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EXHIBIT 4.1
WYMAN-GORDON COMPANY
AND
STATE STREET BANK AND TRUST COMPANY
AS RIGHTS AGENT
---------------
SHAREHOLDER RIGHTS AGREEMENT
DATED AS OF OCTOBER 21, 1998
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TABLE OF CONTENTS
SECTION PAGE
1. Certain Definitions 2
2. Appointment of Rights Agent 8
3. Issue of Right Certificates 8
4. Form of Right Certificates 10
5. Countersignature and Registration 12
6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates 12
7. Exercise of Rights; Exercise Price;
Expiration Date of Rights 13
8. Cancellation and Destruction of Right
Certificates 16
9. Reservation and Availability of Preferred Stock 16
10. Preferred Stock Record Date 18
11. Adjustment of Exercise Price, Number and
Kind of Shares or Number of Rights 18
12. Certificate of Adjusted Exercise Price
or Number of Shares 29
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 29
14. Fractional Rights and Fractional Shares 32
15. Rights of Action 33
16. Agreement of Right Holders 33
17. Right Certificate Holder Not Deemed a Shareholder 34
18. Concerning the Rights Agent 35
19. Merger or Consolidation or Change of Name
of Rights Agent 35
20. Duties of Rights Agent 36
21. Change of Rights Agent 38
22. Issuance of New Right Certificates 39
23. Redemption 40
24. Exchange 41
25. Notice of Certain Events 43
26. Notices 44
27. Supplements and Amendments 45
28. Successors 45
29. Determinations and Actions by the Board of
Directors 46
30. Benefits of this Agreement 46
31. Severability 46
32. Governing Law 47
33. Counterparts 47
34. Descriptive Headings 47
Exhibit A - Certificate of Designation of A1
Series B Junior Participating
Cumulative Preferred Stock
Exhibit B - Form of Right Certificate B1
(i)
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SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of October 21, 1998, between Wyman-
Gordon Company, a Massachusetts corporation (the "Company", and
State Street Bank and Trust Company, a Massachusetts chartered
trust company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to
provide shareholders of the Company with the opportunity to
benefit from the long-term prospects and value of the Company and
to ensure that shareholders of the Company receive fair and equal
treatment in the event of any proposed takeover of the Company;
and
WHEREAS, on October 19, 1988 the Board of Directors of
the Company authorized the Rights Agreement dated as of October
19, 1988, which was amended and restated as of January 10, 1994,
between the Company and State Street Bank and Trust Company, as
Rights Agent (the "Amended and Restated Rights Agreement"),
declared a dividend distribution of one Right (as such term is
defined in the Amended and Restated Rights Agreement) for each
outstanding share of Common Stock, par value $1.00 per share, of
the Company (the "Common Stock") outstanding as of the close of
business on November 30, 1988 (the "1988 Record Date"), and
authorized the issuance of one Right for each share of Common
Stock of the Company issued between the 1988 Record Date and the
earlier of the Distribution Date or the Expiration Date (as such
terms are defined in the Amended and Restated Rights Agreement),
each Right initially representing the right to purchase one one-
hundredth of a share of Series A Junior Participating Cumulative
Preferred Stock of the Company upon the terms and subject to the
conditions set forth in the Amended and Restated Rights
Agreement; and
WHEREAS, on October 21, 1998, the Board of Directors of the
Company determined it desirable and in the best interests of the
Company and its shareholders for the Company to extend the
benefits afforded by the Amended and Restated Rights Agreement
and to implement such extension by executing this Agreement; and
WHEREAS, on October 21, 1998, the Board of Directors of the
Company authorized and declared a dividend distribution of one
Right (as such term is hereinafter defined) for each outstanding
share of Common Stock of the Company outstanding as of the close
of business on November 30, 1998 (the "Record Date"), and
contemplates the issuance of one Right for each share of Common
Stock of the Company issued between the Record Date and the
earlier of the Distribution Date or the Expiration Date (as such
terms are hereinafter defined), each Right initially representing
the right to purchase one ten-thousandth of a share of Series B
Junior Participating Cumulative Preferred Stock of the Company
having the rights, powers and preferences set forth on Exhibit A
hereto, upon the terms and subject to the conditions hereinafter
set forth (the "Rights"); and
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WHEREAS, the Board of Directors desires that this Agreement
be effective as of the close of business of November 30, 1998
which is the final expiration date of the Amended and Restated
Rights Agreement; and
WHEREAS, the Company desires to appoint the Rights Agent to
act as rights agent hereunder, in accordance with the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates
(as such term is hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15%
or more of the shares of Common Stock of the Company then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan or compensation arrangement of
the Company or any Subsidiary of the Company or (iv) any Person
holding shares of Common Stock of the Company organized,
appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit
plan or compensation arrangement (the Persons described in
clauses (i) through (iv) above are referred to herein as "Exempt
Persons").
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition by the Company
of Common Stock of the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15%or more of the shares of
Common Stock of the Company then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 15% or more
of the shares of Common Stock of the Company then outstanding by
reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of
any additional shares (other than pursuant to a stock split,
stock dividend or similar transaction) of Common Stock of the
Company and immediately thereafter be the Beneficial Owner of 15%
or more of the shares of Common Stock of the Company then
outstanding, then such Person shall be deemed to be an "Acquiring
Person."
In addition, notwithstanding the foregoing, a Person shall
not be an "Acquiring Person" if (i) the Board of Directors of the
Company determines that a Person who would otherwise have been an
"Acquiring Person," as defined pursuant to the foregoing
provisions of this Section 1(a), on the date of this Agreement
became such without intending to become an "Acquiring Person,"
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and, if the Board of Directors of the Company so requests, such
Person shall have taken or agreed to take such action as the
Board of Directors shall have deemed appropriate (any such Person
being referred to herein as an "Inadvertent Grandfathered
Person"), or (ii) the Board of Directors of the Company
determines that a Person (including an Inadvertent Grandfathered
Person) who would otherwise be an "Acquiring Person," has become
such without intending to become an "Acquiring Person," and such
Person divests as promptly as practicable (or within such period
of time as the Board of Directors of the Company determines is
reasonable) a sufficient number of shares of Common Stock of the
Company so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this
Section 1(a). Notwithstanding the foregoing, (A) an Inadvertent
Grandfathered Person shall become an Acquiring Person if after
the date of this Agreement such Inadvertent Grandfathered Person
becomes the Beneficial Owner of more than the percentage of the
outstanding shares of Common Stock of the Company that such
Inadvertent Grandfathered Person Beneficially Owned as of the
date of this Agreement plus an additional 1/2%(the "Inadvertent
Grandfathered Percentage"), (B) in the event any Inadvertent
Grandfathered Person shall sell, transfer, or otherwise dispose
of any outstanding shares of Common Stock of the Company after
the date of this Agreement, the Inadvertent Grandfathered
Percentage applicable to such Inadvertent Grandfathered Person
shall, subsequent to such sale, transfer or disposition, mean,
with respect to such Inadvertent Grandfathered Person, the lesser
of (x) the Inadvertent Grandfathered Percentage as in effect
immediately prior to such sale, transfer or disposition or (y)
the percentage of outstanding shares of Common Stock of the
Company that such Inadvertent Grandfathered Person Beneficially
Owns immediately following such sale, transfer or disposition
plus an additional 1/2%, and (C) any Inadvertent Grandfathered
Person who after the date of this Agreement becomes the
Beneficial Owner of less than 15% of the shares of Common Stock
of the Company then outstanding shall cease to be an Inadvertent
Grandfathered Person. Any references in this Agreement to a 15%
threshold shall mean, solely with respect to any Inadvertent
Grandfathered Person, the Inadvertent Grandfathered Percentage
applicable to such Inadvertent Grandfathered Person.
Further, Cooper Industries, Inc. ("Cooper") and its
Affiliates and Associates (together, the "Cooper Group") shall
not be deemed to be an Acquiring Person for so long as (A) the
Cooper Group beneficially owns at least 10% or more of the
outstanding Common Shares continuously from and after the Record
Date and (B) the Cooper Group does not acquire beneficial
ownership of any Shares in breach of the Investment Agreement,
dated as of January 10, 1994, between Cooper and the Company
(other than an inadvertent breach which is remedied as promptly
as practicable by a transfer of the Common Shares so acquired to
a Person which is not a member of the Cooper Group).
(b) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
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(c) "Adverse Person" shall mean any Person declared to
be an Adverse Person by the Board of Directors upon a
determination of the Board of Directors that the criteria set
forth in Section 11(a)(ii)(B) apply to such Person.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations (the "Rules") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement; provided, however, that no
Person who is a director or officer of the Company shall be
deemed an Affiliate or an Associate of any other director or
officer of the Company solely as a result of his or her position
as director or officer of the Company.
(e) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person s
Affiliates or Associates, directly or indirectly,
beneficially owns (as determined pursuant to Rule 13d-3 of
the Rules under the Exchange Act, as in effect on the date
of this Agreement);
(ii) which such Person or any of such Person s
Affiliates or Associates, directly or indirectly, has:
(A) the right to acquire (whether such right
is exercisable immediately or only after the passage of
time or upon the satisfaction of any conditions or
both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities) or upon the exercise of
conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own,"
(1) 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; (2) securities issuable upon exercise of
these Rights at any time prior to the occurrence of a
Triggering Event; or (3) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such
Person or any of such Person s Affiliates or Associates
prior to the Distribution Date or pursuant to Sections
3(a), 11(i) or 22 hereof; or
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(B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B)
if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the Rules of the Exchange Act and (2) is not also then
reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(C) the right to dispose of pursuant to any
agreement, arrangement or understanding (whether or not
in writing) (other than customary arrangements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person s Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
(other than customary agreements with and between
underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of Section 1(d)(ii) hereof)
or disposing of any securities of the Company;
provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of
any securities acquired through such Person s participation as an
underwriter in good faith in a firm commitment underwriting until
the expiration of forty (40) days after the date of such
acquisition, and (2) no Person who is a director or an officer of
the Company shall be deemed, as a result of his or her position
as director or officer of the Company, the Beneficial Owner of
any securities of the Company that are beneficially owned by any
other director or officer of the Company.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law
or executive order to close.
(g) "Close of Business" on any given date shall mean
5:00 P.M., Boston, Massachusetts time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., Boston, Massachusetts time, on the next succeeding
Business Day.
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(h) "Common Stock" when used in reference to the
Company shall mean the common stock, par value $1.00 per share,
of the Company or any other shares of capital stock of the
Company into which such stock shall be reclassified or changed.
"Common Stock" when used with reference to any Person other than
the Company organized in corporate form shall mean (i) the
capital stock or other equity interest of such Person with the
greatest voting power, (ii) the equity securities or other equity
interest having power to control or direct the management of such
Person or (iii) if such Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-
mentioned Person and which have issued any such outstanding
capital stock, equity securities or equity interest. "Common
Stock" when used with reference to any Person not organized in
corporate form shall mean units of beneficial interest which (x)
shall represent the right to participate generally in the profits
and losses of such Person (including without limitation any flow-
through tax benefits resulting from an ownership interest in such
Person) and (y) shall be entitled to exercise the greatest voting
power of such Person or, in the case of a limited partnership,
shall have the power to remove or otherwise replace the general
partner or partners.
(i) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(j) "Depositary Agent" shall have the meaning set
forth in Section 7(c) hereof.
(k) "Distribution Date" shall have the meaning defined
in Section 3(a) hereof.
(l) "Exercise Price" shall have the meaning defined in
Section 4(a) hereof.
(m) "Expiration Date" and "Final Expiration Date"
shall have the meanings set forth in Section 7(a) hereof.
(n) "Fair Market Value" of any securities or other
property shall be as determined in accordance with Section 11(d)
hereof.
(o) "Group" shall have the meaning set forth in clause
(b) of the definition of "Person."
(p) "Person" shall mean (a) an individual, a
corporation, a partnership, an association, a joint stock
company, a trust, a business trust, a government or political
subdivision, any unincorporated organization, or any other
association or entity, and (b) a "group" as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
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(q) "Preferred Stock" shall mean shares of Series B
Junior Participating Cumulative Preferred Stock, par value $1.00
per share, of the Company having the rights and preferences set
forth in the form of Certificate of Designation attached hereto
as Exhibit A.
(r) "Preferred Stock Equivalents" shall have the
meaning set forth in Section 11(b) hereof.
(s) "Principal Party" shall have the meaning defined
in Section 13(b) hereof.
(t) "Redemption Price" shall have the meaning defined
in Section 23 hereof.
(u) "Registered Common Stock" shall have the meaning
set forth in Section 13(b) hereof.
(v) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(z) "Section 24(a)(i) Exchange Ratio" shall have the
meaning set forth in Section 24(a)(i) hereof.
(aa) "Section 24(a)(ii) Exchange Ratio" shall have the
meaning set forth in Section 24(a)(ii) hereof.
(bb) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(cc) "Stock Acquisition Date" shall mean the date of
the first public announcement (which for purposes of this
definition shall include, without limitation, the issuance of a
press release or the filing of a publicly-available report or
other document with the Securities and Exchange Commission or any
other governmental agency) by the Company, acting pursuant to a
resolution adopted by the Board of Directors of the Company, or
an Acquiring Person that an Acquiring Person has become such.
(dd) "Subsidiary" shall mean, with reference to any
Person, any corporation or other entity of which securities or
other ownership interests having ordinary voting power
sufficient, in the absence of contingencies, to elect a majority
of the board of directors or other persons performing similar
functions of such corporation or other entity are at the time
directly or indirectly beneficially owned or otherwise controlled
by such Person either alone or together with one or more
Affiliates of such Person.
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(ee) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ff) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date (as hereinafter defined in
Section 3(a)) also be the holders of the Common Stock of the
Company) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable. In the event the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall
determine. The Company shall give ten (10) days prior written
notice to the Rights Agent of the appointment of one or more Co-
Rights Agents and the respective duties of the Rights Agent and
any such Co-Rights Agents. The Rights Agent shall have no duty
to supervise, and shall in no event be liable for, the acts or
omissions of any such Co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) From the date hereof until the earliest of (i) the
Close of Business on the tenth calendar day after the Stock
Acquisition Date, (ii) the Close of Business on the tenth
Business Day (or such later calendar day, if any, as the Board of
Directors of the Company may determine in its sole discretion)
after the date a tender or exchange offer by any Person, other
than an Exempt Person, is first published or sent or given within
the meaning of Rule 14d-4(a) of the Exchange Act, or any
successor rule, if, upon consummation thereof, such Person would
become an Acquiring Person, or (iii) the determination by the
Board of Directors of the Company, pursuant to the criteria set
forth in Section 11(a)(ii)(B) hereof, that a Person is an Adverse
Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights) (the earliest
of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for the
Common Stock of the Company registered in the names of the
holders of the Common Stock of the Company (which certificates
for Common Stock of the Company shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock of the Company.
As soon as practicable after the Distribution Date, the Rights
Agent will, at the Company s expense send, by first-class,
insured, postage prepaid mail, to each record holder of the
Common Stock of the Company as of the Close of Business on the
Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in
substantially the form of Exhibit B hereto (the "Right
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Certificates"), evidencing one Right for each share of Common
Stock of the Company so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights
per share of Common Stock of the Company has been made pursuant
to Section 11(o) hereof, the Company may make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) With respect to certificates for the Common Stock
of the Company issued prior to the Close of Business on the
Record Date, the Rights will be evidenced by such certificates
for the Common Stock of the Company on or until the Distribution
Date (or the earlier redemption, expiration or termination of the
Rights), and the registered holders of the Common Stock of the
Company also shall be the registered holders of the associated
Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the transfer of any of
the certificates for the Common Stock of the Company outstanding
prior to the date of this Agreement shall also constitute the
transfer of the Rights associated with the Common Stock of the
Company represented by such certificate.
(c) Certificates for the Common Stock of the Company
issued after the Record Date, but prior to the earlier of the
Distribution Date or the redemption, expiration or termination of
the Rights, shall be deemed also to be certificates for Rights,
and shall bear a legend, substantially in the form set forth
below:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in a Shareholder Rights Agreement
between Wyman-Gordon Company and State Street
Bank and Trust Company, as Rights Agent,
dated as of October 21, 1998, as amended,
restated, renewed or extended from time to
time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by
reference and a copy of which is on file at
the principal offices of Wyman-Gordon Company
and the stock transfer administration office
of the Rights Agent. 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. Wyman-Gordon
Company may redeem the Rights at a redemption
price of $0.01 per Right, subject to
adjustment, under the terms of the Rights
Agreement. Wyman-Gordon Company will mail to
the holder of this certificate a copy of the
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Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written
request therefor. Under certain circumstances, Rights
issued to or held by Acquiring Persons, Adverse Persons
or any Affiliates or Associates thereof (as defined in
the Rights Agreement), and any subsequent holder of
such Rights, may become null and void. The Rights
shall not be exercisable, and shall be void so long as
held, by a holder in any jurisdiction where the
requisite qualification, if any, to the issuance to
such holder, or the exercise by such holder, of the
Rights in such jurisdiction shall not have been
obtained or be obtainable.
With respect to such certificates containing the foregoing
legend, the Rights associated with the Common Stock of the
Company represented by such certificates shall be evidenced by
such certificates alone until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), and
the transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock of
the Company represented by such certificates. In the event that
the Company purchases or acquires any shares of Common Stock of
the Company after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock of the Company
shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares
of Common Stock of the Company which are no longer outstanding.
The failure to print the foregoing legend on any such certificate
representing Common Stock of the Company or any defect therein
shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election
to purchase shares and of assignment and certificate to be
printed on the reverse thereof) shall each be substantially in
the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law, rule or regulation 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 customary usage. The Right Certificates
shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date, shall
show the date of countersignature, and on their face shall
entitle the holders thereof to purchase such number of one ten-
thousandths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (the "Exercise Price"),
but the number of such shares and the Exercise Price shall be
subject to adjustment as provided herein.
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(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of an Acquiring Person or an Adverse
Person, (ii) a transferee of an Acquiring Person or an Adverse
Person (or of any Associate or Affiliate of an Acquiring Person
or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such, or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement,
arrangement or understanding (whether or not in writing)
regarding the transferred Rights, the shares of Common Stock of
the Company associated with such Rights or the Company or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of Section 7(e)
hereof, and any Right Certificate issued pursuant to Section 6,
Section 11 or Section 22 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this
sentence, shall have deleted therefrom the second sentence of the
existing legend on such Right Certificate and in substitution
therefor shall contain the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
Person, an Adverse Person or an Affiliate or
an Associate of an Acquiring Person or an
Adverse Person (as such terms are defined in
the Rights Agreement). This Right
Certificate and the Rights represented hereby
may become null and void under certain
circumstances as specified in Section 7(e) of
the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after
it becomes aware of the existence and identity of any Acquiring
Person or Adverse Person or any Associate or Affiliate thereof.
The Company shall instruct the Rights Agent in writing of the
Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect
therein shall not affect in any manner whatsoever the application
or interpretation of the provisions of Section 7(e) hereof.
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SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf
of the Company by its Chairman of the Board of Directors, or its
President or any Vice President and by its Treasurer or any
Assistant Treasurer, or by its Clerk or any Assistant Clerk,
either manually or by facsimile signature, and shall have affixed
thereto the Company s seal or a facsimile thereof which shall be
attested to by the Clerk or any Assistant Clerk of the Company,
either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by an authorized
signatory of the Rights Agent and shall not be valid for any
purpose unless so countersigned, and such countersignature upon
any Right Certificate shall be conclusive evidence, and the only
evidence, that such Right Certificate has been duly countersigned
as required hereunder. 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 an authorized
signatory of 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 Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at one of its offices designated
as the appropriate place for surrender of Right Certificates upon
exercise or transfer, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close
of Business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the
registered holder to purchase a like number of one ten-
thousandths of a share of Preferred Stock (or following a
Triggering Event, preferred stock, cash, property, debt
securities, Common Stock of the Company or any combination
thereof) as the Right Certificate or Certificates surrendered
then entitled such holder to purchase and at the same Exercise
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Price. 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 Certificates to be transferred, split up,
combined or exchanged, with the form of assignment and
certificate duly executed, at the office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate
until the registered holder shall have completed and signed the
certificate contained in 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 shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Certificates, as the case may be, as so
requested. The Company may require payment by the registered
holder of a Right Certificate, 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.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security satisfactory
to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate, if
mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION
DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, 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 the
certificate on the reverse side thereof duly executed, to the
Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Exercise Price for the total number of one ten-
thousandths of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the earlier
of (i) the Close of Business on the tenth anniversary of the
Record Date (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof or
(iii) the time at which such Rights are exchanged as provided in
Section 24 hereof (the earlier of (i), (ii) or (iii) being herein
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referred to as the "Expiration Date"). Except as set forth in
Section 7(e) hereof and notwithstanding any other provision of
this Agreement, any Person who prior to the Distribution Date
becomes a record holder of shares of Common Stock of the Company
may exercise all of the rights of a registered holder of a Right
Certificate with respect to the Rights associated with such
shares of Common Stock of the Company in accordance with the
provisions of this Agreement, as of the date such Person becomes
a record holder of shares of Common Stock of the Company.
(b) The Exercise Price for each one ten-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right
shall initially be seventy-five dollars ($75.00), shall be
subject to adjustment from time to time as provided in Section 11
and Section 13 hereof and shall be payable in lawful money of the
United States of America in accordance with Section 7(c) below.
(c) As promptly as practicable following the
Distribution Date, the Company shall deposit with a corporation,
trust, bank or similar institution in good standing organized
under the laws of the United States or any State of the United
States, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by a federal or state authority (such institution is
hereinafter referred to as the "Depositary Agent"), certificates
representing the shares of Preferred Stock that may be acquired
upon exercise of the Rights and the Company shall cause such
Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in
the shares of Preferred Stock so deposited. Upon receipt of a
Right Certificate representing exercisable Rights, with the form
of election to purchase and the certificate on the reverse side
thereof duly executed, accompanied by payment of the Exercise
Price for the shares to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) by
certified check or bank draft payable to the order of the Company
or by money order, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent (or make available, if the Rights Agent is the
Depositary Agent) depository receipts or certificates for the
number of one ten-thousandths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes the
Depositary Agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if
any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly 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. In the event that
the Company is obligated to issue other securities (including
Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash or
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other property are available for distribution by the Rights
Agent, if and when appropriate. The payment of the Exercise
Price may be made by certified or bank check payable to the order
of the Company, or by money order or wire transfer of immediately
available funds to the account of the Company (provided that
notice of such wire transfer shall be given by the holder of the
related Right to the Rights Agent).
(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 and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event or Section 13 Event, any Rights beneficially
owned by (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of an Acquiring Person or an Adverse
Person, (ii) a transferee of an Acquiring Person or an Adverse
Person (or of any Associate or Affiliate of an Acquiring Person
or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of any
Associate or Affiliate of an Acquiring Person or an Adverse
Person) who becomes a transferee prior to or concurrently with
the Acquiring Person or Adverse Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or Adverse
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, the shares of Common Stock of
the Company associated with such Rights or the Company, or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
7(e), shall be null and void without any further action and no
holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as
a result of its failure to make any determinations with respect
to an Acquiring Person or Adverse Person or any Affiliates or
Associates of an Acquiring Person or an Adverse Person or any
transferee of any of them hereunder.
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(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled 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 canceled Right Certificates to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock or any authorized and issued
shares of Preferred Stock held in its treasury, the number of
shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding and exercisable Rights. Upon
the occurrence of any events resulting in an increase in the
aggregate number of shares of Preferred Stock issuable upon
exercise of all outstanding Rights in excess of the number then
reserved, the Company shall make appropriate increases in the
number of shares so reserved.
(b) The Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all
shares of Preferred Stock issued or reserved for issuance to be
listed, upon official notice of issuance, upon the principal
national securities exchange, if any, upon which the Common Stock
of the Company is listed or, if the principal market for the
Common Stock of the Company is not on any national securities
exchange, to be eligible for quotation on the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") or any successor thereto or other comparable quotation
system.
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(c) The Company shall use its best efforts to
(i) file, as soon as practicable following the earliest date
after the occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as required by law following the Distribution
Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities or (B) the
Expiration Date. The Company will also take such action as may
be appropriate under, and which will ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety
(90) days after the date determined in accordance with the
provisions of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect, in each case with
prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Preferred Stock delivered upon the exercise of the Rights shall,
at the time of delivery of the certificates or depositary
receipts for such shares (subject to payment of the Exercise
Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
certificates for shares of Preferred Stock 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 in
respect of the issuance or delivery of securities in a name other
than that of, the registered holder of the Right Certificates
evidencing Rights surrendered for exercise or to issue or deliver
any certificates for securities in a name other than that of the
registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has
been established to the Company s satisfaction that no such tax
is due.
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SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in
whose name any certificate for Preferred Stock (including any
fraction of a share of Preferred Stock) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price (and any
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer
books of the Company are open; and further provided, however,
that if delivery of shares of Preferred Stock is delayed pursuant
to Section 9(c), such Person shall be deemed to have become the
record holder of such shares of Preferred Stock only when such
shares first become deliverable. Prior to the exercise of the
Right evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS. The Exercise Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Exercise 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 Preferred Stock transfer books
of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
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provided, however, that in no event shall the consideration
to be paid upon the exercise of a Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of a Right. If an event
occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24
hereof, in the event
(A) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring
Person, or
(B) the Board of Directors of the Company,
by majority vote, shall declare any Person to be an
Adverse Person, after (x) a determination that such
Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock of the
Company and (y) a determination by the Board of
Directors, after reasonable inquiry and investigation,
including such consultation, if any, with such persons
as such directors shall deem appropriate, that (a) such
Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause the
Company to repurchase the Common Stock of the Company
beneficially owned by such Person or to cause pressure
on the Company to take action or enter into a
transaction or series of transactions which would
provide such Person with short-term financial gain
under circumstances where the Board of Directors
determines that the best long-term interests of the
Company and its shareholders, but for the actions and
possible actions of such Person, would not be served by
taking such action or entering into such transactions
or series of transactions at that time or (b) such
Beneficial Ownership is causing or reasonably likely to
cause a material adverse impact (including, but not
limited to, impairment of relationships with customers
or impairment of the Company s ability to maintain its
competitive position) on the business or prospects of
the Company. No delay or failure by the Board of
Directors to declare a Person to be an Adverse Person
shall in any way waive or otherwise affect the power of
the Board of Directors subsequently to declare a Person
to be an Adverse Person. In the event that the Board
of Directors should at any time determine, upon
reasonable inquiry and investigation, including
consultation with such Persons as the Board of
Directors shall deem appropriate, that such Person has
not met or complied with any condition specified by the
Board of Directors, the Board of Directors may at any
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time thereafter declare such Person to be an Adverse
Person pursuant to the provisions of this
Section 11(a)(ii)(B),
then, and in each such case, promptly following any such
occurrence (a "Section 11(a)(ii) Event"), proper provision
shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have a
right to receive, upon exercise thereof at the then current
Exercise Price in accordance with the terms of this
Agreement, such number of shares of Preferred Stock of the
Company as shall equal the result obtained by
(x) multiplying the then current Exercise Price by the then
number of one ten-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, whether or
not such Right was then exercisable, and dividing that
product by (y) 50% of the Fair Market Value per one ten-
thousandth of a share of the Preferred Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of
a Section 11(a)(ii) Event (such number of shares being
referred to as the "Adjustment Shares").
(iii) In lieu of issuing any shares of
Preferred Stock in accordance with Section 11(a)(ii)
hereof, the Company, acting by or pursuant to a
resolution of the Board of Directors of the Company,
may, and in the event that the number of shares of
Preferred Stock which are authorized by the Company s
Articles of Organization but not outstanding or
reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by or pursuant to a resolution of the
Board of Directors of the Company, shall: (A)
determine the excess of (X) the Fair Market Value of
the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (Y) the Exercise Price
attributable to each Right (such excess being referred
to as the "Spread") and (B) with respect to all or a
portion of each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable
Exercise Price, (1) cash, (2) a reduction in the
Exercise Price, (3) Preferred Stock Equivalents which
the Board of Directors of the Company has deemed to
have the same value as shares of Common Stock of the
Company, (4) debt securities of the Company, (5) other
assets of the Company or (6) any combination of the
foregoing which, when added to any shares of Preferred
Stock issued upon such exercise, has an aggregate value
equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the
Company based upon the advice of a nationally
recognized investment banking firm selected by the
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Board of Directors of the Company; provided, however,
that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company s right of redemption
pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares
of Preferred Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith
that it is likely that sufficient additional shares of
Preferred Stock could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended,
being referred to herein as the "Substitution Period").
To the extent that the Company determines that some
action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of
the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended and a public announcement at such time as the
suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the Preferred
Stock shall be the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per share of the
Preferred Stock on the Section 11(a)(ii) Trigger Date
and the value of any Preferred Stock Equivalent shall
be deemed to have the same value as the Preferred Stock
on such date.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Stock (or securities having
the same or more favorable rights, privileges and preferences as
the shares of Preferred Stock ("Preferred Stock Equivalents")) or
securities convertible into Preferred Stock or Preferred Stock
-21-
24
Equivalents at a price per share of Preferred Stock or per share
of Preferred Stock Equivalents (or having a conversion price per
share, if a security convertible into Preferred Stock or
Preferred Stock Equivalents) less than the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, the Exercise Price to be in
effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus
the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock
and/or Preferred Stock Equivalents to be offered (and the
aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such Fair Market Value and
the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and Preferred Stock
Equivalents to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of a Right be less
than the aggregate par value of the shares of stock of the
Company issuable upon exercise of a Right. 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 the Fair Market Value thereof determined
in accordance with Section 11(d) hereof. Shares of Preferred
Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation.
Such adjustments 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 Exercise Price shall be adjusted
to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or convertible securities,
subscription rights or warrants (excluding those referred to in
Section 11(b)), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one ten-
thousandth of a share of Preferred Stock on such record date,
less the Fair Market Value (as determined pursuant to
Section 11(d) hereof) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants
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applicable to one ten-thousandth of a share of Preferred Stock
and the denominator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one ten-
thousandth of a share of Preferred Stock; provided, however, that
in no event shall the consideration to be paid upon the exercise
of a Right be less than the aggregate par value of the shares of
stock of the Company issuable upon exercise of a Right. Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Exercise Price shall again be adjusted to be the
Exercise Price which would be in effect if such record date had
not been fixed.
(d) For the purpose of this Agreement, the "Fair
Market Value" of any share of Preferred Stock, Common Stock or
any other stock or any Right or other security or any other
property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or
other security, the Fair Market Value on any date shall
be deemed to be the average of the daily closing prices
per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the
Fair Market Value per share of any share of stock is
determined during a period following the announcement
by the issuer of such stock of (x) a dividend or
distribution on such stock payable in shares of such
stock or securities convertible into shares of such
stock or (y) any subdivision, combination or
reclassification of such stock, and prior to the
expiration of the 30 Trading Day period 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 Fair
Market Value shall be properly adjusted to take into
account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New
York Stock Exchange or, if the securities 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 such security is listed or admitted to trading;
or, if not listed or admitted to trading on any
national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted
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 no bids for such
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security are 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 such security selected by the Board of
Directors of the Company. If on any such date no
market maker is making a market in such security, the
Fair Market Value of such security on such date shall
be determined reasonably and with utmost good faith to
the holders of the Rights by the Board of Directors of
the Company, provided, however, that if at the time of
such determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such security
on such date shall be determined by a nationally
recognized investment banking firm selected by the
Board of Directors of the Company, which determination
shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the
holders of the Rights. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which such security is listed or admitted
to trading is open for the transaction of business or,
if such security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(ii) If a security is not publicly held or not so
listed or traded, "Fair Market Value" shall mean the
fair value per share of stock or per other unit of such
security, determined reasonably and with utmost good
faith to the holders of the Rights by the Board of
Directors of the Company; provided, however, that if at
the time of such determination there is an Acquiring
Person or an Adverse Person, the Fair Market Value of
such security on such date shall be determined by a
nationally recognized investment banking firm selected
by the Board of Directors of the Company, which
determination shall be described in a statement filed
with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights; provided,
however, that for the purposes of making any adjustment
provided for by Section 11(a)(ii) hereof, the Fair
Market Value of a share of Preferred Stock shall not be
less than the product of the then Fair Market Value of
a share of Common Stock multiplied by the higher of the
then Dividend Multiple or Vote Multiple (as both of
such terms are defined in the Certificate of
Designation attached as Exhibit A hereto) applicable to
the Preferred Stock and shall not exceed 105% of the
product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the
Preferred Stock.
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(iii) In the case of property other than
securities, the Fair Market Value thereof shall be
determined reasonably and with utmost good faith to the
holders of Rights by the Board of Directors of the
Company; provided, however, that if at the time of such
determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such property
on such date shall be determined by a nationally
recognized investment banking firm selected by the
Board of Directors of the Company, which determination
shall be described in a statement filed with the Rights
Agent and shall be binding upon the Rights Agent and
the holders of the Rights.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Exercise 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 one-millionth of a share of
Common Stock of the Company or hundred-millionth of a share of
Preferred Stock, as the case may be, or to such other figure as
the Board of Directors of the Company may deem appropriate.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment or (ii) the Expiration
Date.
(f) If as a result of any provision of Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (d), (e), (g) through (k) and (m),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder
shall evidence the right to purchase, at the adjusted Exercise
Price, the number of one ten-thousandths of a share of Preferred
Stock (or other securities or amount of cash or combination
thereof) purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Exercise 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 Exercise Price, that number of
one ten-thousandths of a share of Preferred Stock (calculated to
the nearest hundred-millionth) as the Board of Directors of the
Company determines is appropriate to preserve the economic value
of the Rights, including, by way of example, that number obtained
by (i) multiplying (x) the number of one ten-thousandths of a
share of Preferred Stock for which a Right may be exercisable
immediately prior to this adjustment by (y) the Exercise Price in
effect immediately prior to such adjustment of the Exercise Price
and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise
Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights,
in substitution for any adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one ten-thousandths
of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one-millionth)
obtained by dividing the Exercise Price in effect immediately
prior to adjustment of the Exercise Price by the Exercise Price
in effect immediately after adjustment of the Exercise 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 Exercise Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least ten (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 may bear, at the option of the Company,
the adjusted Exercise Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date
specified in the public announcement.
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(j) Irrespective of any adjustment or change in the
Exercise Price or the number of one ten-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue
to express the Exercise Price per share and the number of shares
which were expressed in the initial Right Certificates issued
hereunder without prejudice to any adjustment or change.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below the then stated
value, if any, of the number of one ten-thousandths of a share of
Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred
Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Exercise Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the number
of one ten-thousandths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one ten-thousandths of
a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder s right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in its good faith judgment the Board of Directors of
the Company shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the
Fair Market Value, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Stock, shall not be taxable
to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date and so long as the
Rights have not been redeemed pursuant to Section 23 hereof or
exchanged pursuant to Section 24 hereof, (i) consolidate with
(other than a Subsidiary of the Company in a transaction that
complies with the proviso at the end of this sentence), (ii)
merge with or into, or (iii) sell or transfer (or permit any
-27-
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Subsidiary to sell or transfer), in one transaction or a series
of related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with the proviso at the
end of this sentence) if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants
or other instruments outstanding or agreements or arrangements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale the shareholders of a Person who constitutes, or
would constitute, the "Principal Party" for the purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates; provided, however, that this Section 11(n) shall not
affect the ability of any Subsidiary of the Company to
consolidate with, or merge with or into, or sell or transfer
assets or earning power to, any other Subsidiary of the Company.
The Company further covenants and agrees that after the
Distribution Date it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) Notwithstanding anything in this Agreement to the
contrary, in the event the Company shall at any time after the
date of this Agreement and prior to the Distribution Date (i)
declare or pay any dividend on the outstanding Common Stock of
the Company payable in shares of Common Stock of the Company or
(ii) effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock of the Company (by
reclassification or otherwise than by payment of dividends in
shares of Common Stock of the Company) into a greater or lesser
number of shares of Common Stock of the Company, then in any such
case (A) the number of one ten-thousandths of a share of
Preferred Stock purchasable after such event upon proper exercise
of each Right shall be determined by multiplying the number of
one ten-thousandths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock of the Company
outstanding immediately prior to such event and the denominator
of which is the number of shares of Common Stock of the Company
outstanding immediately after such event, and (B) each share of
Common Stock of the Company outstanding immediately after such
event shall have issued with respect to it that number of Rights
which each share of Common Stock of the Company outstanding
immediately prior to such event had issued with respect to it.
The adjustments provided for in this Section 11(o) shall be made
successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
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(p) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii)
to the extent so exercised and shall not otherwise affect the
rights of holders of Right Certificates under this Rights
Agreement, including rights to purchase securities of the
Principal Party following a Section 13 Event which has occurred
or may thereafter occur, as set forth in Section 13 hereof. Upon
exercise of a Right Certificate under Section 11(a)(ii), the
Rights Agent shall return such Right Certificate duly marked to
indicate that such exercise has occurred.
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock of the Company 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 of the Company) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment contained
therein and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such
certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which is not prohibited by the proviso at the end
of the first sentence of Section 11(n) hereof) 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
shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of
which is not prohibited by the proviso at the end of the first
sentence of Section 11(n) hereof), then, and in each such case,
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proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall have the
right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined in Section 13(b)), free
and clear of rights of call or first refusal, liens,
encumbrances, transfer restrictions or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Exercise Price by the number of one ten-thousandths of a
share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event,
and dividing that product by (2) 50% of the Fair Market Value
(determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale, mortgage or
transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to
such Principal Party; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock to permit
exercise of all outstanding Rights in accordance with this
Section 13(a) and the making of payments in cash and/or other
securities in accordance with Section 11(a)(iii) hereof) 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 its shares of Common
Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, or, if there is more than one such
issuer, the issuer of Common Stock that has the highest
aggregate Fair Market Value (determined pursuant to Section
11(d)), and if no securities are so issued, the Person that
is the other party to the merger or consolidation, or, if
there is more than one such Person, the Person the Common
Stock of which has the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power transferred pursuant
to such transaction or transactions or if the Person
-30-
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receiving the largest portion of the assets or earning power
cannot be determined, whichever Person the Common Stock of
which has the highest aggregate Fair Market Value
(determined pursuant to Section 11(d));
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding 12-month period registered under Section 12 of
the Exchange Act ("Registered Common Stock") or such Person is
not a corporation, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person who has Registered
Common Stock outstanding, "Principal Party" shall refer to such
other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person
but is not a direct or indirect Subsidiary of another Person
which has Registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned
Person; (3) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of such
other Persons is the issuer of the Registered Common Stock having
the highest aggregate Fair Market Value (determined pursuant to
Section 11(d)); and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and
such Person is directly or indirectly controlled by more than one
Person, and none of such other Persons has Registered Common
Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest
stockholders equity or, if no such ultimate parent entity is a
corporation, "Principal Party" shall refer to whichever ultimate
parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto (x)
the Principal Party shall have a sufficient number of authorized
shares of its Common Stock, which have not been issued or
reserved for issuance, to permit the exercise in full of the
Rights in accordance with this Section 13, and (y) the Company
and each Principal Party and each other Person who may become a
Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in Section 13(a), the Principal
Party at its own expense will:
(i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, cause such registration statement to
become effective as soon as practicable after such filing
and cause such registration statement to remain effective
(with a prospectus that at all times meets the requirements
of the Securities Act) until the Expiration Date;
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(ii) qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii)list (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
(d) In case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has a provision
in any of its authorized securities or in its Certificate of
Incorporation or Bylaws or other instrument governing its
affairs, which provision would have the effect of (i) causing
such Principal Party to issue (other than to holders of Rights
pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock of such Principal Party
at less than the then current Fair Market Value (determined
pursuant to Section 11(d)) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less
than such Fair Market Value, or (ii) providing for any special
payment, tax or similar provisions in connection with the
issuance of the Common Stock of such Principal Party pursuant to
the provisions of this Section 13, then, in such event, the
Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party
shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
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, except prior to the Distribution Date as
provided in Section 11(o) hereof, or to distribute Right
Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall
pay, in lieu of such fractional Rights, 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 Fair Market Value of a whole Right, as
determined pursuant to Section 11(d) hereof.
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(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one ten-thousandth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one ten-
thousandth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
ten-thousandth of a share of Preferred Stock, the Company may pay
to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the Fair Market Value of one ten-
thousandth of a share of Preferred Stock. For purposes of this
Section 14(b), the Fair Market Value of one ten-thousandth of a
share of Preferred Stock shall be 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
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right
Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock of the Company); and any registered
holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock of the Company), without the consent of
the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock of the
Company), may, in such registered holder s own behalf and for
such registered holder s 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 Right 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of
Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys fees, incurred by them in any
action to enforce the provisions of 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:
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(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer
of shares of Common Stock of the Company;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office or offices of the
Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f), the Company and
the Rights Agent may deem and treat the person in whose name a
Right Certificate (or, prior to the Distribution Date, the
associated certificate representing Common Stock of the Company)
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 certificate
representing Common Stock of the Company made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and, subject to the last sentence of Section 7(e),
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as the result
of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of
such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
SECTION 17. 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 shares of Preferred Stock or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in Section 25 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.
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SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to in writing between the Company
and the Rights Agent for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross 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 arising
therefrom, directly or indirectly. The provisions of this
Section 18(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Right Certificate or
certificate representing Common Stock of the Company, Preferred
Stock, or other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it in good
faith and without negligence to be genuine and to be signed and
executed by the proper Person or Persons.
(c) The Rights Agent shall not be liable for
consequential damages under any provision of this Agreement or
for any consequential damages arising out of any act or failure
to act hereunder.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services 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
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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 or in the name of the
successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) 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 provided in the
Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations expressly 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
selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person or Adverse Person and the
determination of "Fair Market Value") 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
shall be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the
Board of Directors, a Vice Chairman of the Board of Directors,
the President, a Vice President, the Treasurer, any Assistant
Treasurer, the Clerk or an Assistant Clerk of the Company and
delivered to the Rights Agent. Any such certificate shall be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
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(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 the Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment
required under the provisions of Sections 11, 13 or 23(c) hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt
of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof), nor shall it be responsible
for any determination by the Board of Directors of the Company of
the Fair Market Value of the Rights or Preferred Stock pursuant
to the provisions of Section 14 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock of
the Company or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of
Common Stock of the Company or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any
provision hereof from any person believed by the Rights Agent to
be the Chairman of the Board of Directors, any Vice Chairman of
the Board of Directors, the President, a Vice President, the
Clerk, an Assistant Clerk, the Treasurer or an Assistant
Treasurer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer. 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
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proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application
(which date shall not be less than five Business Days after the
date any officer of the Company actually receives such
application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have 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 the
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause (1) or
clause (2) thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer
without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days notice in
writing mailed to the Company by first class mail. The Company
may remove the Rights Agent or any successor Rights Agent (with
or without cause), effective immediately or on a specified date,
by written notice given to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Stock of the Company and Preferred Stock, and by giving
notice to the holders of the Right Certificates by any means
reasonably determined by the Company to inform such holders of
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such removal (including without limitation, by including such
information in one or more of the Company s reports to
shareholders or reports or filings with the Securities and
Exchange Commission). If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent
Rights Agent or the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the
United States or of the Commonwealth of Massachusetts or the
State of New York (or of any other state of the United States so
long as such corporation is authorized to do business as a
banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under
such laws to exercise stock transfer or corporate trust powers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000 or
(b) an Affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock of the Company and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by the Board of Directors of the Company to reflect any
adjustment or change in the Exercise Price per share and the
number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of shares of Common Stock
of the Company following the Distribution Date and prior to the
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redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock of the Company so issued
or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the person to whom such Right Certificate would be
issued, and (ii) no such Right Certificate shall be issued if,
and to the extent that, appropriate adjustments shall otherwise
have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its
option, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any dividend declared or paid on the Common
Stock of the Company in shares of Common Stock of the Company or
any subdivision or combination of the outstanding shares of
Common Stock of the Company or similar event occurring after the
date of this Agreement (such redemption price, as adjusted from
time to time, being hereinafter referred to as the "Redemption
Price"). The Rights may be redeemed only until the earliest to
occur of (i) the time at which any Person becomes an Acquiring
Person, (ii) the declaration by the Board of Directors that any
Person is an Adverse Person or (iii) the Final Expiration Date.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights in
accordance with Section 23 hereof, and without any further action
and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors of the
Company ordering the redemption of the Rights in accordance with
Section 23 hereof, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and
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 Stock of the Company. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. The Company promptly shall
mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice 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
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will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 or Section 24 hereof or in connection with the
purchase of shares of Common Stock of the Company prior to the
Distribution Date.
(c) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock of the Company (based on
the Fair Market Value of the Common Stock of the Company as of
the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Company.
SECTION 24. EXCHANGE.
(a) (i) The Board of Directors of the Company may, at
its option, at any time on or after the occurrence of a
Section 11(a)(ii) Event, exchange all or part of the
then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to
the provisions of Section 7(e) hereof) for shares of
Common Stock of the Company at an exchange ratio of one
share of Common Stock of the Company per Right,
appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter
referred to as the "Section 24(a)(i) Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors
of the Company shall not be empowered to effect such
exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock of the Company.
(ii) Notwithstanding the foregoing, the Board of
Directors of the Company may, at its option, at any
time on or after the occurrence of a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock of the Company
at an exchange ratio specified in the following
sentence, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction
occurring after the date of this Agreement. Subject to
the adjustment described in the foregoing sentence,
each Right may be exchanged for that number of shares
of Common Stock of the Company obtained by dividing the
Spread (as defined in Section 11(a)(iii)) by the then
Fair Market Value per one ten-thousandth of a share of
Preferred Stock on the earlier of (x) the date on which
any person becomes an Acquiring Person or (y) the date
on which a tender or exchange offer by any Person
(other than an Exempt Person) is first published or
sent or given within the meaning of Rule 14d-4(a) of
the Exchange Act or any successor rule, if upon
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44
consummation thereof such Person would become an
Acquiring Person (such exchange ratio being referred to
herein as the "Section 24(a)(ii) Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors
of the Company shall not be empowered to effect such
exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock of the Company.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of
Common Stock of the Company equal to the number of such Rights
held by such holder multiplied by the Section 24(a)(i) Exchange
Ratio or the Section 24(a)(ii) Exchange Ratio, as applicable.
The Company shall promptly give notice of any such exchange in
accordance with Section 26 hereof and shall promptly mail a
notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of
the Rights Agent; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock of the
Company for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or
Preferred Stock Equivalent, as such term is defined in Section
11(b) hereof) for Common Stock of the Company exchangeable for
Rights, at the initial rate of one ten-thousandth of a share of
Preferred Stock (or Preferred Stock Equivalent) for each share of
Common Stock of the Company, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant
to the terms thereof, so that the fraction of a share of
Preferred Stock delivered in lieu of each share of Common Stock
of the Company shall have the same voting rights as one share of
Common Stock of the Company.
(d) In the event that there shall not be sufficient
shares of Common Stock of the Company or Preferred Stock (or
Preferred Stock Equivalents) issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional shares of Common Stock of the Company or Preferred
Stock (or Preferred Stock Equivalent) for issuance upon exchange
of the Rights.
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(e) The Company shall not be required to issue
fractions of Common Stock of the Company or to distribute
certificates which evidence fractional shares of Common Stock of
the Company. If the Company elects not to issue such fractional
shares of Common Stock of the Company, the Company shall pay, in
lieu of such fractional shares of Common Stock of the Company, to
the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock of the Company would
otherwise be issuable, an amount in cash equal to the same
fraction of the Fair Market Value of a whole share of Common
Stock of the Company. For the purposes of this paragraph (e),
the Fair Market Value of a whole share of Common Stock of the
Company shall be the closing price of a share of Common Stock of
the Company (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other
than a regular periodic cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with, or to effect any sale,
mortgage or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, mortgage or other transfer), in
one transaction or a series of related 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 (other than
a Subsidiary of the Company in one or more transactions each of
which is not prohibited by the proviso at the end of the first
sentence of Section 11(n) hereof), (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or
pay any dividend on the Common Stock of the Company payable in
Common Stock of the Company or to effect a subdivision,
combination or consolidation of the Common Stock of the Company
(by reclassification or otherwise than by payment of dividends in
Common Stock of the Company) then in each such case, the Company
shall give to each holder of a Right Certificate and to the
Rights Agent, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock of the
Company and/or Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action
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46
covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common
Stock of the Company and/or Preferred Stock, whichever shall be
the earlier; provided, however, no such notice shall be required
pursuant to this Section 25 as a result of any Subsidiary of the
Company effecting a consolidation or merger with or into, or
effecting a sale or other transfer of assets or earnings power
to, any other Subsidiary of the Company in a manner not
inconsistent with the provisions of this Agreement.
(b) In case any Section 11(a)(ii) Event shall occur,
then, in any such case, the Company shall as soon as practicable
thereafter give to each registered holder of a Right Certificate
and to the Rights Agent, in accordance with Section 26 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 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, by facsimile transmission or by nationally-recognized
overnight courier addressed (until another address is filed in
writing with the Rights Agent) as follows:
Wyman-Gordon Company
244 Worcester Street
North Grafton, MA 01536
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another
address is filed in writing with the Company) as follows:
State Street Bank and Trust Company
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing shares of Common Stock of
the Company) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
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SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
occurrence of a Section 11(a)(ii) Event, the Company and the
Rights Agent shall, if the Board of Directors of the Company so
directs, supplement or amend any provision of this Agreement as
the Board of Directors of the Company may deem necessary or
desirable without the approval of any holders of certificates
representing shares of Common Stock of the Company. From and
after the occurrence of a Section 11(a)(ii) Event, the Company
and the Rights Agent shall, if the Board of Directors of the
Company so directs, supplement or amend this Agreement without
the approval of any holder of Right Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereof in any manner which the Board of Directors of the Company
may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other
than an Acquiring Person, Adverse Person or any Affiliate or
Associate of an Acquiring Person or Adverse Person); provided,
however, that from and after the occurrence of a Section
11(a)(ii) Event this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a
time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time
period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and the benefits to, the
holders of Rights (other than an Acquiring Person, Adverse Person
or any Affiliate or Associate of an Acquiring Person or Adverse
Person). Without limiting the foregoing, the Company may at any
time prior to the occurrence of a Section 11(a)(ii) Event amend
this Agreement to lower the threshold set forth in Section 1(a)
to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Stock of the Company
then known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Stock of the Company for or
pursuant to the terms of any such plan) and (ii) 10%. Upon the
delivery of such certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the
occurrence of a Section 11(a)(ii) Event, the interests of the
holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock of the Company. Notwithstanding
any other provision hereof, the Rights Agent s consent must be
obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent s rights or duties.
SECTION 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
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SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock of the Company
outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares
of Common Stock of the Company of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the Rules under the Exchange
Act as in effect on the date hereof. The Board of Directors of
the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including without limitation, the right and power to
(i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of
Directors in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject any member of
the Board of Directors to any liability to the holders of the
Rights or to any other person.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock of the Company) 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, registered holders of the
Common Stock of the Company).
SECTION 31. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from the Agreement would adversely affect the purpose or
effect of the Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the Close of Business on the tenth day following the date of such
determination by the Board of Directors.
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SECTION 32. GOVERNING LAW. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the Commonwealth of Massachusetts
and for all purposes shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to
contracts to be made and to be performed entirely within such
Commonwealth. The courts of the Commonwealth of Massachusetts
and of the United States of America located in the Commonwealth
of Massachusetts (the "Massachusetts Courts") shall have
exclusive jurisdiction over any litigation arising out of or
relating to this Agreement and the transactions contemplated
hereby, and any Person commencing or otherwise involved in any
such litigation shall waive any objection to the laying of venue
of such litigation in the Massachusetts Courts and shall not
plead or claim in any Massachusetts Court that such litigation
brought therein has been brought in an inconvenient forum.
SECTION 33. 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 34. 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.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as an instrument under seal and
attested, all as of the day and year first above written.
ATTEST: WYMAN-GORDON COMPANY
By: /S/ LYNNE I. MAY By: /S/ WALLACE F. WHITNEY, Jr.
Lynne I. May Name: Wallace F. Whitney, Jr.
Title: Vice President
ATTEST: STATE STREET BANK AND TRUST
COMPANY, as Rights Agent
By: /S/ KATHLEEN G. FEDERICO By: /S/ CHARLES ROSSI
Kathleen G. Federico Name: Charles Rossi
Title: President
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EXHIBIT A
VOTE OF DIRECTORS ESTABLISHING
SERIES B JUNIOR PARTICIPATING CUMULATIVE
PREFERRED STOCK
of
WYMAN-GORDON COMPANY
Pursuant to Section 26 of Chapter 156B of the General Laws of
The Commonwealth of Massachusetts:
VOTED, that pursuant to authority conferred upon and vested in
the Board of Directors by the Restated Articles of Organization, as
amended (the "Articles"), of Wyman-Gordon Company (the
"Corporation"), the Board of Directors hereby establishes and
designates a series of Preferred Stock of the Corporation, and
hereby fixes and determines the relative rights and preferences of
the shares of such series, in addition to those set forth in the
Articles, as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as "Series B Junior Participating Cumulative
Preferred Stock" (the "Series B Preferred Stock"), and the number
of shares constituting such series shall be 100,000.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) (i) Subject to the rights of the holders of any shares of
any series of preferred stock (or any similar stock) ranking prior
and superior to the Series B Preferred Stock with respect to
dividends, the holders of shares of Series B Preferred Stock, in
preference to the holders of shares of common stock and of any
other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of
Series B Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to
the provisions for adjustment hereinafter set forth, 10,000 times
the aggregate per share amount of all cash dividends, and 10,000
times the aggregate per share amount (payable in kind) of all non-
cash dividends or other distributions other than a dividend payable
in shares of common stock or a subdivision of the outstanding
shares of common stock (by reclassification or otherwise), declared
on the common stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series B Preferred Stock. The multiple of
cash and non-cash dividends declared on the common stock to which
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holders of the Series B Preferred Stock are entitled, which shall
be 10,000 initially but which shall be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the
"Dividend Multiple." In the event the Corporation shall at any
time after October 21, 1998 (the "Rights Declaration Date") (i)
declare or pay any dividend on common stock payable in shares of
common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in
shares of common stock) into a greater or lesser number of shares
of common stock, then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of
dividends which holders of shares of Series B Preferred Stock shall
be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding
immediately prior to such event.
(ii) Notwithstanding anything else contained in this
paragraph (A), the Corporation shall, out of funds legally
available for that purpose, declare a dividend or distribution on
the Series B Preferred Stock as provided in this paragraph (A)
immediately after it declares a dividend or distribution on the
common stock (other than a dividend payable in shares of common
stock); provided that, in the event no dividend or distribution
shall have been declared on the common stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on
the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series B Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination
of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be not more than such number of days prior
to the date fixed for the payment thereof as may be allowed by
applicable law.
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53
SECTION 3. VOTING RIGHTS. In addition to any other voting
rights required by law, the holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 10,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. The number of votes which
a holder of a share of Series B Preferred Stock is entitled to
cast, which shall initially be 10,000 but which may be adjusted
from time to time as hereinafter provided, is hereinafter referred
to as the "Vote Multiple." In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or (ii)
effect a subdivision or combination or consolidation of the
outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock)
into a greater or lesser number of shares of common stock, then in
each such case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of
shares of Series B Preferred Stock shall be entitled shall be the
Vote Multiple immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of common
stock outstanding immediately after such event and the denominator
of which is the number of shares of common stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series B Preferred Stock and the holders of
shares of common stock and the holders of shares of any other
capital stock of this Corporation having general voting rights,
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as otherwise required by applicable law or as set
forth herein, holders of Series B Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
common stock as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series
B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock;
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54
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred
Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) except as permitted in subsection 4(A)(iv) below,
redeem, purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding
up) with the Series B Preferred Stock, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series
B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of
any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with
the Series B Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under subsection (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series B
Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of preferred
stock and may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein.
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SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation (voluntary or otherwise), dissolution or winding up of
the Corporation, no distribution shall be made (x) to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, plus an amount equal to the
greater of (1) $10,000.00 per share or (2) an aggregate amount per
share, subject to the provision for adjustment hereinafter set
forth, equal to 10,000 times the aggregate amount to be distributed
per share to holders of common stock, or (y) to the holders of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the
Corporation shall at any time after the Rights Declaration Date
(i) declare or pay any dividend on common stock payable in shares
of common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in
shares of common stock) into a greater or lesser number of shares
of common stock, then in each such case the aggregate amount per
share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under clause (x) of the
preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the
denominator of which is the number of shares of common stock that
were outstanding immediately prior to such event.
Neither the consolidation of nor merging of the Corporation
with or into any other corporation or corporations, nor the sale or
other transfer of all or substantially all of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of common stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of
Series B Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 10,000
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or
for which each share of common stock is changed or exchanged, plus
accrued and unpaid dividends, if any, payable with respect to the
Series B Preferred Stock. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or
(ii) effect a subdivision or combination or consolidation of the
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outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock)
into a greater or lesser number of shares of common stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series B Preferred
Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding
immediately prior to such event.
SECTION 8. REDEMPTION. The shares of Series B Preferred
Stock shall not be redeemable.
SECTION 9. RANKING. Unless otherwise expressly provided in
the Articles or a Certificate of Vote of Directors Establishing a
Class of Stock relating to any other series of preferred stock of
the Corporation, the Series B Preferred Stock shall rank junior to
every other series of the Corporation s preferred stock previously
or hereafter authorized, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up
and shall rank senior to the common stock.
SECTION 10. AMENDMENT. The Articles and this Certificate of
Vote of Directors Establishing a Class of Stock shall not be
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred
Stock so as to affect them adversely (within the meaning of Section
77 of Chapter 156B of the Massachusetts General Laws) without the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series B Preferred Stock, voting separately
as a class.
SECTION 11. FRACTIONAL SHARES. Series B Preferred Stock may
be issued in whole shares or in any fraction of a share that is one
ten-thousandth (1/10,000th) of a share or any integral multiple of
such fraction, which shall entitle the holder, in proportion to
such holder s fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of
all other rights of holders of Series B Preferred Stock. In lieu
of fractional shares, the Corporation may elect to make a cash
payment as provided in the Rights Agreement for fractions of a
share other than one ten-thousandth (1/10,000th) of a share or any
integral multiple thereof.
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EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER NOVEMBER 30, 2008 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF WYMAN-GORDON COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN
WYMAN-GORDON COMPANY AND STATE STREET BANK AND TRUST COMPANY, AS
RIGHTS AGENT, DATED AS OF OCTOBER 21, 1998 (THE "RIGHTS
AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON, AN ADVERSE PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
WYMAN-GORDON COMPANY
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
Shareholder Rights Agreement dated as of October 21, 1998 (the
"Rights Agreement") between Wyman-Gordon Company (the "Company")
and State Street Bank and Trust Company, as Rights Agent (the
"Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights
Agreement) and prior to the close of business on November 30,
2008 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one ten-
thousandth of a fully paid, non-assessable share of the Series B
Junior Participating Cumulative Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $_____ per one
ten-thousandth of a share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase and the related Certificate duly
executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of
, based on the Preferred Stock as constituted at such
date.
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Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Right Certificate are beneficially owned by (i) an
Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Adverse Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
a Person who, after such transfer, became an Acquiring Person or
an Adverse Person, or an Affiliate or Associate of an Acquiring
Person or an Adverse Person, such Rights shall become null and
void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
office of the Company and the designated office of the Rights
Agent and are also available upon written request to the Company
or the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or 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 Certificates for the number of whole Rights not
exercised. If this Right Certificate shall be exercised in whole
or in part pursuant to Section 11(a)(ii) of the Rights Agreement,
the holder shall be entitled to receive this Right Certificate
duly marked to indicate that such exercise has occurred as set
forth in the Rights Agreement.
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Under certain circumstances, subject to the provisions of
the Rights Agreement, the Board of Directors of the Company at
its option may exchange all or any part of the Rights evidenced
by this Certificate for shares of the Company s Common Stock or
Preferred Stock at an exchange ratio (subject to adjustment)
specified in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Board
of Directors of the Company at its option at a redemption price
of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of
stock upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one ten-
thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts).
If the Company elects not to issue such fractional shares, in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock, Common Stock or
any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this 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 an
authorized signatory of the Rights Agent.
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WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
[Corporate Seal] WYMAN-GORDON COMPANY
Attested: By
By Name:
Clerk or Assistant Clerk Title: Chairman, Vice Chairman,
President or Vice President
Countersigned:
[ ],
as Rights Agent
Authorized Signatory
Date of countersignature:
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61
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________ hereby sells,
assigns and transfers unto ____________________________________
(Please print name and address of transferee)
____________________________________ this Right Certificate,
together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________
Attorney, to transfer the within Right Certificate on the books of
the within-named Company, with full power of substitution.
Dated: ,
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ______
are ______ are not being transferred by or on behalf of a Person
who is or was an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ____ did ____ did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: ,
Signature
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62
NOTICE
The signature to 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.
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63
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To WYMAN-GORDON COMPANY:
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Right Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying taxpayer number: __________________
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate or if the Rights are being
exercised pursuant to Section 11(a)(ii) of the Rights Agreement, a
new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number: _____________________
(Please print name and address)
Dated: ,
Signature
Signature Guaranteed:
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64
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ____ are
____ are not being exercised by or on behalf of a Person who is or
was an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ____ did ____ did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: ,
Signature
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65
NOTICE
The signature to the foregoing Election to Purchase 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.
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