of its Subsidiaries; or
B. During such time as there is an Acquiring
Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions involving the Company or any Subsidiaries
of the Company (whether or not with or into or
otherwise involving an Acquiring Person) which has the
effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding
shares of any class of equity securities or of
securities exercisable for or convertible into
securities of the Company or any of its Subsidiaries
which is directly or indirectly owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring
Person.
then, and in each such case, proper provision shall be made so
that each holder of a Right, except as provided below, shall
thereafter have a right to receive, upon exercise thereof in
accordance with the terms of this Agreement, such number of
Common Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of
Common Shares for which a Right is then exercisable and
dividing that product by (y) 50% of the current per share
market price of the Common Shares (determined pursuant to
Section 11(d)) on the fifth day after the earlier of the date
of the occurrence or the date of the first public
announcement of any one of the events listed above in this
Section 11(a)(ii); provided, however, that if the transaction
that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, upon the occurrence of any of
the events listed above in this Section 11(a)(ii), any Rights
that are or were on or after the earlier of the Distribution
Date or Shares Acquisition Date beneficially owned by an
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall become void and any holder of such
Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. The Company shall not
enter into any transaction of the kind listed in this Section
11(a)(ii) if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or
any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
otherwise substantially diminish the benefits intended to be
afforded by the Rights. Any Right Certificate issued
pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any
time upon the transfer of any Rights to an Acquiring Person
or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6, 7(d) or 22 hereof
or this Section 11 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this
sentence, shall contain the following legend:
The Rights represented by this Right Certificate
were issued to a Person who was an Acquiring
Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement). This Right Certificate and
the Rights represented hereby may become void
in the circumstances specified in Section
11(a)(ii) of the Rights Agreement;
provided that the Rights Agent shall not be under any
responsibility to ascertain the existence of facts that would
require the imposition of such legend but shall be required
to impose such legend only if instructed to do so by the
Company or if a holder fails to certify upon transfer or
exchange in the certificate on the reverse side of the Right
Certificate that such holder is not an Acquiring Person or an
Affiliate or Associate thereof.
(iii) In the event that there shall not be sufficient
treasury or authorized but unissued Common Shares to permit
the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance
upon exercise of the Rights.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Common Shares or securities convertible into Common
Shares at a price per Common Share (or having a conversion
price per share, if a security convertible into Common
Shares) less than the then current per share market price of
the Common Shares (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common
Shares which the aggregate offering price of the total number
of Common Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to
be offered) would purchase at such current per share market
price and the denominator of which shall be the number of
Common Shares outstanding on such record date plus the number
of additional Common Shares 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 in a consideration part or all of which
shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent.
Common Shares 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 the
making of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Common Shares) or
subscription rights or warrants (excluding those referred to
in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then
current per share market price of the Common Shares (as
defined in Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrant
applicable to one Common Share and the denominator of which
shall be such current per share market price of the Common
Shares. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any
date shall be deemed to be the average of the daily closing
prices per share of such Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the
event that the current per share market price of the
Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (A) a
dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common
Shares, or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per
Common Share equivalent. 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 Common Shares are not
then 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 Common Shares are listed or admitted to trading or, if
the Common Shares 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
Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the Common Shares 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 Shares selected by the Board of
Directors of the Company. The term "Trading Day" shall mean
a day on which the principal national securities exchange on
which the Common Shares are listed or admitted to trading is
open for the transaction of business or, if the Common Shares
are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Shares
are not publicly held or so listed or traded, "current per
share market price" shall earn the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination shall he described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided. however, that
any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a Common Share or other share as the
case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment otherwise required by this
Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock
of the Company other than Common Shares, thereafter the number
of such other shares so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in
Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 hereof with respect to the Common
Shares 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 Common Shares 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
Section 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 Common Shares (calculated to the
nearest one ten-thousandth of a share) obtained by (i)
multiplying (x) the number of Common Shares covered by a
Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
Common Shares purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Common
Shares for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such
adjustment of the number of Rights 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 Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Common Shares issuable upon
the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase
Price and the number of Common Shares which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if
any, of the Common Shares 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 Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to
the ho1der of any Right exercised after such record date of
the Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment:
provided, however, that the Company shall deliver to such holder
due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of
the Common Shares, issuance wholly for cash of any of the
Common Shares at less than the current market price, issuance
wholly for cash or Common Shares or securities which by their
terms are convertible into or exchangeable for Common Shares,
dividends on Common Shares payable in Common Shares or
issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company
to holders of its Common Shares shall not be taxable to such
shareholders.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided
in Sections 11 and 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent
for the Common Shares a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right 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 and shall not be deemed to bear
knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or
indirectly, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c)
the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person
other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the
terms of this Agreement, such number of Common Shares of such
other Person (including the Company as successor thereto or
as the surviving corporation) as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price
by the number of Common Shares for which a Right is then
exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (y) 50% of the current per share
market price of the Common Shares of such other Person
(determined pursuant to Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with
such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent
a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
otherwise substantially diminish the benefits intended to be
afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations
or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New 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
Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In
lieu of fractional Common Shares, the Company shall pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(h), the
current market value of a Common Share shall be the closing
price of a Common Share (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights
or any fractional Common Shares upon exercise of a Right
(except as provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares): and any registered
holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office of
the Rights Agent, or at its office or agency in New York,
New York, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the
Company not the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Common Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or
certificate for the Common Shares 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
reasonably believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. 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 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 Right Certificates shall have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force and effect provided in
the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the
full force and effect provided in the Right Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chief Executive Officer,
a vice president of any class, the Treasurer or the Secretary
of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent
for any action taken 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 to the
Company and any other Person only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of
any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including any
rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the
manner. method or amount thereof) provided for in Section 3,
11, 13 or 23, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be
issued pursuant to this Agreement or any Right Certificate or
as to whether any Common Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its
duties hereunder from any one of the Chief Executive Officer,
a vice president of any class, the Secretary or the Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the
Rights Agent with respect to its duties or obligations under
this Rights Agreement and the date on and/or after which such
action shall be taken or omitted and the Rights Agent shall
not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after
the date specified therein (which date shall not be less than
five business days after the date any such officer actually
receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to
taking or omitting any such action, the Rights Agent has
received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend 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 duly appointed
attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to
the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of
the Common Shares by registered or certified mail, and to the
holders of the Right Certificates (and prior to the
Distribution Date, the Common Shares) by first-class mail.
The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Shares by registered
or certified mail, and to the holders of the Right
Certificates (and prior to the Distribution Date, the Common
Shares) 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 30 days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (and
prior to the Distribution Date, a Common Share) (who shall,
with such notice, submit his Right Certificate for inspection
by the Company), then the registered holder of any Right
Certificate (and prior to the Distribution Date, any Common
Share) may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the
laws of the United States or of the State of New York or
Indiana (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 Commonwealth of Massachusetts or in the
State of New York of Indiana), in good standing, having an
office in the Commonwealth of Massachusetts or in the State
of New York or Indiana, 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 either
(A) has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million, or (B)
is a member of a bank holding company system, which bank
holding company system has an aggregate combined capital and
surplus of at least $50 million, provided that such
corporation's separate capital and surplus shall at all times
be at least $10 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further 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 Shares,
and mail a notice thereof in writing to the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares). Failure to give any
notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to such time as
any Person becomes an Acquiring Person redeem all but not
less than all the then outstanding Rights at a redemption
price of $.01 per Right, adjusted proportionately to reflect
any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, 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. Within 10 days after the action of the
Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer
agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, and
other than in connection with the purchase of Common Shares
prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company
shall propose (a) to pay any dividend payable in stock of any
class to the holders of its Common Shares or to make any
other distribution to the holders of its Common Shares (other
than a regular quarterly cash dividend) or (b) to offer to
the holders of its Common Shares rights or warrants to
subscribe for or to purchase any additional Common Shares or
shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of its
Common Shares, or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (e)
to effect the liquidation, dissolution or winding up of the
Company, or (f) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall
give to each holder of a Right Certificate (and, prior to the
Distribution Date, the Common Shares), 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, or distribution of rights or Warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the Common Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record
date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by
the holders of the Common Shares, whichever shall be the
earlier.
In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or prior to the Distribution
Date, a Common Share), in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate (or prior to the Distribution
Date, a Common Share) 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:
Lincoln National Corporation
1300 South Clinton Street
P.O. Box 1110
Fort Wayne, Indiana 46801
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate (or
prior to the Distribution Date, a Common Share) to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The First National Bank of Boston
50 Morrissey Boulevard
Dorchester, Massachusetts 02125
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate (or prior to the Distribution Date, a
Common Share) 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. The Company and
the Rights Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Right
Certificates (or prior to the Distribution Date, Common
Shares) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or
to make any other provisions in regard to matters or
questions arising hereunder, which the Company and the Rights
Agent may deem necessary or desirable, including but not
limited to extending the Final Expiration Date and, provided
that at the time of such amendment there is no Acquiring
Person, extending the period of time during which the Rights
may be redeemed, and which shall not adversely affect the
interests of the holders of Right Certificates.
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. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date,
the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
Section 29. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
Section 30. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Indiana and for all
purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be
made and performed entirely within such State.
Section 31. 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 32. 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.
LINCOLN NATIONAL CORPORATION
Attest:
By By
Title: Ian M. Rolland, President
and Chief Executive Officer
THE FIRST NATIONAL BANK OF BOSTON
Attest:
By By
Title:
Exhibit A
[Form of Right Certificate]
Certificate No. R Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 1996 OR EARLIER IF NOTICE
OF REDEMPTION IS GIVEN. 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. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.]*
Right Certificate
LINCOLN NATIONAL CORPORATION
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights
Agreement dated as of November 7, 1986 (the "Rights
Agreement") between Lincoln National Corporation, an Indiana
corporation (the "Company"), and The First National Bank of
Boston (or any successor Rights Agent under the Rights
Agreement, hereinafter referred to as the "Rights Agent"), to
purchase from the Company at any time after the Distribution
Date (as such term
*The portion of the legend in brackets shall be inserted
only if applicable.
is defined in the Rights Agreement) and prior to 5:00 P.M. (New
York City time) on November 21, 1996, at the principal office
of the Rights Agent, or at its office or agency in New York,
New York, one fully paid, non-assessable share of the Common
Stock (the "Common Stock") of the Company, at a purchase price
of $150.00 per share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of
Election to Purchase and certificate duly executed. The number
of Rights evidenced by this Right Certificate (and the number
of shares of Common Stock which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set
forth above, ate the number and Purchase Price as of November
21, 1986, based on the shares of Common Stock outstanding as of
the close of business on such date.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Common Stock which may be purchased
upon the exercise of the Rights evidenced by this Right
Certificate ate subject to modification and adjustment upon
the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof, and to which
Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, or at its office or agency in New York, New
York, with the form of assignment and certificate duly
executed, may to exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the
holder of shares of Common Stock or of any other securities
of the Company which may at any time be issuable on the
exercise hereof, not shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to 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 Right Certificate
shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of ,
19 .
ATTEST: LINCOLN NATIONAL CORPORATION
By
Secretary Title:
Countersigned:
THE FIRST NATIONAL BANK OF
BOSTON
By
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the
within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: , 19
Signature
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms ate 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 became an Acquiring Person or an Affiliate or
Associate thereof.
Dated: , 19
Signature
Signature Guaranteed:
NOTICE
The signatures on the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To LINCOLN NATIONAL CORPORATION:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate
to purchase the shares of Common Stock issuable upon the
exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19
Signature
(Signature must conform in
all respects to name of holder
as specified on the face of
this Right Certificate)
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 thereof
(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 thereof.
Dated: , 19
Signature
Signature Guaranteed:
2941X
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 6, 1986, the Board of Directors of Lincoln
National Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of
common stock, pat value $1.25 per share (the "Common Stock"),
of the Company. The distribution is payable on November 21,
1986 to the shareholders of record on November 21, 1986.
Each Right entitles the registered holder to purchase from
the Company one share of Common Stock at a price of $150.00
pet share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
The First National Bank of Boston, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") acquired, or
obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding Common Stock or (ii) 10 days
following the commencement or announcement of an intention to
make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or
group of affiliated or associated persons of 30% or more of
such outstanding Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock
certificates outstanding as of November 21, 1986, by such
Common Stock certificate with a copy of this Summary of
Rights attached thereto. The Rights Agreement provides that
until the Distribution Date the Rights will be transferred
with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after November 21, 1986 upon
transfer or new issuance of the Common Stock will contain a
notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Stock outstanding as of November 21,
1986, even without a copy of this Summary of Rights attached
thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on November 21, 1996, unless
earlier redeemed by the Company as described below.
The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights ate subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common
Stock of certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the current
market Price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings at a rate not
in excess of 125% of the rate of the last cash dividend
theretofore paid or dividends payable in Common Stock) or of
subscription rights or Warrants (other than those referred to
above).
In the event that the Company were acquired in a merger or
other business combination transaction in which mote than 50%
of its assets or earning power were sold, proper provision
shall be made so that each holder of a Right shall thereafter
have the tight to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the
time of such transaction would have a market value of two
times the exercise price of the Right. In the event that the
Company were the surviving corporation in a merger and its
Common Stock were not changed or exchanged, or in the event
that an Acquiring Person engages in one of a number of
self-dealing transactions specified in the Rights Agreement,
proper provision shall be made so that each holder of a
Right, other than Rights that were beneficially owned by the
Acquiring Person on the earlier of the Distribution Date or
the date of the public announcement that an Acquiring Person
acquired 20% or more of the outstanding Common Shares, will
thereafter have the tight to receive upon exercise that
number of shares of Common Stock having a market value of two
times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No
fractional shares will be issued and in lieu thereof an
adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date
of exercise.
At any time prior to the time that a person or group of
affiliated or associated persons has acquired beneficial
ownership of 20% or mote of the outstanding Common Stock, the
Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
an announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated November 6, 1986. A
copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby
incorporated herein by reference.
2940X