Exhibit C
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UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On November 4, 1998, the Board of Directors of Ingersoll-Rand
Company (the "Company") declared a dividend of one preference share
purchase right (a "Right") for each outstanding share of Common Stock,
par value $2.00 per share, of the Company (the "Common Stock"). The
dividend is payable on December 22, 1998 (the "Record Date") to the
shareholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of
Series A Preference Stock, without par value (the "Preferred Stock"), of
the Company at a price of $200 per one one-thousandth of a share of
Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
dated as of November 9, 1998, as the same may be amended from time to
time (the "Rights Agreement"), between the Company and The Bank of New
York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") have acquired beneficial ownership of 15% or more
of the outstanding shares of Common Stock or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes
an Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evi-
denced, with respect to any of the Common Stock certificates outstanding
as of the Record Date, by such Common Stock certificate together with a
copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer or new
issuances of Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for shares of Common Stock outstanding as of the Record
Date, even without such notation or a copy of this Summary of Rights,
will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distri-
bution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 22, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders
of the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current
market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend
of 1000 times the dividend declared per share of Common Stock. In the
event of liquidation, the holders of the Preferred Stock will be entitled
to a minimum preferential liquidation payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate
payment of 1000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have 1000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to receive 1000
times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of
a Right at the then current exercise price of the Right, that number of
shares of Common Stock having a market value of two times the exercise
price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power
are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will
have become void) will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the person with whom the Company has
engaged in the foregoing transaction (or its parent), which number of
shares at the time of such transaction will have a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event
described in the prior paragraph, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange ratio
of one share of Common Stock, or one one-thousandth of a share of
Preferred Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will
be issued (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election
of the Company, be evidenced by depositary receipts) and in lieu thereof,
an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including
an amendment to lower the 15% threshold for an Acquiring Person described
above to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known
to the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors,
except pursuant to an offer conditioned on a substantial number of Rights
being acquired. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since the Rights
may be redeemed by the Company at the Redemption Price prior to the time
that a person or group has acquired beneficial ownership of 15% or more
of the shares of Common Stock.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A dated November , 1998. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as the same may be amended from time
to time, which is hereby incorporated herein by reference.